Kase StatWare V 9.8.1 Manual
Kase StatWare V 9.8.1 Manual
Kase StatWare V 9.8.1 Manual
FOR TRADESTATION
505-237-1600
fax:
866-526-2350
email: [email protected]
Introduction
Trading is primarily a function of three tasks: entry, money management and exit. You
will find that the Indicators in the Kase StatWare package will help you to perform all
three tasks in a more efficient and successful manner. Where many older indicators are
based on empirical observations, we now have the ability to derive indicators from the
natural structure of the market itself. Patterns that were difficult to observe with primitive
tools now emerge with computer-based statistical examination.
This manual has been written to explain the StatWare indicators and to give traders an
increased understanding of the markets in order to diminish risk and increase profits.
Keep in mind that the Kase indicators are tools that support a methodology and not a
black box system. A traders personality and experience will play a role in his or her
experience in using Kase StatWare.
1.2
2.2
2.3
Time-Based Charts.................................................................................................. 3
2.4
2.5
2.6
2.7
2.8
2.9
3.2
4.1.1
4.1.2
4.1.3
4.2
4.2.1
4.2.2
4.2.3
4.2.4
4.3
4.3.2
4.3.4
4.3.5
4.3.6
4.3.7
5.2
5.3
5.3.1
5.3.2
5.3.3
5.4
5.5
Scaling Up ............................................................................................................. 34
5.6
5.6.1
5.6.2
5.6.3
5.6.4
5.6.5
5.6.6
5.6.7
5.6.8
5.6.9
5.7
6.2
6.3
6.4
Chapter 7 - Troubleshooting
7.1
7.2
7.3
7.4
7.5
The more the market is trending, the longer the time frames, and the more choppy the market, the
shorter the time frames. Also active traders may decide to scale up to longer time frames during
well-established trends. We recommend less active traders hold trades for at least a few days to a
number of weeks to look for long-term entry and exit signals on one-quarter to one-third day
charts, half day charts, and daily charts. There are three ways Kase recommends to determine bar
lengths.
..KaseHarami_v981
..KasePiercing_v981
The T or K after the indicator name means that the defaults are set for Time or Tick or Kase
bars. Hold down the Ctrl key and click each indicator you wish to add. We suggest that you load
at least the four core indicators. These four indicators comprise those used in the basic Kase
approach to trading with StatWare. The other indicators might be placed on the chart as hidden
or used on a secondary chart for reference. The Candlestick Indicators are normally only used on
one-quarter day charts and higher.
With all four core indicators on the screen, your chart should appear as follows:
Typical Kase StatWare Chart Set-Up
4. Highlight Import EasyLanguage File (ELD, ELS, or ELA) and click Next
8
5. Click the Browse button and navigate to the folder where you saved the new password file.
Highlight the file and click Open. The path of the StatWare ELD file should now appear in
the File Name box. Click Next
6. In the next menu, ensure that the box next to Function is checked. Click Next.
7. Now, a function named passKey_v981 should appear. Make sure that the box to the left of it
is checked and click Finish. Click OK or Yes to any message boxes that come up, including
one asking whether youd like to replace the existing passKey_v981 function. Your
indicators will now continue to function until the date in the name of your password storage
file.
DevStops allow profits to run and losses to be minimized. Setting stops based on statistical
probabilities of being stopped out allows profit to be taken or losses to be cut at levels where the
probability of a particular trade remaining profitable is low.
Two versions of the Kase DevStops are included in the installation package for StatWare v_90;
*KDevStops_v981T and *KDevStops_v981K. This is because the default settings are slightly
10
different. *KDevStops_v981T uses standard deviations of 1, 2.2 and 3.6 equivalent to the
normal bell curves 1, 2, and 3. The *KDevStops_v981K uses 2.1, 5.5 and 8.9 equivalent to the
time or tick volume intervals stop levels.
4.1.1.1
KDevStops Inputs
NumBars is the number of bars used to calculate the average Double True Range (DTR) and its
related standard deviation.
Dev1, Dev2, and Dev3 are three stop levels associated with reversals equivalent to the input
Value against the highest high if long or lowest low if short. The default values of these variables
are recommended most of the time. However large gaps or large changes in price during short
period can blow out the standard deviation, in which case, the stops may be narrowed to
compensate for this by decreasing the Value. For example, Dev2 for _v981T may be
11
decreased from 2.2 to 1.7. During very choppy markets where stops may be hit due to erratic
market activity, and not due to a statistically significant move, the stops may be widened. In this
case, Dev2 might be increased from 2.2 to 2.8.
