Sorry, Amar, But AFL's are not BAKWAS. Maybe the one you have tried are not upto the mark . But certain AFL's give very good returns. See, we don't know when the market will turn from sideways to trending, so a good AFL will give you less points of loss when the market is sideways, but when the market starts trending , you will get good profits.
Anyone has this AFL?
- Thread starter deepanshah13
- Start date
Dunnigan's Thrust Method:
Downswing is defined as a decline in which the current day's high and low are both lower than the corresponding high and low of
the highest day of the prior upswing.
The reverse effect of having both a higher high and low would result in a change from a downswing to an upswing. The top and
bottom of a swing are the highest high of an upswing and the lowest low of a downswing, respectively. It should be noted that a
broadening or consolidation day, in which the highs and lows are both greater or both contained within any previous day of the
same swing, has no effect on the direction.
In addition to the swings, Dunnigan defines the five key buy patterns:
1. Test of the bottom-where prices come within a predetermined percentage of a prior low
2. Closing-price reversal-a new low for the swing followed by a higher close than the prior day (similar to Engulfing Bull in
candlesticks).
3. Narrow range-where the current day's range is less than half of the largest range for the swing
4. Inside range-where both the high and low fall within the prior range
5. Penetration of the top--by any amount, conforming to the standard Dow theory buy signal
For short selling, the above conditions are reversed.
An entry buy signal was generated by combining the patterns indicating a preliminary buy, with a thrust the next day confirming the
move. The Thrust was defined as a variable price gain based on the price level of the market (similar to ATR multiple). Because of
the risks, the market was asked to give evidence of a change of direction by satisfying two of the first four patterns followed by a
thrust on the next day.
Two key situations for repeat buy signals are:
1. A test of the bottom followed by an inside range (interpreted as market indecision)
2. A closing price reversal followed by an inside range
One-Way Formula
Based on his conclusions that the Thrust Method was too sensitive, causing more false signals that brought down the profitability,
Dunnigan modified the confirmation aspect of the signal and made the Thrust into the preliminary signal. He also emphasized
longer price trends which smooth performance could reduce signals.
With the upswing and downswing rules remaining the same, Dunnigan modified the Thrust to require its entire range to be outside
the range of the prior day. For a preliminary buy, the low of the day must be above the high of the prior day. This is a stronger
condition than his original thrust, yet only constitutes a preliminary buy. The confirmation occurs only if an additional upthrust occurs
after the formation of, or test of a previous bottom. There must be a double bottom or ascending bottom followed by a thrust to get
a buy signal near the lows. If the confirmation does not occur after the first bottom of an adjustment, it may still be valid on
subsequent tests of the bottom.
For the One-Way Formula, repeat signals are identical to original confirming signals. Each one occurs on a pullback and test of a
previous bottom, or ascending bottom, followed by an upthrust. Both the initial and repeat signals allow the trader to enter after a
reaction to the main trend. The Dow approach to penetration is still allowable in the event all else fails. The refinement of the
original thrust method satisfied Dunnigan's problem of getting in too soon.
IF Teacher(Seniors) can develop afl of about method.
Downswing is defined as a decline in which the current day's high and low are both lower than the corresponding high and low of
the highest day of the prior upswing.
The reverse effect of having both a higher high and low would result in a change from a downswing to an upswing. The top and
bottom of a swing are the highest high of an upswing and the lowest low of a downswing, respectively. It should be noted that a
broadening or consolidation day, in which the highs and lows are both greater or both contained within any previous day of the
same swing, has no effect on the direction.
In addition to the swings, Dunnigan defines the five key buy patterns:
1. Test of the bottom-where prices come within a predetermined percentage of a prior low
2. Closing-price reversal-a new low for the swing followed by a higher close than the prior day (similar to Engulfing Bull in
candlesticks).
3. Narrow range-where the current day's range is less than half of the largest range for the swing
4. Inside range-where both the high and low fall within the prior range
5. Penetration of the top--by any amount, conforming to the standard Dow theory buy signal
For short selling, the above conditions are reversed.
An entry buy signal was generated by combining the patterns indicating a preliminary buy, with a thrust the next day confirming the
move. The Thrust was defined as a variable price gain based on the price level of the market (similar to ATR multiple). Because of
the risks, the market was asked to give evidence of a change of direction by satisfying two of the first four patterns followed by a
thrust on the next day.
Two key situations for repeat buy signals are:
1. A test of the bottom followed by an inside range (interpreted as market indecision)
2. A closing price reversal followed by an inside range
One-Way Formula
Based on his conclusions that the Thrust Method was too sensitive, causing more false signals that brought down the profitability,
Dunnigan modified the confirmation aspect of the signal and made the Thrust into the preliminary signal. He also emphasized
longer price trends which smooth performance could reduce signals.
With the upswing and downswing rules remaining the same, Dunnigan modified the Thrust to require its entire range to be outside
the range of the prior day. For a preliminary buy, the low of the day must be above the high of the prior day. This is a stronger
condition than his original thrust, yet only constitutes a preliminary buy. The confirmation occurs only if an additional upthrust occurs
after the formation of, or test of a previous bottom. There must be a double bottom or ascending bottom followed by a thrust to get
a buy signal near the lows. If the confirmation does not occur after the first bottom of an adjustment, it may still be valid on
subsequent tests of the bottom.
For the One-Way Formula, repeat signals are identical to original confirming signals. Each one occurs on a pullback and test of a
previous bottom, or ascending bottom, followed by an upthrust. Both the initial and repeat signals allow the trader to enter after a
reaction to the main trend. The Dow approach to penetration is still allowable in the event all else fails. The refinement of the
original thrust method satisfied Dunnigan's problem of getting in too soon.
IF Teacher(Seniors) can develop afl of about method.
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