Programming For Technical Analysis Part 3 by Steve Notis
In the last two installments of this column I wrote about Microsoft QuickBASIC being my choice as the best language for a beginner to learn for technical analysis, and I presented a routine to read CompuTrac format data files. I also presented a crude but working technical analysis charting program with source code.
The TACHART.BAS program that I presented last issue demonstrated the techniques needed to scale and plot charts and indicators. It is not a "bulletproof" program in that there are no routines to reject improper entries by the user, and there are no error-handling routines. These things can be added if you want to develop a more sophisticated program. I left them out to keep the code simpler and easier to follow.
The only indicator included in last month's code was the rate-of-change study, which, next to moving averages, is the most basic technical indicator. This month I will present an add-on module that will allow you to plot a totally new indicator called Up-Down Volatility.
Up-Down Volatility takes the form of two separate lines that criss-cross to indicate changes in the trend of a market. Visually, it looks much like J. Welles Wilder's plus and minus Directional Movement Index, but the formulas are quite different.