BarsInFMA and BarsInSMA are the number of bars used in the calculation fast and slow
moving averages. These moving averages are used to default the DevStops to long when the
FMA is above the SMA or short when the FMA is below the SMA. During very trending
markets the moving average can be limited from flipping by lengthening the value settings, or
during oscillating markets the moving averages can be made to flip sooner by shortening the
value setting.
4.1.1.2
Plot Name
Description
Color
Type
Warning
Dark red
Dashed line
Dev1
Dark red
Point
Dev2
Dark red
Point
Dev3
Dark blue
Point medium
12
and second class meaning that the signal is not in the same direction as a higher bar length
filter. Each bar has color-coded points to denote first or second-class long and short signals.
Small points are used for bars that do not have the proper structure to allow an entry, for example,
a first class buy bar with a down close, and a lower high and lower low. Large points are used for
bars that do have the proper structure to allow an entry such as a first class buy bar that had a
higher high, higher low and closed up, but do not follow a valid swing.
Traditionally, Kase has taught traders to take second entry signals. This means that the first
signal in a new trend is treated as a warning signal and the second signal after a valid pullback is
taken as the entry. This is a more conservative strategy, but does not have to be deployed by
more aggressive traders. KEES identifies the first signal and color codes it light blue for longs
and orange for shorts.
4.1.2.1
KEES Inputs
OutsideReversals: is used to control the entry rules used for outside bars. An outside bar
is a bar that has a higher high and lower than previous bar. This variable only effects outside bars
that reverse the direction of the close when compared to the previous bar. The rule comes into
play when the variable is set to true.
13
OutsideSames: is used to control the entry rules used for outside bars. An outside bar is a bar
that has a higher high and lower than previous bar. This variable only effects outside bars that
close in the same direction of the previous bar. The rule comes into play when the variable is set
to true.
Dots: is used to turn the color coded dots on and off for each bar. These dots help traders
identify the underlying permission and class for each bar.
Length: is the value used for the momentum indicator lookback that is applied to the
underlying synthetic longer bar length filter.
14
Multiplier is the number of bars used to create the synthetic longer bar length. For instance,
if KEES_v981 is applied to a 10-minute chart and Multiplier is set to 3, then the last three
10-minute bars are combined to create a synthetic 30-minute bar.
4.1.2.2
Plot name
Description
Color:
L1 Entry
Blue
Large Point
L2 Entry
Dark Cyan
Large Point
L1
Blue
Point
L2
Dark Cyan
Point
S1 Entry
Magenta
Large Point
S2 Entry
Red
Large Point
S1
Magenta
Point
S2
Red
Point
15
1. Overbought or Oversold conditions. The KasePO and KaseCD identify overbought and
oversold conditions with PeakOut signals, shown by a P for the KasePO PeakOuts and a
K for the KaseCD PeakOuts. A PeakOut is a positive histogram peak above an overbought
line or a negative histogram peak below an oversold line. The Signals are colored when they
occur under normal conditions and gray when they are weak. Weak signals indicate that the
confirmation bar closed against the direction of the signal (i.e. a bearish PeakOut when the
confirmation bar closes up).
2. Momentum Divergence. The indictors generate standard bullish and bearish divergence
signals.
a. Bearish divergence takes place when prices have made a higher or equal high and a
momentum indicator has made a lower or equal positive peak.
b. Bullish divergence takes place when prices have made a lower or equal low peak and a
momentum indicator has made higher or equal (i.e. less negative) negative peaks.
c. Normal signals are shown as a solid line (green for KasePO and red for KaseCD)
d. Weak signals are shown as a dotted line (green for KasePO and red for KaseCD)
The KaseCD is a sensitive, second derivative indicator, calculated in the same way as the MACD
histogram is calculated from a moving average oscillator. Namely, the KaseCD is the difference
between the KasePO and its average, just as the MACD is the difference between an exponential
16
moving average oscillator and its average. Because the KaseCD automatically adapts to
changing market conditions, it can be seen to generate cleaner crossover signals and more
reliable divergences than the MACD.
