V. 22:5 (28-37): Phase Change Index by M.H. Pee

V. 22:5 (28-37): Phase Change Index by M.H. Pee
Item# \V22\C05094PEE.pdf
$3.95
Availability: In Stock

Product Description

Phase Change Index by M.H. Pee

Which phase is your market going through? Find out by using this indicator.

Prices at any time can be up, down, or unchanged. A period where market prices remain relatively unchanged is referred to as a consolidation. A period that witnesses relatively higher prices is referred to as an uptrend, while a period of relatively lower prices is called a downtrend. The phase change index (PCI) is an indicator designed specifically to detect changes in market phases.

THEORY BEHIND THE PCI

Six phase changes are possible, as illustrated in Figures 16 (the black line represents the closing prices for a particular period, in this case 35 days). Just how does the PCI differentiate between the six? First, note that in order to trade the market profitably, you will have to hold long positions during uptrends, be short during downtrends, and be flat (or at least remain with the previous position) during consolidations until you are sure of the market direction. Hence, for the scenarios in Figures 1 and 3, you would like to be long (they signal what could be the beginning of an uptrend). For the scenarios in Figures 2 and 4, you would prefer to be short, and for the scenarios in Figures 5 and 6, you would be happy to remain with your position.

So what is the difference between Figures 1 and 3, Figures 2 and 4, and Figures 5 and 6? To find out, draw an imaginary gradient line connecting the starting and ending closing prices for the selected period (see the red line in Figures 16). For the scenarios in Figures 1 and 3, note that most of the closes for the period remain below this line. In addition, the gradient line slopes upward.

For Figures 2 and 4, most of the closes were above the gradient line for the chosen period, and the gradient line slopes downward. For Figure 5, most of the closes remain above the gradient line (which is the same as Figures 2 and 4), but its gradient line slopes up instead of down. Finally, Figure 6 shows the majority of the closes below the gradient line (which resembles Figures 1 and 3), but it displays a downward- sloping gradient line.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order