(Note. This is very good, but the limitation is the lookback period. The
calculation point for the CBL line might be 5, 10, 15, 30 days away from
todays date.Also watch for the way 'gap' days are treated. Daryl Guppy)
Copied from StockCentral - Thanks Ken D
Well .... last weekend I replied to a post requesting a MetaStock solution for calculating the Countback Line discussed in Daryl Guppy's book "Share Trading: An Approach to Buying and Selling". Subequently, about 30 requests for the formulas I use were received. Not unexpectedly, a few defects were found with the original offerings. This helped forge a somewhat more robust solution, which is here given to the wider audience of this Forum, so that further improvements may be forthcoming. Alternatives of presentation style are many, according to taste, but we are here requesting improvements in substance, identification of possible flaws, or have real simplification benefits - please provide solutions where possible.
ACKNOWLEDGEMENTS .... With thanks to the several people who have commented, all constructively it is pleasing to say, particular credit is warranted by the significant contributions from Bryan Stanton and Siobhan Channon.
LIMITATIONS .... With MetaStock, there seems to be a need for two different formulas to handle the issue: - one for the CBL from a LOW (CBLlo), - the other for the CBL from a HIGH (CBLhi). The formulas given below were generated using v.6.52. Because of the use of PREV they won't work in some earlier MetaStock versions it seems, though a bit of thought should overcome this limitation - anyone able to comment? As written they are based upon relative prices over a DEFAULT cover of 13 days (but adjustable from 3 to 55 days) - this is one of the potential weaknesses which commands individual interpretation for a particular equity or contract, which may cycle more or less frequently and require different timeframes. Other indicators and assessments are, of course, needed to gauge the probability of a CBL-indicated counter-trend holding. Also, for particularly choppy or indecisive circumstances there may be a need to extend the Ref(H or L, -5) to a greater number of comparison days by appropriate copying and adjustments to the basically simple pattern in these formulas - but if it came to this perhaps the trade should be left alone anyway! Owing to price vagaries it is not unusual for a CBLhi to be less than a CBLlo calculation, or the converse, especially with low-gradient trends or sideways price movements.
NOTE: With each formula below, copy exactly from "HighDays" or "LowDays" down to "PREV )))))" into the Indicator Builder.
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CBLhi:
HighDays := Input("Enter # days to cover last HIGH for CBL calc'n:", 3, 55, 13);
If(HIGH < HHV(HIGH, HighDays), {then ...} PREV, {previous CBLhi, else...} If(Ref(L,-2) < Ref(L,-1) AND Ref(L,-2) < L AND Ref(L,-1) < L, {then ...} Ref(L,-2), {2nd day back low, else...} If((Ref(L,-3)< Ref(L,-2) AND Ref(L,-3) < Ref(L,-1) AND Ref(L,-3) < L) AND (Ref(L,-2)< L OR Ref(L,-1) < L), {then ... } Ref(L,-3), {3rd day back low, else...} If((Ref(L,-4)< Ref(L,-3) AND Ref(L,-4) < Ref(L,-2) AND Ref(L,-4) < Ref(L,-1) AND Ref(L,-4) < L) AND (Ref(L,-3)< L OR Ref(L,-2) < L OR Ref(L,-1) < L), {then... } Ref(L,-4), {4th day back low, else...} If((Ref(L,-5)< Ref(L,-4) AND Ref(L,-5) < Ref(L,-3) AND Ref(L,-5) < Ref(L,-2) AND Ref(L,-5) < Ref(L,-1) AND Ref(L,-5) < L) AND (Ref(L,-4)< L OR Ref(L,-3) < L OR Ref(L,-2) < L OR Ref(L,-1) < L), {then ...} Ref(L,-5), {5th day back low, else...} PREV )))))
and for the CBL from a LOW
CBLlo:
LowDays := Input("Enter # days to cover last LOW for CBL calc'n:", 3, 55, 13);
If(LOW > LLV(LOW, LowDays), {then ...} PREV, {previous CBLlo, else...} If(Ref(H,-2) > Ref(H,-1) AND Ref(H,-2) > H AND Ref(H,-1) > H, {then ...} Ref(H,-2), {2nd day back high,else...} If((Ref(H,-3)> Ref(H,-2) AND Ref(H,-3) > Ref(H,-1) AND Ref(H,-3) > H) AND (Ref(H,-2)> H OR Ref(H,-1) > H), {then ... } Ref(H,-3), {3rd day back high,else...} If((Ref(H,-4)> Ref(H,-3) AND Ref(H,-4) > Ref(H,-2) AND Ref(H,-4) > Ref(H,-1) AND Ref(H,-4) > H) AND (Ref(H,-3)> H OR Ref(H,-2) > H OR Ref(H,-1) > H), {then... } Ref(H,-4), {4th day back high,else...} If((Ref(H,-5)> Ref(H,-4) AND Ref(H,-5) > Ref(H,-3) AND Ref(H,-5) > Ref(H,-2) AND Ref(H,-5) > Ref(H,-1) AND Ref(H,-5) > H) AND (Ref(H,-4)> H OR Ref(H,-3) > H OR Ref(H,-2) > H OR Ref(H,-1) > H), {then ...} Ref(H,-5), {5th day back high,else...} PREV )))))
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