Automated Divergence Function - The KasePO and KaseCD include an algorithm that
automatically draws bullish and bearish divergences between peaks on the price chart. This
highly sophisticated function will also trigger alerts if enabled through TradeStation whenever a
divergence is plotted. Divergences for the KasePO are defaulted to plot as green lines and for the
KaseCD as red lines
4.1.3.1
ShowAllDivs: Many times, after a divergence has taken place, additional divergences will
form from the same starting peak. Setting ShowAllDivs to true will show all the divergences
from a given starting peak. Setting ShowAllDivs to false will show only the most recent
divergence from a given starting peak
slopeFilter: Rounded or insignificant histogram peaks can be filtered out by requiring a
certain slope, in terms of percent of the histogram value to be met. If that slope is less than
slopeFilter, the peak is considered too shallow and is filtered out. A setting of 0 filters out
no peaks. A filter of 0.01 filters out all peaks less than 1% higher than the surrounding data.
tolerance: For divergences or PeakOuts to be valid, peaks in price and momentum must
occur within a certain number of bars or tolerance of each other, but not necessarily on the
same bar. The input variable tolerance represents the maximum number of bars allowed
between price and histogram peaks for a valid divergence or PeakOut signal. A default of 3 is set
based on optimization tests. Increasing tolerance will generate more signals and vice versa.
numBars: This is the maximum number of bars between the swing highs or lows used to
determine divergence. So a setting of 40 means that divergence peaks that are within 40 bars of
each other will show on the screen, and those farther apart will not. Increasing numBars will
generate more signals and vice versa.
17
peakStdDev: This is the number of standard deviations of the local data used to calculate
PeakOut levels. Increase the number of standard deviations to make the PeakOuts less sensitive,
and take place less often, and vice versa.
peakFixed: This is a baseline based on historical studies to calculate PeakOut levels. Increase
this setting to make the PeakOuts less sensitive and vice versa.
shortCycle and longCycle control the range of shortest and longest cycle lengths used to
determine significant trend. During very trendy markets, lengthen the settings, and during
choppy oscillating markets shorten them.
BridgeFilter: Bridging is a filter that is used to ensure that the price peaks for a divergence
are taking place in the same general trend/direction. The BridgeFilter is the number of
18
allowable swings that take place between the beginning peak and high/low peak of a divergence
range. The illustration below shows the peaks/swings that the filter checks for a bullish
divergence. The logic is the opposite for bearish divergence.
In this illustration the SL1 (Swing Low 1) and SL2 (Swing Low 2) are price swings that are
being compared for divergence by Kases divergence algorithm (momentum is not shown, but is
assumed to be rising for a bullish divergence like this). The bridging filter checks the number of
swings (or peaks) between SL1 and HH (highest high between SL1 and SL2). If the number of
bridging peaks is equal to or greater than the value set for BridgeFilter then the divergence
is considered to be bridging and is nullified.
The idea here is that SL1 was a swing that took place during an uptrend and SL2 took place
during a downtrend. Therefore, the two swing lows should not be compared for a valid
divergence signal.
Setting BridgeFilter to zero (0) will nullify all divergences. The higher these variables are
set, the more swings the algorithm will allow between SL1 and HH.
19
PeakFilter: This is the minimum histogram value that the momentum must overcome to be
used as a measuring peak for momentum divergence and overbought/oversold signals like
PeakOuts and KCDpeaks.
4.1.3.2
Plot name
Description
KPOPeak
Histogram Peak
PO
Histogram No Peak
Dark Green
Histogram
PeakOut Line
Blue
Line
4.1.3.3
Color:
Black
Type:
Histogram
Plot name
Description
Color:
Type:
KCDPeak
Histogram Peak
Red
Point
KCD
Histogram
Dark Green
Histogram
PeakOut Line
Magenta
Histogram
20
computes a synthetic longer bar length that updates upon the completion of each shorter bar, and
calculates a moving Stochastic, that can be used to effectively screens trades on a longer bar
length.
4.2.1.1
multiplier determines the number of shorter bars included in the longer bar length used in
the Permission Stochastic. Higher values result in more short bars being used in the calculation
of the longer bars. For example, if using a 20 minute bar for trading, a setting of 3 would result
in a longer bar length of 60 minutes. t. The longer the higher-level filter multiplier, the less
sensitive the indicator will be to shorter-term price action. The default input is 5.
length is the number of longer bars used to calculate the Permission Stochastic. Its default
value is 9. To slow the indicator and make it less sensitive, increase the Stochastic length by
changing it from 9 to a higher value, such as 13. To speed up the indicator, do the opposite.
