I think I’m kind of in a stage for a while where I’m just trying out various things, a very experimental approach rather than a methodical step by step. However the experiments are conducted within the frame of the overall methodical process which I will not forget.
I decided to put on CCI onto my chart and just take a look at it. CCI is one of the indicators that I played with a long long time ago when I was a young lost grasshopper. I only traded CCI peak divergence, and the net goal was very similar to what it is now: picking the top and bottom when the trend looks like it will die and boost into the other direction. I really quite like the indicator. It works fantastically in range and slow trending markets, and very poorly in strongly trending markets. I put the 24 CCI and a 24h transient bar indi and noticed this:
Now, it kinda looks like it has potential, but I already have no plans of using it (in it’s current state).
1. Good correlation between CCI +\- 100 levels and where left side transient bars are located.
2. Decent job of marking extremes.
3. “Binds” real price to only go so high or so low once a CCI peak has formed
The issue is that if CCI extremes and LST bars occur in the same spot, it’s no help. So, I decided to try and rip CCI apart and create a new formula. I realize that Meridian, TCD long, etc, and the “signals” you build from them are very similar to traditional indicators. The main differences being that traditional indicators have a knack for keeping bars separate ((H+L+C)/3, Close prices, highs/lows) whereas I think the “correct” view of the market is to use TCD deltas (H-pL, L-pH) as a substitute.
What I’m looking for in the modded version is similar to how CCI normally functions:
1. For CCI extremes to correlate with real price extremes
2. CCI prices to oscillate between -100 and 100 most of the time
Looks decent I think, although pinpointing its effectiveness from a coding perspective will be very difficult.
Given that the low isn’t taken out in the next 12 hours or so, odds are quite good price will beat 1.2766