KASE INDICATOR + SOURCES

Hello and welcome to my blog.

This is not a recommendation to buy or sell any of the stocks discussed on this blog. Due diligence is your responsibility. If you need professional investment advice then find a professional.

The following links are for the KASE Dev-Stop indicator. From these I ended up using the first one in a modified manner. The modifications made were in the time frame used, the SD multiplier and a switch from a Stop indicator to an Entry indicator. There is also only one line displayed instead of the six originally used.

http://forum.equis.com/forums/thread/1309.aspx
http://www.mta.org/eweb/docs/Issues/41%20-%201993%20Summer.pdf
http://trader.online.pl/MSZ/e-w-Kase_DevStop.html

Here is the MetaStock code from the first link:

Per1:=Input("max length",10,100,30);
RWH:=(H-Ref(L,-Per1))/(ATR(Per1)*Sqrt(Per1));
RWL:=(Ref(H,-Per1)-L)/(ATR(Per1)*Sqrt(Per1));
Pk:=Mov((RWH-RWL),3,W);
AVTR:=Mov(HHV(H,2) - LLV(L,2),20, S);
SD:=Stdev(HHV(H,2) - LLV(L,2),20);
Val6:=If(Pk>0,HHV(H-AVTR-(4*SD),20),LLV(L+AVTR+(4*SD),20));
Val5:=If(Pk>0,HHV(H-AVTR-(3*SD),20),LLV(L+AVTR+(3*SD),20));
Val4:=If(Pk>0,HHV(H-AVTR-(2*SD),20),LLV(L+AVTR+(2*SD),20));
Val3:=If(Pk>0,HHV(H-AVTR-SD,20),LLV(L+AVTR+SD,20));
Val2:=If(Pk>0,HHV(H-AVTR,20),LLV(L+AVTR,20));
Val1:=If(Pk>0,HHV(H-AVTR+SD,20),LLV(L+AVTR-SD,20));
Val6;Val5;Val4;Val3;Val2;Val1;

Here is the modified code:

RWH:=(H-Ref(L,-18))/(ATR(18)*Sqrt(18));
RWL:=(Ref(H,-18)-L)/(ATR(18)*Sqrt(18));
Pk:=Mov((RWH-RWL),3,W);
AVTR:=Mov(HHV(H,2) - LLV(L,2),18, E);
SD:=Stdev(HHV(H,2) - LLV(L,2),18);

Val6:=If(Pk>0,HHV(H-AVTR-(4*SD),18),LLV(L+AVTR+(4*SD),18));
Val5:=If(Pk>0,HHV(H-AVTR-(3*SD),18),LLV(L+AVTR+(3*SD),18));
Val4:=If(Pk>0,HHV(H-AVTR-(2*SD),18),LLV(L+AVTR+(2*SD),18));
Val3:=If(Pk>0,HHV(H-AVTR-SD,18),LLV(L+AVTR+SD,18));
Val2:=If(Pk>0,HHV(H-AVTR,18),LLV(L+AVTR,18));

{Val1:=If(Pk>0,HHV(H-AVTR+SD,18),LLV(L+AVTR-SD,18));}
Val1:= LLV(L+AVTR-.3*SD,18);
{Val6; Val5; Val4; Val3; Val2;}
Val1;

The following chart displays both the original and modified KASE. The ribbon at the bottom of the chart shows the buy and sell signals generated by crossing the modified KASE.

As a further modification I took the average of the modified KASE and an 18 day moving average. This creates a smoother line and is the thick yellow line on the next chart.

The other addition is the DARVAS BOX lines, (bottom, middle and top) displayed in the lower panel. I like these and use them as a sort of adapting support and resistance indicator. I may get into more detail in a later post.

For what it is worth, there it is. There has been no rigorous back-testing and all the other checks to verify the validity of using this indicator. For myself, I simply like the way it looks.

Credit goes to Cynthia Kase, Darvas and the people who wrote the codes that I used. I could not have done the modifications without their original work. Thank you.

Thank you for your time.