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OmniScripts
The Quotient Transform
Last Activity 10/14/2018 9:04 PM
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THOMAS HELGET

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Subject : The Quotient Transform
Posted : 7/18/2014 5:48 PM
Post #23035

Fellow OT/VT Coders:

I believe I have finally "translated" this month's article (August, 2014), "The Quotient Transform", by John F. Ehlers in Technical Analysis of Stocks and Commodities from TradeStation to OmniLanguage.

It took a little doing as OmniLanguage uses radians, not degrees like TradeStation apparently does. There were a few other snags as well.

I don't pretend to understand the article, but the crux of the matter lay in a few sentences from the article on page 28:

"A simple trend-trading rule would be to enter a long position trade when the red line crosses above zero and hold that position until the cyan indicator line crosses below zero. This rule gives the benefit of entering the trade on the early-onset indication and exiting that trade on or before the trend has run its course."

Thus I have color coded things to match the simple trading dictum above. I also have created a Chart Template and an OmniScan to identify stocks showing a buy signal today. They are attached to this post.

The OmniScan gave only one candidate today, AAMC as shown below:



Note the nice entries in the past, but the rather poor exits. It might be better to watch the cyan line for a rollover instead of waiting for it to cross zero.

In any event I hope you enjoy this indicator (it really is not a VT "Transform" despite the name!).

Tom Helget

[Edited by THOMAS HELGET on 7/18/2014 5:51 PM]

Attached file : The Quotient Transform.png (58KB - 1459 downloads)
Attached file : TheQuotientTransform.txt (2KB - 388 downloads)
Attached file : The Quotient Transform.otd (152KB - 317 downloads)
Attached file : _The_32_Quotient_32_Transform.otl (1KB - 303 downloads)

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apĀ·prenĀ·ticeGuru

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Subject : RE: The Quotient Transform
Posted : 7/20/2014 12:51 PM
Post #23037 - In reply to #23035

Hi Tom:

Thanks for the code. By visual check on multiple time frames and intraday, it seems to find great entries, esp. on smaller time frames. But cannot rely much on exits ... and this confirms with what I found on the net too:

" A QT's drawback is that it's noticed to still stay in trend mode for too long after the uptrend is over. By applying two oscillators with different K parameters, author suggests that the system is facilitated to exit on or before the trend has run its course. "

Thanks again for your contribution, and good to see you are still coding & sharing with the OT community, been missing lately your posts on the OT forums :-). Cheers.
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Mel

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Subject : RE: The Quotient Transform
Posted : 7/21/2014 1:08 PM
Post #23038 - In reply to #23035

I have also made a version of the Quotient Transform, that runs a littie faster for intraday use. It also allows the user to change the cutoff of the upper decycler period for the roofing filter.

With a little play, I noticed that if the lower period is set to the dominant cycle period, and the cutoff is set a few bars above the trend cycle period, it works better. Look at the Spectrum indicator, set Spectrum(300,150) (which is slow, get rid of it after you find the tend cycle period somewhere between 75 to 140 bars. Using these setting not only gives better entries, but it gets you out much closer to the right place.

Mel

[Edited by Mel on 7/21/2014 1:28 PM]

Attached file : eQuotientTransform.txt (1KB - 365 downloads)

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THOMAS HELGET

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Subject : RE: The Quotient Transform
Posted : 7/21/2014 2:29 PM
Post #23039 - In reply to #23038

Mel:

Thanks, and could you maybe provide an example of your methodology using the Spectrum Indicator as you described just so we might understand it's use a bit better.

I am a bit perplexed because my Spectrum Indicator Parameters only go to 100 periods and 50 Max Cycles although I am sure you could type them in rather than using the slider:



Tom Helget

[Edited by THOMAS HELGET on 7/21/2014 2:33 PM]

Attached file : Spectrum Indicator Limits.PNG (59KB - 1186 downloads)

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Mel

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Subject : RE: The Quotient Transform
Posted : 7/22/2014 7:06 AM
Post #23040 - In reply to #23035

Thomas,

I find that for the Spectrum to work well, I need twice as many bars in the lookback as in the search range. So to search for cycles up to 150 bars wavelength, I set the first parameter to 300, the second to 150. This requires a huge amount of processing power, and is slow. But, it finds the cycles I am interested in. The trend cycle is just the most dominant cycle in the 75-140 bar range (normally).

So, I first try 120,60 to get the dominant cycle, then 300,150 to find the trend cycle. The process would be dramatically faster if the Spectrum allowed a input of a lookback, a begin search bar, and a cutoff search bar.
The lack of the begin bar makes the search at longer wavelengths really slow, since all wavelengths have to be searched, not simply the range you are interested in.

An alternative (not quite as accurate) is to switch from EOD to weekly for the longer wavelength, then multiply by five when you go back to the daily chart.

Mel
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