Here are two indicators to assist readers in identifying some
of the classic chart patterns, as discussed in Daniel Chesler’s
“Identifying significant chart formations” elsewhere in this
issue. Ideally, you will use one or both of the indicators in
conjunction with other analytical techniques, such as
trendlines, to identify trading opportunities on your charts.
The first indicator, the ADX/MovAvg Combo, is a relatively
simple indicator based on the average directional
movement indicator (ADX) and moving average calculation.
This indicator plots a 50-bar moving average and triggers
both visual and audio alerts when a conspicuous decrease
occurs in the ADX below a specified level, which in this case
is 15. The indicator code to be entered in the TradeStation
Power Editor follows. Suggestions for the format settings for
this indicator are given after the code...