A trading strategy based on OBV, CMO and CAPCK curves is a composite strategy built by combining OBV, CMO and CAPCK indicators. This strategy comprehensively considers the three dimensions of market long-short heat, short-term and medium-term trends and long-term trends to form trading signals to achieve more reliable entry.
First, the principle of strategy
The trading signals** of this strategy are based on a combination of the following three indicators:
1. OBV Energy Tide: It was developed by Joseph Granville in the United States in 1963. OBV measures the market's ** and selling pressure by calculating changes in trading volume, which is a volume-price analysis method that reflects the strength of long and short forces. OBV** stands for the strengthening of multi-party forces, and OBV** represents the strengthening of the air forces.
2. CMO: Chande Momentum Oscillator (CMO) is a tool developed by Tushar SChande), unlike other momentum oscillators such as the Relative Strength Index (RSI) and the Stochastic Index (KDJ), the Chand Momentum Indicator uses the data of **day and **day in the numerator of the calculation formula. The CMO indicator is looking for extremely overbought and extremely oversold conditions, reflecting the trend of the rate of change in the short and medium term. CMO is positive and represents a trend in the short and medium term, and CMO is negative to represent a trend. It is calculated as follows:
cz1:=if(close-ref(close,1)>0,close-ref(close,1),0);
cz2:=if(close-ref(close,1)<0,abs(close-ref(close,1)),0);
su:=sum(cz1,n);
sd:=sum(cz2,n);
cmo:(su-sd)/(su+sd)*100;
3. Coppock: The wave estimation index was proposed by Edwin Sedgwick Coppock in 1962 and reflects the trend of the long-term rate of change. The Coppock Curve, also known as the "Wave Estimation Curve", measures the momentum of the market by calculating the weighted average of the rate of change of the market**, and is a long-term indicator. The coppock curve upwards represents the long line in the ** phase, and the downward represents the ** phase. It is calculated as follows:
roc1:=(close-ref(close,n1))/ref(close,n1)*100;
roc2:=(close-ref(close,n2))/ref(close,n2)*100;
rc:=roc1+roc2;
coppock:ema2(rc,m);
A signal is generated when the OBV rises and the CMO and CAPCK curves are at the same time. This means that the multi-party forces are strengthened, and they are in the first channel in the medium and long term, and they are long; Conversely, a sell signal is generated when the OBV decreases and the CMO and CAPCK curves are simultaneously**. This means that the power of the bears has strengthened, and the medium and long-term downward channel has been opened and shorted.
Second, the advantage analysis
The biggest advantage of this strategy is that it comprehensively considers the three dimensions of the market's long and short heat, short- and medium-term trend and long-term trend, and ensures that the trend is consistent from the trading volume, short-term and long-term levels before generating trading signals, so it can effectively avoid false breakouts. At the same time, while using the sensitivity of CMO to grasp short-term opportunities, the COPCK curve provides long-term filtering to ensure that the general direction is correct. In addition, this strategy also uses the construction of two-way signals to buy and sell, which can achieve better capital utilization.
List of high-quality authors 3. Risk analysis.
The main risk of this strategy is that the ROC calculation cycle used by the COPPOCK curve and CMO is long and there is a certain lag. When market events move violently, the COPPOCK curve and CMO indicators may delay making judgments. In this case, it is necessary to rely on the rapid determination of OBV. However, OBV, as an accumulation energy line, will also have a few ** lags for emergencies.
In addition, the three indicators are simply combined together for judgment without considering the weight setting between the indicators, which will also affect the accuracy of the judgment.
Fourth, optimize the direction
The strategy can be optimized from the following aspects:
1. Adaptive ROC cycle setting is used for COPPOCK curve and CMO indicators, so that the parameters of the indicators can automatically adapt to the frequency of market changes.
2. Increase the weight setting of indicators, so that some indicators with more accurate judgment play a leading role and improve the stability of the signal.
3. Add take-profit and stop-loss strategies, such as equity drawdown, take-profit and stop-loss, dynamic trailing take-profit and stop-loss, time stop-loss, etc., to effectively control the maximum loss of a single transaction.
5. Summary
The trading strategy based on OBV, CMO and COPPOCK curves combines the advantages of multiple indicators to ensure that the market long-short situation and the medium- and long-term trend converge to generate trading signals. The main advantage is that the signal is stable and reliable, effectively avoiding false breakouts, and can effectively track the medium and long-term trend and obtain stable returns. Through continuous optimization and strict money management, risks can be greatly reduced and strategies can be made more reliable.