Tongdaxin triple filter trading system index formula (including strong index index)

The triple screen trading system was invented by Alexander Elder, the author of "Trading for a Living". It was first published in 1986, and has been continuously improved since then, adding or changing some details, but using multiple time periods and techniques The principle of analysis and decision-making by indicators has not changed.

1. Strength index

In the first edition of "Trading for a Living", the translation of Force Index as Strength Index actually means the same thing. The strength index indicator combines price and trading volume, and summarizes three important pieces of information: the direction and degree of price change, and the corresponding trading volume during the change process.

Strength index = today's trading volume × (today's closing price - yesterday's closing price)

The histogram of the original strength index indicator is jagged, and the 2-day EMA is used for smoothing to obtain the 2-day strength index indicator EMA.

FI:=VOL*(C-REF(C,1));

FIS:EMA(FI,2);{2-day strength index EMA}

DRAWBAND(FIS,RGB(255,0,255),0,RGB(0,255,255));

2. The indicator formula of the triple filter trading system (sub-picture)

1. The first filter screen (following the general trend)

The first filter uses the trend-following indicator to identify the weekly trend and trade with the direction of the trend. The book uses the slope of the MACD of the weekly chart to identify it. Although the author mentions the power system, the chapter on the triple filter does not introduce it in detail.

Spring: MACD rises from below the zero axis

Summer: MACD crosses the zero axis

Autumn: MACD falls from above the zero axis

Winter: MACD crosses the zero axis

The first filter only considers the weekly MACD signals in spring and summer, and the signals in spring are better than those in summer.

EMA13:=EMA(C,13);

DIF:=EMA(C,12)-EMA(C,26);

DEA:=EMA(DIF,9);

MACD:=(DIF-DEA)*2;

B:MACD>REF(MACD,1);{The value of the MACD column line is greater than the previous one, that is, the MACD rises}

S:MACD<=REF(MACD,1);{The value of MACD bar is less than or equal to the previous one, that is, MACD drops};

Note: The formula name is saved as "DYC", and the weekly data of this indicator will be referenced later.

2. The second filter screen (against the small trend)

The first filter is on the weekly chart, and the second filter is on the daily chart. The weekly trend is up, and the daily trend is back. Follow the general trend and go against the small trend.

The second filter uses the Force Index indicator, more precisely the 2-day Force Index EMA. It has already been introduced at the beginning of the article, so I won't repeat it here. The author also mentioned that some other indicators performed well, such as RSI and so on.

3. The third filter

The third filter is an entry technique that does not require indicators, so the combination of the first filter and the second filter constitutes the indicators required by the triple filter trading system.

4. The indicator formula of the triple filter trading system (sub-picture)

Note: Weekly data is quoted, as long as the weekly line does not close, drift may occur on the daily line. For example, the red bar on the daily line turns green or the green bar turns red. Therefore, the following formula is just a market indicator, which needs to be analyzed in combination with the specific situation of the weekly line.

FI:=VOL*(C-REF(C,1));

FIS:EMA(FI,2);

DRAWBAND(FIS,RGB(255,0,255),0,RGB(0,255,255));

HF:=CONST(HHV(FIS,100)*1.1);

STICKLINE("DYC.B#WEEK",HF,HF*1.1,4,0),COLORRED;{Weekly MACD up, red bar}

STICKLINE("DYC.S#WEEK",HF,HF*1.1,4,0),COLORGREEN;{Weekly MACD down, green bar}

3. The indicator formula of the triple filter trading system (main picture)

The third filter mentioned above is the entry technique. The method of the first edition of "Trading for a Living" is to enter the market when the daily line breaks through the high point of the previous trading day. In the second edition of the book, the author stated that this method has some shortcomings, such as the stop loss is too far away, and it is easy to trigger the stop loss. Although the breakthrough technique is still effective, he rarely uses it now. The author now uses the intraday-level minute chart to operate, but considering readers who cannot watch the market in real time, he recommends an alternative method "average EMA drop penetration".

However, the average EMA drop penetration is more troublesome, so I won’t write it this time. The main chart formula uses version 1 of the daily bar to signal an upward breakout of the previous session's high. However, it should be noted that the weekly data is quoted, and the signal may drift, which needs to be analyzed in conjunction with the specific situation of the weekly line.

EMA13:EMA(C,13);

EMA26:EMA(C,26);

{first filter}

A1:=DYC.B#WEEK=1;

{Second Filter}

FI:=VOL*(C-REF(C,1)),VOLSTICK;

FIS:=EMA(FI,2);

T:=BARSLAST(CROSS(0,FIS));

A2:=T>0;{The number of cycles since the 2-day strength index EMA crossed the zero axis is greater than 0}

{Third Filter}

TP:=C>REF(H,1);

TP1:=TP AND COUNT(TP,T)=1;{The closing price breaks through the previous high for the first time}

JX:=EMA13>EMA26;{The daily EMA13 moving average is at the EMA26 moving average, reducing the influence of weekly drift}

LP:=L/EMA13<1.03; {filter the case where the lowest price deviates too far from the EMA13 moving average}

A3:=TP1 AND JX AND LP;

XG:=A1 AND A2 AND A3;

DRAWICON(XG,L,1);

STICKLINE(XG,H,L,0,0),COLORYELLOW;

STICKLINE(XG,O,C,3,0),COLORYELLOW;

There is no stock selection formula in this article, because the weekly data is quoted, which may drift, so I will not write the stock selection formula. The triple filter trading system is a good system. Even if you don't use these indicators, learning the principles of this system is of great benefit to building your own trading system.

Friendly reminder: This article is only for learning and exchanging technical indicator formulas, and does not constitute any investment advice. Investment is risky, you need to be cautious when entering the market!