TheRumpledOne
6,411 posts
msg #51820
- Ignore TheRumpledOne
modified |
5/26/2007 12:14:28 PM
The Architect, on a forum where I am banned, shared an idea called Travel. He was using a Zig Zag type of indicator to measure travel.
I developed an alternate approach. I am defining travel as the length of the candle body plus 2 times the length of each of the wicks. This makes intuitive sense to me. Yes, it doesn't count the travel within the candle body but if you do that, then you might as well just add up the ticks.
xWick = high - Top ;
xTail = Bottom - low ;
xTravel = absvalue( close - open ) + ( 2 * xWick ) + ( 2 * xTail ) ;
You can think of it this way: travel = body plus twice the wick plus tail.
For a bar with C>O travel:
starts at the open
goes down to the low (tail)
back up to the open
from open up to the close (body)
from close up to the high (wick)
from high back down to the close
2+3 give you twice the tail and 5+6 give you twice the wick.
This can also be expressed as RANGE PLUS WICK PLUS TAIL.
xTOpen is travel divided by the opening price. A higher xTOpen indicates more bang for the buck.
To me, the point of Travel is to use it to compare or rank stocks. The more travel, the more money to be made, especially if you are a day trader.
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