Hi Eugene, There are 2 tension indicators. Tension and Extratension. What are the differences between those two? When i look at the formula: tension = (fastBalance - slowBalance) - (fastPrice - slowPrice) As prices rise, there are less and less buyers willing to pay for higher prices, consequently fastBalance will be more negative than slowBalance --- the term (fastBalance - slowBalance) will result in negative number. fastPrice will be higher than slowPrice and the term (fastPrice - slowPrice) will become positive. Overall when price rises tension will turn to negative, please correct me if i'm wrong.
Is it right to say that the strategy is to go short when tension is really negative and to go long when tension is really positive? Defender.java and TensionSeeker.java are the strategies that use tension indicator. Which one has better performance? One last question: Based on the example from your code, how do you determine your fast,slow,entry, and exit parameter value? Many Thanks! On 30 Nov, 01:49, nonlinear5 <[email protected]> wrote: > > It's actually the opposite, sorry if that was not clear. Long > > positions are entered when the short term balance is greater than a > > longer term balance and is above a certain threshold. Short positions > > are entered when the short term balance is smaller than a longer term > > balance and is below a certain threshold. This is actually in line > > what I designated as the Econ 101 principle, but I also designate > > these as anti-trend strategies because the long and short entries tend > > to coincide with the price reversals. Hope this makes sense. > > Now that I've attempted to explain the role of balance as the > indicator, I'd like to also explain how the price is used. > Specifically, the Tension indicator takes *both* balance and price > into consideration, and there is evidence that it performs better than > an indicator which only considers balance (or only price). So, let's > go back to Econ 101 for a moment. When the demand rises, the prices > rise. This is not instantaneous adjustment, but rather a continuous > process. As prices rise, there are less and less buyers willing to pay > the higher prices, so as the price continues to go up, the demand > subsides. At some point in time, there is no interest in buying at > all, and the interest in selling accelerates. This is what I call a > "high tension" point, which is also very commonly known as the > "resistance" level. At the high tension point, the price went up > considerable, and balance went down considerably. In fact you can > measure how "tense" things are by this formula: > tension = (fastBalance - slowBalance) - (fastPrice - slowPrice) > the terms "fast" and "slow" correspond to the shorter and longer term > exponential moving averages of the balance and price. If you look at > the Tension indicator, you'll see that's pretty much what it does. > > So, in terms of the traditional technical analysis terms, extreme > positive tension is the "support", and extreme negative tension is the > "resistance". -- You received this message because you are subscribed to the Google Groups "JBookTrader" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/jbooktrader?hl=en.
