Continue reading...The Proof is in the Trading
In my recent TASC article, ?The Hunt for Superior Signals ? Two Moving Function Hybrids? (September 2005), I recommended that the Moving Slope Rate of Change (?MSROC?) be a part of every trader and researcher?s toolbox. A quick look at this indicator demonstrates its value:
As you can see, the moving slope rate of change is remarkably smooth. Instead of using just a change in price to calculate slope (as with rate of change or ?ROC?), we use the slope of a least-squares line to calculate MSROC. [Instructions for MSROC calculation are at the end of the article.] Least-squares lines are notoriously smooth. This smoothness is a major asset, as it minimizes the need for further qualification or subjective input, giving fewer ?false signals?. For example, from 1993 to early 2005, you would have observed the...
Last edited by a moderator: