Using Fractal Adaptive Moving Averages in Stock Movements (FRAMA)
After reading several articles on using FRAMA as a method to time entry into markets, I built a spreadsheet to monitor Indices. There is already a great deal written about FRAMA that goes into the calculations and methodology as a trading strategy. For more information about FRAMA, please see this outstanding site that goes into detail:
Fractal Adaptive Moving Average (FRAMA)
Unfortunately, my trading platform does not have FRAMA built in as an indicator. Using FRAMA for day-trading is done by some traders who customize python scripts on certain platforms. But that probably reaches the limits of my time, and access to those platforms. In the article above, FRAMA is discussed as a method for swing trading, not day-trading. So using a spreadsheet to track buy/sell points is a viable option. The idea about FRAMA is that as prices converge and cluster, the adaptive average responds more slowly. This makes it highly reactive/adaptive with price changes.
Using the default values for FRAMA, with Ehlers' W=-4.6, I built a spreadsheet where I could easily plug in values and forecast buy/sell points. While FRAMA is an interesting concept, I've still been tentative to execute the buy/hold points. For starters, sometimes the Buy/Hold signals can flip numerous times until a longer trend develops. However, the FRAMA spreadsheet flashed a BUY signal on 1/8/19. I chose to wait until the average topped up to a point of resistance. If I had executed that buy point, I would have reaped the gains of January and the first part of February.
For posterity, I am posting the FRAMA forecast. As of Friday, 3/22/19, FRAMA flashed a SELL signal for IXIC. This is of important note because the previous signals were all BUYS, however the drop in stock price on Friday's Yield Curve Inversion was significant enough to move the FRAMA threshold down and call for a SELL. I am posting results below and will update as time permits. Of course trading involves risk which you fully own, and I am only supplying this for information and educational purposes.
Scroll to the right to see the Buy/Sell Signal. If the end of day closing price is higher than the FRAMA, it is a BUY. If it is less than FRAMA, it is a SELL.
Fractal Adaptive Moving Average (FRAMA)
Unfortunately, my trading platform does not have FRAMA built in as an indicator. Using FRAMA for day-trading is done by some traders who customize python scripts on certain platforms. But that probably reaches the limits of my time, and access to those platforms. In the article above, FRAMA is discussed as a method for swing trading, not day-trading. So using a spreadsheet to track buy/sell points is a viable option. The idea about FRAMA is that as prices converge and cluster, the adaptive average responds more slowly. This makes it highly reactive/adaptive with price changes.
Using the default values for FRAMA, with Ehlers' W=-4.6, I built a spreadsheet where I could easily plug in values and forecast buy/sell points. While FRAMA is an interesting concept, I've still been tentative to execute the buy/hold points. For starters, sometimes the Buy/Hold signals can flip numerous times until a longer trend develops. However, the FRAMA spreadsheet flashed a BUY signal on 1/8/19. I chose to wait until the average topped up to a point of resistance. If I had executed that buy point, I would have reaped the gains of January and the first part of February.
For posterity, I am posting the FRAMA forecast. As of Friday, 3/22/19, FRAMA flashed a SELL signal for IXIC. This is of important note because the previous signals were all BUYS, however the drop in stock price on Friday's Yield Curve Inversion was significant enough to move the FRAMA threshold down and call for a SELL. I am posting results below and will update as time permits. Of course trading involves risk which you fully own, and I am only supplying this for information and educational purposes.
Scroll to the right to see the Buy/Sell Signal. If the end of day closing price is higher than the FRAMA, it is a BUY. If it is less than FRAMA, it is a SELL.
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