5 The Pelican Room’s RaginCajun has been playing around with the LBR Paintbar study newly implanted into Thinkorswim. I was immediately intrigued when I saw his posts of charts using the study. I’ve always wondered how the blogger SypderCrusher came up with his paintbar charts, as almost all his daily buy/sell signals came within a day or two of mine. I don’t know for sure, but now I can assume his system is a refined version of the LBR or of John Carter’s TTM, another paintbar trend study.
Another reason that RaginCujun’s paintbar posts caught my attention was because he is a man of influence in the Pelican Room, and I am hoping the Room’s subscriber’s start paying attention to trend in conjunction with iBankCoin’s PPT hybrid score. Knowing or believing the market is overbought or oversold is only one piece of the trading puzzle. You also have to know how to spot a change in trend in order to reverse your positioning. As for my trading today, my system told me to close hedges and go long. I was happy I did so in the morning, but then my system got thisclose to telling me to get a hedge on again. Fortunately, the late-day rally worked out in my favor.
My trend study is almost embarrassingly simple, but it has worked for the way I trade. Still, I am going to take a closer look at the LBR study to see if I can adjust its parameters to refine my basic system. I really recommend that you look into LBR and other trend indicators. If you don’t yet know what ATR and SMA mean, you will have to study up. You can start at the following link to get a list of some good trend studies and go forwards or backwards in terms of knowledge acquisition: http://trade.cc/cav
Some guys are only about that thing. (Listen really hard and you will hear the title of this post.)
5 Responses to “Showing Off Your Ass Cause You’re Thinking It’s A Trend”
Hawaiifive0
It would be great if IBC or even 12631 could put up a short term trend system for those of us who do not have TOS.
spoiledsquid
You can create your own. You can do it! 🙂
Berniecornfeld
Teach a man to fish ;)….. Thanks
SPYderCrusher
Hello squid!
Thank you for the interest! Seem to be getting a lot of mentions here today!
I explain my paintbrush more thoroughly in this post here –> http://goo.gl/hO4SE
Paint bar studies as you call them are not limited to these few examples, I’ve developed many over the years. Any and all things from VIX to % of stocks over some MA.
As a sidenote, too many people follow indicators without having any idea how they are calculated. 99.9999999% of indicators are calc’d from price as the primary or only component, and these are no different.
In other words, learning to read price > learning to “read” some indicator.
The paints can, for obvious reasons, expedite the process of “reading” price. But if you train your eye to “see” volatility and to “count” highs then it redundant to that.
According to the documentation, located here –> http://team.thinkorswim.com/manual/dark/studies/studies%20library/G-L/LBR_PaintBars.html
LBR paintbars are calculated using an ATR buffer in relation to High and Low pivots over the user selected period, after which, a crossing = this trend or that.
This is different than my indicator, which counts the highs and lows over the user-selected period to establish the mathematical basis for a trend (any uninterrupted sequence of a higher low/higher high or lower high/lower low.
In other words LBR adds volatility to the pivot which is probably a shorter period to create the buffer bw trends whereas I am using the raw price to calculate the high lows pivots, and counts.
This is mathematically very similar to an indicator I showed here (though not the same, as not based on pivots like LBR)
http://goo.gl/mRFO7
TTM is based on bollinger band contraction occurring simultaneously on 1 (if the developer was lazy) or more timeframes. A quick google search for it shows $400 for the plugin!?! Wow do I undercharge / what a rip off. Not bec $400 is a lot, it isn’t for something that works, but because the indicator would be so easy to replicate in a chart program worth a salt.
The last thing I will say is that I’ve finally been proactive about contacting developers who will be putting my tools such as SC paint into my site realtime. That would be cool.
Anyway, I thank you for the interest in my indicator! Even though the idea is not unique I do not know of any package that offers a similar indicator built in.
spoiledsquid
Thanks, Spyder.