4.2.1.2
Plot name
Definition
Color:
Type:
PermK
Equivalent of Slow K
Dark magenta
Broken line
PermD
Equivalent of Slow D
Black
Solid line
21
Permission Screen histogram is dashed dark magenta, then short trades on the normal bar length
chart may be taken.
4.2.2.1
Plot name
Definition
Color:
Type:
PermLong
Equivalent of PermK
Dark green
Histogram
PermShort
Equivalent of PermD
Dark magenta
Broken histogram
22
As shown in the chart below, after a high swing formed, there was one falling bar and then one
rising bar. Because MinSize = 1 a swing can be drawn at the low of the falling bar and the high
of the rising bar.
Drawing MinSize = 1
If the MinSize = 2 there must be two falling bars and two rising bars in order for a swing to be
drawn, as shown in the right sketch. Otherwise, as shown on the left, if there is only one falling
bar and then another rising bar no swing is drawn.
Drawing MinSize = 2
For MinSize = 3 the same rules as above apply, but in this case there must be at least three rising
or falling bars before a swing can be drawn.
23
Drawing MinSize = 3
By default a Size of 2 is normally used, but 1 and 3 are commonly used as well. The lower
the number the more detail the indicator shows.
4.2.3.1
KaseSwing Inputs
MinSize: changes the tolerance for the number of bars that must take place between high and
low swings. The most sensitive setting is 1. Settings of 2, which is the default, and 3 are also
allowable. A setting of 3 is the least sensitive.
ConsiderInsides: uses special inside bar rules when drawing swings.
TextColor: changes the color of text on the screen that labels the swings
DecimalFormat: There are some commodities that dont trade in the normal decimal
convention. Setting DecimalFormat to 1 will automatically display the text labels in the
correct units and precision. A setting of 0 displays the text labels in decimals regardless of the
units displayed on the chart, and automatically finds the correct precision. A setting greater than
0 will display that many decimals, regardless of the precision or units of the chart.
TLColor: changes the trend line color.
TextOn: turns swing labels on or off.
24
All colors and styles for KaseSwing are controlled by the inputs described above.
The inputs for KRev are the same as for the Kase DevStops, expect that it does not include
BarsInFMA or BarsInSMA.
NumBars, Dev1, Dev2, and Dev3 are all as described above for the Kase DevStops Indicator.
4.2.4.2
Plot name
Description
Color:
Type:
Warn
Dark Red
Solid line
Rev1
Dark Blue
Solid line
Rev2
Dark Blue
Solid line
Rev3
Dark Blue
Solid line
25
Bullish Engulfing
Bearish Engulfing
26
4.3.3.1
Plot name
Description
Color:
Bullish engulf
Dark blue
Bearish engulf
Dark blue
Type:
Cross below low
Cross on high
4.3.4.1
Plot name
Description
Color:
Type:
MorStar
Morning Star
Red
EveStar
Evening Star
Red
Cross on high
27
Hammer - Bullish
4.3.5.1
Plot name
Description
Color:
Type:
Hammer
Bullish Hammer
Yellow
Cross on low
HangingMan
Yellow
Cross on high
28
4.3.6.1
Plot name
Description
Color:
Type:
BearHarami
Marks pattern
Green
BullHarami
Marks pattern
Green
29
4.3.7.1
Plot name
Description
Color:
Type:
Piercing
Dark red
DarkCld
Dark red
30
31
and closed up. Further the indicator marks first and second buy and sell signals to make
identifying entries easier.
A first signal is the initial instance of a long or short signal. A second buy signal is one that
occurs after a pullback wherein the previous swing low is held. A second sell signal is one that
occurs after a pullback wherein the previous swing high is held. Both first and second signals are
also marked with an L for buy signals and an S for sell signals. Kase recommends waiting for
second signals most of the time, however, valid entries can be used at any time when traders
wish to exercise discretion.
32
Re-Entry Signal
33
and exit signals are triggered. These danger and exits signals, and the suggested stop levels
should danger or exit signals take place, are set forth below in Section 5.6.
