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> Tasc - July 2006 - Wilson Relative Price Channel
cskidmore
post Jul 2 2006, 11:41 AM
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VT Systems Senior Business Analyst


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VT TRADER: WILSON RELATIVE PRICE CHANNEL

Leon Wilson's article in this issue, “Evolution Of An Indicator – The Wilson Relative Price Channel” discusses the benefits of allowing range-bound indexes, particularly the Relative Strength Index (RSI) indicator, to adapt to price action by assuming a monetary value similar to a moving average. The Relative Price Channel is Wilson's adaptation of the RSI indicator to price action. We’ll be offering the Wilson Relative Price Channel indicator for download in our user forums. The VT Trader code and instructions for creating this indicator are as follows (each input variable has been parameterized to allow customization):

1. Navigator Window>Tools>Indicator Builder>[New] button

2. In the Indicator Bookmark, type the following text for each field:

Name: Wilson Relative Price Channel
Short Name: vt_WilsonRPC
Label Mask: Wilson Relative Price Channel (RSI: %prcRSI%, %perRSI%, OB: %OBL%, OS: %OSL%, NZ: %NZU%-%NZL%, Smoothing: %Smoothing%, %SmoothingType%)
Placement: Price Frame
Inspect Alias: Wilson Relative Price Channel

3. In the Input Bookmark, create the following variables:

[New] button... Name: prcRSI , Display Name: Channel Price , Type: price , Default: Close
[New] button... Name: perRSI , Display Name: Channel Periods , Type: integer , Default: 34
[New] button... Name: Smoothing , Display Name: Smoothing Periods , Type: integer , Default: 1
[New] button... Name: SmoothingType , Display Name: Smoothing Type , Type: MA Type , Default: Exponential
[New] button... Name: OBL , Display Name: OverBought Level , Type: integer , Default: 70
[New] button... Name: OSL , Display Name: OverSold Level , Type: integer , Default: 30
[New] button... Name: NZU , Display Name: Upper Neutral Zone , Type: integer , Default: 55
[New] button... Name: NZL , Display Name: Lower Neutral Zone , Type: integer , Default: 45

4. In the Output Bookmark, create the following variables:

[New] button...
Var Name: OverBought
Name: OverBought
Line Color: blue
Line Width: thin line
Line Type: dashed line

[New] button...
Var Name: NeutUp
Name: NeutUp
Line Color: blue
Line Width: thin line
Line Type: dashed line

[New] button...
Var Name: NeutLower
Name: NeutLower
Line Color: red
Line Width: thin line
Line Type: dashed line

[New] button...
Var Name: OverSold
Name: OverSold
Line Color: red
Line Width: thin line
Line Type: dashed line

[New] button...
Var Name: UpperChannel_1
Name: UpperChannel_1
Line Color: very light blue
Line Width: thin line
Line Type: solid line

[New] button...
Var Name: UpperChannel_2
Name: UpperChannel_2
Line Color: very light blue
Line Width: thin line
Line Type: solid line

[New] button...
Var Name: NeutralZone_1
Name: NeutralZone_1
Line Color: white
Line Width: thin line
Line Type: solid line

[New] button...
Var Name: NeutralZone_2
Name: NeutralZone_2
Line Color: white
Line Width: thin line
Line Type: solid line

[New] button...
Var Name: LowerChannel_1
Name: LowerChannel_1
Line Color: very light red
Line Width: thin line
Line Type: solid line

[New] button...
Var Name: LowerChannel_2
Name: LowerChannel_2
Line Color: very light red
Line Width: thin line
Line Type: solid line

5. In the Formula Bookmark, copy and paste the following formula:

{Provided By: Visual Trading Systems, LLC © Copyright 2006}
{Description: Wilson Relative Price Channel by Leon Wilson}
{Notes: July 2006 Issue - Evolution Of An Indicator – The Wilson Relative Price Channel}
{Wilson_RPC Version 1.0}

{Create Relative Strength Index}

rsi_r:= (prcRSI - ref(prcRSI,-1));
rsi_rs:= Wilders(if(rsi_r>0,rsi_r,0),perRSI) / Wilders(if(rsi_r<0,Abs(rsi_r),0),perRSI);
_RSI:= 100-(100/(1+rsi_rs));

{Create Cords}

OB:= Mov((_RSI-OBL),Smoothing,SmoothingType);
OS:= Mov((_RSI-OSL),Smoothing,SmoothingType);
UNZ:= Mov((_RSI-NZU),Smoothing,SmoothingType);
LNZ:= Mov((_RSI-NZL),Smoothing,SmoothingType);

OverSold:= prcRSI-(prcRSI*(OS/100));
OverBought:= prcRSI-(prcRSI*(OB/100));
NeutUp:= prcRSI-(prcRSI*(UNZ/100));
NeutLower:= prcRSI-(prcRSI*(LNZ/100));

{Create Relative Price Channels}

UpperChannel_1:= If(OverBought>NeutUp,If(Prev=ref(NeutUp,-1),OverBought,NeutUp),Null);
UpperChannel_2:= If(OverBought>NeutUp,If(Prev=ref(OverBought,-1),NeutUp,OverBought),Null);

NeutralZone_1:= If(NeutUp>NeutLower,If(Prev=ref(NeutLower,-1),NeutUp,NeutLower),Null);
NeutralZone_2:= If(NeutUp>NeutLower,If(Prev=ref(NeutUp,-1),NeutLower,NeutUp),Null);

LowerChannel_1:= If(NeutLower>OverSold,If(Prev=ref(OverSold,-1),NeutLower,OverSold),Null);
LowerChannel_2:= If(NeutLower>OverSold,If(Prev=ref(NeutLower,-1),OverSold,NeutLower),Null);

6. Click the “Save” icon to finish building the Wilson Relative Price Channel indicator.

To attach the Wilson RPC indicator to a chart click the right mouse button within the chart window and then select “Add Indicators” -> "Wilson Relative Price Channel" from the indicator list. Users will have the ability to customize the parameters at this time. Once attached to the chart, clicking the right mouse button over the displayed indicator label and selecting “Properties” allows customization of the parameters.



Attached File(s)
Attached File  vt_WilsonRPC.vtscr ( 1.55k ) Number of downloads: 425
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Bemac
post Jul 2 2006, 12:07 PM
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Hi Chris,

Any chance you could post a screenshot of what this indicator should look like?
Perhaps with a "Sample" set of Inputs.
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cskidmore
post Jul 2 2006, 12:39 PM
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VT Systems Senior Business Analyst


Group: Root Admin
Posts: 20,603
Joined: 16-June 04
Member No.: 4



Hello,

It's likely look a bit funny on lower timeframe charts. I got the impression it was more useful for longer term trading such as daily or even weekly charts. Attach it to a weekly chart and you'll be able to see what it really looks like and how it interacts with price.

Regards,
Chris
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mrippy
post Jul 4 2006, 12:07 AM
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I was really looking forward to this indicator. The concept of visually marking the overbought/oversold areas on the chart itself seemed quite productive. Unfortunately it does not appear to work with lower timeframes like Chris stated. I hope that this does not stop other programmers from designing other indicators with the same design principle. I bet you could do the same thing with just about any other indicator.

Thanks,
Rippy
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