TMA Discussion Thread

[John3344]

Thanks for having this 'dummies' area available.

The TMA Slope on the daily chart looks incredibly accurate in showing where to enter a trades. For example, when it crossed the .4 line on the TMA Slope histogram, a long position would be entered.

Now the 'repainting' issue comes up. I know that on higher time frames indicator 'repainting' is less of an issue (or so I read). But, would I be foolish to do a visual backtest and believe this indicator is as accurate as it appears? Or, would forward testing be the only approach?

Thanks for much for reading my dumb question. I hope I get a really smart answer.

John

[garyfritz]

I'll try for a semi-smart answer. I have no experience with TMA, but I understand repainting.

The trouble is that in Empty4, some indicators plot one value in realtime (when you actually have to make trading decisions), and then a bar or 3 later it changes to something else. So maybe in realtime the indicator said "buy," then the market went down, and the indicator changed to "Buy? I never said buy. Did you say buy??"

So looking at it after the fact, you would think there was no buy signal. In reality you took a loss. That's the danger of repainting indicators. And higher timeframes don't help -- they just give those false signals on a slower chart.

You can use repainting indicators profitably, as long as they settle by the time you get a trade signal. So maybe Indicator 1 says "buy conditions setting up" but you wait for Indicator 2 to say "buy now." If Indicator 1 repaints, it's OK as long as it settles into a fixed value before Indicator 2 fires.

Unfortunately I haven't learned the NB10.2 stuff yet so I can't say how this applies here...

[John3344]

[I have no experience with TMA, but I understand repainting. ]

Garyfritz,

Thanks for your reply, it is very helpful. Repainting indicators have such an allure to them when visually back-testing. I will seek to understand this particular indicator better so that I understand how to use it profitably.

Thanks,

John

[RockyJ]

Here is the doc file on the inde.

[nanningbob]

I understand the concerns of repainting that is why I also added pivot lines and MA lines. You get a signal but where do you enter. That is the key. You dont enter off of the TMA you enter off of the MA lines or pivot lines. That is the protection from the repainting issue. I see the Slope tell me trade time and I look for a good entrance. If I see a weekly or monthly pivot point well dang I know that is a good spot to enter from. So in I go. Not off of the TMA signal but the crossing of the pivot line.

For trending markets it tells me price is angling long. Now I wait for the dip in the UT and enter off of the MA line. However, at some point the angle is not so good anymore. Now I can be more cautious about my entrance. Anyway the booklet deals with the issue and after reading it you will see how I attacked the problem.

[John3344]

I see the Slope tell me trade time and I look for a good entrance.

Yes, this is starting to make sense to me now. The booklet was helpful, but having you explain the use of the TMS Slope indicator the way you just did really improved my understanding.

I'm fortunate to be in the midst of such gifted teachers.

John

[garyfritz]

In case anyone is not aware of this:

From NB's booklets, I thought the TmaSlope_Norm indicator was supposed to be using the "TMA TRUE" calculations, which wouldn't repaint after the fact. His book says "TMA true... tries to keep the TMA lines where they are in real time. It doesn’t allow the TMA to readjust its lines later down the road." The book shows NB 1.2 TmaSlope_Norm and says "this uses TMA TRUE."

I thought the TmaSlope Norm curves looked waaaay too perfect to have been plotted in realtime. Sure enough, I've just been waching the indicator change values as much as TWENTY BARS in the past. It probably goes farther back than that but that's what I saw in a brief look.

Here's a quick example. I watched an M1 chart and marked the current level of the slope indicator just after a bar closed and started a new bar. With a non-repainting indicator, that level would not change at all. But you can see that it did change, quite a bit. In realtime, the slope indicator dropped below 0.8 on the 3rd marked candle. Then the market turned up, and the indicator changed its historic values -- and now it doesn't drop below 0.8 until TEN BARS LATER than it did in realtime. If the market keeps moving up, it will probably repaint its past values to show it never declined at all.

Repaint.gif

From the results people are getting in realtime, it appears that the system works well even with this repainting. But you should be aware that NB 1.2 TmaSlope_Norm does repaint, and does readjust its lines later down the road. Don't do a visual backtest and assume you would have seen the same values in realtime.

[NeoTrader]

Hi Garry,

i don't know why you need to explicitly open a new thread about this topic. NB did wrote in his booklet 2 "2. 10.2 TMA SLOPE INDICATOR 1.4.doc" in the first Lines about this Topic. It is no secret that this is a repainting Indicator and therefore not suited for visual backtesting (as any other repainting indi).
But the repainting doesn't matter since the only valid value of interest is the value below the current candle, that shows the actual strength of the current currency move. This is the main strength of this indicator and the only thing that matters (IMHO).
All lines after the current Line are not really interesting since they are repainted and also in the past.

may the pips be with you...

[garyfritz]

I understand that. I just thought that some people might see that appealing indicator, and NOT see NB's note, and think they could create their own approach. I wanted to make it clear that what you see in history is not what you'll see in realtime -- which was not what I expected given NB's comment in his book.

NB's approach works. Stick with that.

[SWG123]

Hi Garry,

i don't know why you need to explicitly open a new thread about this topic. NB did wrote in his booklet 2 "2. 10.2 TMA SLOPE INDICATOR 1.4.doc" in the first Lines about this Topic. It is no secret that this is a repainting Indicator and therefore not suited for visual backtesting (as any other repainting indi).
But the repainting doesn't matter since the only valid value of interest is the value below the current candle, that shows the actual strength of the current currency move. This is the main strength of this indicator and the only thing that matters (IMHO).
All lines after the current Line are not really interesting since they are repainted and also in the past.

may the pips be with you...

Gary is an avid backtester (thank goodness ). Here, I think he's only warning the gullible about viewing historical charts and jumping to unjustified conclusions. In practice, trading off D1 or H4, I don't see any issue.