5.5 Scaling Up
Once a trade has been entered and at stop placed at Dev3 monitor for exits as described in
Section 5.6 on the timing chart. At the same time check the fast monitor for a confirming entry
signal in the direction of the trade (i.e. long or short). Once a confirming signal is received on the
longer bar length, the trade can be scaled up to that chart by moving the stop to the respective
Dev3 for the fast monitor. The fast monitor may then be used to watch for exits. Now begin to
look for a confirming entry signal on the normal monitor chart and repeat the scaling process.
The goal is to continue scaling a trade to longer bar lengths so that premature exits or whipsaws
can be avoided and profits can run as markets trend. More risk is taken when stops are moved to
Dev3 on the longer bar lengths, but the confirming entry signals usually indicate the market is
continuing to move in the profitable direction. If no confirming signal is triggered on the longer
bar lengths and there is an exit signal generated, drop back to the flat position and monitor for a
reentry as set forth in Section 5.3.1.
The chart below shows a scaling situation where the confirming entry signal comes after a trade
has been entered. A 15-minute chart is shown on top and the 45-minute chart on the bottom.
Here a second sell signal triggered a short entry at 1:45 PM. On the next 45-minute bar at 2:15
PM a confirming sell signal formed. Confirming signals must be designated by an S for short
and an L for long, but can be first signals. At that point the trade is scaled to the 45-minute
chart and the stop placed at Dev3, and accelerated thereafter as appropriate.
34
The confirmation signal does not always come after the entry signal. As shown on the left below,
the confirmation signal formed on the same bar as the second entry signal. In this case the trade
can be scaled to the longer bar length upon entry.
Scaling Up Confirmation Same
It is rare, but in some instances the confirmation signal will trigger before the second buy signal
on the smaller bar length. This is shown in the chart on the right above. In this case, once the
second buy has been triggered on the timing chart, and a trade entered long, it can be
immediately scaled to the longer bar length.
35
Signal Description
Recommended Action
1.
100%
2.
80% + Dev1
Any KCDpeak
50% + Dev1
4.
5.
No Signal
100% at Dev3
36
37
38
from the normal monitor to the daily chart using the same scaling rules outlined in Section 5.5.
Position holders can also use half- and third-day charts to monitor for exits and warning signals.
The list below outlines some of the slightly modified guidelines for position holders.
1. When there are no exit signal setups, set default stop to Dev 3
2. Use candlesticks to accelerate stops as necessary (outlined in Section 5.7 below)
3. If there is no profit in the trade after 3 to 5 bars, exit on inactivity.
40
41
Stop at Confirmation
The example on the right shows an instance where the Harami line and star is completed, but not
yet confirmed. Dev1 would be accelerated to the completion point. Dev2 would become the
lower of Dev1 or the confirmation point.
42
6.2.1 KasePO
The KasePO is a first derivative momentum indicator that is used to measure the rate of change
of price. Its signals are traditionally used to identify potential stalling and turning points. Kase
uses the KasePO divergence and PeakOut signals as a warning or exit signal for profit taking
opportunities.
43
Function Name
KasePO_divergence
int
-2, -1, 0, 1, 2
KasePO_peak
int
-2, -1, 0, 1, 2
KasePO_value
KasePO_poval
double
double
N/A
N/A
6.2.1.1
Description
KasePO divergence signal
-2 = normal bearish
-1 = weak bearish
0 = no signal
1 = weak bullish
2 = normal bullish
KasePO PeakOut signal
-2 = normal bearish
-1 = weak bearish
0 = no signal
1 = weak bullish
2 = normal bullish
momentum value of KasePO histogram
value of KasePO overbought/oversold threshold
KasePO_divergence
Bullish and bearish divergences are the strongest signals generated by the KasePO. Bearish
divergences take place when prices rise to new price swing highs, are within numBars of one
another, and line up within tolerance of momentum peaks that are declining (both momentum
peaks must be positive). Bullish divergences take place when prices fall to new price swing lows,
are within numBars of one another, and line up within tolerance of momentum peaks that are
rising (both momentum peaks must be negative).
