Traders’ Tips by Technical Analysis, Inc.
TRADESTATION: DEVELOPING HOT ZONES
Massimiliano Scorpio’s article “Developing Hot Zones” in
this issue addresses a technique for producing statistical
reports on the predictive nature of the key reversal pattern. As
the author makes clear, this particular pattern is only one of
many possible patterns for study. The author’s goal is to show
the reader a process for building statistical reports on any
pattern that might be of interest.
These statistical reports are the product of the
MSOpenClosePct indicator. This indicator is the focus of the
article and most of our comments here address means of
improving the EasyLanguage code provided in the article.
The indicator calls a custom function for identifying six
open and six close zones. The report then displays the number
of bars in the sample, the number of opens in each zone, and
the percentage of times an open in a particular zone is
followed by a close in a particular zone.