Variable
shortCycle
longCycle
Default
8
65
slopeFilter
0.01
tolerance
numBars
55
MaxBridgingPeaks
PeakFilter
id
44
6.2.1.2
KasePO_peak
A PeakOut is a pinpointed overbought or oversold signal that is generated when the momentum
value of the KasePO rises above the overbought/oversold threshold. The overbought/oversold
threshold is the lesser of the peakFixed or the peakStdDev. When momentum peaks above this
threshold and there is a price peak within tolerance a PeakOut will be triggered.
Variable
shortCycle
longCycle
Default
8
65
peakStdDev
2.25
peakFixed
200
peakStdDev.
slopeFilter
0.01
0 to 0.05
tolerance
0 to 4
PeakFilter
0 to 25
id
0-32700
6.2.1.3
KasePO_value
The value of the KasePO indicates the strength of momentum. The KasePO yields either positive
or negative momentum, and has a zero line. It is normally plotted as a histogram. Unlike other
momentum indicators it is not bound between 0 and 100.
Variable
shortCycle
longCycle
id
Default
8
65
1
Reasonable Range
5 to 21
34 to 144
0-32700
6.2.1.4
KasePO_poval
Description
Minimum lookback for dynamic range
Maximum lookback for dynamic range
Identification number for DLL reference.
The KasePO_poval (or PeakOut value) is the value of the overbought/oversold threshold for the
KasePO. When momentum is positive the KasePO_poval is positive and an overbought
threshold. When momentum is negative the KasePO_poval is negative and an oversold
threshold. The KasePO_poval is the lesser of the peakFixed and peakStdDev values.
45
Variable
shortCycle
longCycle
Default
8
65
peakStdDev
2.25
peakFixed
200
peakStdDev.
id
0-32700
6.2.2 KaseCD
The KaseCD is a second derivative momentum indicator that is used to measure the rate of
change of the KasePO. The KaseCD is generally a faster and more sensitive momentum
indicator than the KasePO. Its signals are traditionally used to identify potential stalling and
turning points. Kase uses the KaseCD divergence and KCDpeak (or PeakOut) signals as a
warning or exit signal for profit taking opportunities.
Function Name
KaseCD_divergence
int
-2, -1, 0, 1, 2
KaseCD_peak
int
-2, -1, 0, 1, 2
KaseCD_value
KaseCD_poval
double
double
N/A
N/A
6.2.2.1
Description
KaseCD divergence signal
-2 = normal bearish
-1 = weak bearish
0 = no signal
1 = weak bullish
2 = normal bullish
KaseCD PeakOut signal
-2 = normal bearish
-1 = weak bearish
0 = no signal
1 = weak bullish
2 = normal bullish
momentum value of KaseCD histogram
value of KaseCD overbought/oversold threshold
KaseCD_divergence
Bullish and bearish divergences are the strongest signals generated by the KaseCD. Bearish
divergences take place when prices rise to new price swing highs, are within numBars of one
another, and line up within tolerance of momentum peaks that are declining (both momentum
peaks must be positive). Bullish divergences take place when prices fall to new price swing lows,
are within numBars of one another, and line up within tolerance of momentum peaks that are
rising (both momentum peaks must be negative).
46
Variable
shortCycle
longCycle
Default
8
65
slopeFilter
0.01
tolerance
numBars
55
MaxBridgingPeaks
PeakFilter
15
id
6.2.2.2
KaseCD_peak
A KCDpeak is a pinpointed overbought or oversold signal that is generated when the momentum
value of the KaseCD rises above the overbought/oversold threshold. The overbought/oversold
threshold is the lesser of the peakFixed or the peakStdDev. When momentum peaks above this
threshold and there is a price peak within tolerance a KCDpeak will be triggered.
Variable
shortCycle
longCycle
Default
8
65
peakStdDev
peakFixed
90
slopeFilter
0.01
tolerance
PeakFilter
15
id
47
6.2.2.3
KaseCD_value
The value of the KaseCD indicates the strength of momentum. The KaseCD yields either
positive or negative momentum, and has a zero line. It is normally plotted as a histogram. Unlike
other momentum indicators it is not bound between 0 and 100.
Variable
shortCycle
longCycle
id
6.2.2.4
Default
8
65
1
Reasonable Range
5 to 21
34 to 144
0-32700
Description
Minimum lookback for dynamic range
Maximum lookback for dynamic range
Identification number for DLL reference.
KaseCD_poval
The KaseCD_poval (or KCDpeak value) is the value of the overbought/oversold threshold for
the KaseCD. When momentum is positive the KaseCD_poval is positive and an overbought
threshold. When momentum is negative the KaseCD_poval is negative and an oversold
threshold. The KaseCD_poval is the lesser of the peakFixed and peakStdDev values.
Variable
shortCycle
longCycle
Default
8
65
peakStdDev
peakFixed
90
id
48
The idea here is that SL1 was a swing that took place during an uptrend and SL2 took place
during a downtrend. Therefore, the two swing lows should not be compared for a valid
divergence signal.
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Setting MaxBridgingPeaks to zero (0) will nullify all divergences. The higher these variables are
set, the more swings the algorithm will allow between SL1 and HH.
Return Range
KEES_entry
int
KEES_status
int
KPermSto_permk
KPermSto_permd
double
double
N/A
N/A
KPermFunction
int
-1, 0, 1
Description
KEES entry signal
-3 = first class short
-2 = second class short
-1 = warning short
0 = no signal
1 = warning long
2 = second class long
3 = first class long
KEES bar status
-4 = first class short entry
-3 = first class short non-entry
-2 = second class short entry
-1 = second class short non-entry
0 = no status
1 = second class long non-entry
2 = second class long entry
3 = first class long non-entry
4 = first class long entry
value of PermK (akin to Stochastic %K)
value of PermD (akin to Stochastic %D)
status of longer bar length filter
-1 = short
0 = neutral
1 = long
6.3.1 KEES_entry
KEES examines a series of momentum indicators, swings, bar lengths, and bar formations to
color-code each bar and then decide which bars are permissioned for long or short entries. There
are three classes of entries, warning, first class, and second class. A warning signal is the first
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signal that takes place in a potential trend. Frist class signals are bars that are permissioned in the
direction of the trend on both the bar length being used and the synthetic longer bar length filter
(which is set by Multiplier). These signals are akin to the L or S that is shown when KEES is
plotted on a chart.
Variable
Default
Length
Multiplier
id
9
3
1
6.3.2 KEES_status
KEES examines a series of momentum indicators, bar lengths, and bar formations to color-code
each bar and then decide which bars are permissioned for long or short entries. Every bar on the
chart is color coded, but not all bars are permissioned for a potential entry. Bars are either
permissioned as first or second class and as entry or non-entry. Frist class bars are permissioned
in the direction of the trend on both the bar length being used and the synthetic longer bar length
filter (which is set by Multiplier). These signals are akin to the color and dot size that is displayed on
each bar when StatWare is plotted on a chart.
Variable
Default
Length
Multiplier
id
9
3
1
Default
Length
Multiplier
id
9
3
1
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6.3.4 KPermFunction
The KPermFunction is a simplified version of the KPermSto that returns long or short
permissions based upon the status of the PermK and PermD lines. When PermK is greater than
PermD the permission is long. When PermK is less than PermD the permission is short.
Variable
Default
Length
Multiplier
id
3
1
6.4.1 KDevStops_price
The KaseDevStops are plotted as either long stops (below the market and subtracted from the
most recent swing high), or short stops (above the market and added to the most recent swing
low). The long/short crossover is controlled by a simple moving average crossover that is set
using BarsInFMA (fast moving average) and BarsInSMA (slow moving average). When the value of
BarsInFMA is greater than BarsInSMA long stops (below the market) are returned. When the value of
BarsInFMA is less than BarsInSMA short stops (above the market) are returned.
The StandardDeviations variable can be set to 0 for the warning line, 1.1 for Dev1, 2.2 for Dev2, and 3.6
for Dev3. Other values of StandardDeviations may also be used for wider and narrower stops as deemed
appropriate by the user.
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Variable
NumBars
Default
30
StandardDeviations
BarsInFMA
10
BarsInSMA
id
21
1
6.4.2 KRevAmounts_value
The reversal value used for Kase DevStops is simply the number of standard deviations of the
average true range over NumBars. This value is then added to lows for short stops or subtracted
from highs for long stops. This value can be used to calculate stops in either direction at any time
(like a training stop).
Variable
NumBars
StandardDeviations
id
Default
30
0
1
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CHAPTER 7 - Troubleshooting
7.1 General Problems
For problems not directly related to using Kases indicators, please check your TradeStation
users manual or call TradeStation technical support.
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