Indicators: Kase DevStops

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Kase DevStops:

Originally developed bu Cynthia Kase (in her book "Trading With the Odds"). This version is calculating the DevStops exactly as described in the book.


Engineering a Better Stop: The Kase DevStops

What all of this boils down to is that we need to take variance and skew into consideration when we are establishing a system for setting stops. Three steps that we can take in order to both better define and to minimize the threshold of uncertainty in setting stops are:

  1. Consideration of the variance or the standard deviation of range.
  2. Consideration of the skew, or more simply, the amount at which range can spike in the opposite direction of the trend.
  3. Reformation of our data to be more consistent (this step is examined in detail in Chapter 81, while minimizing the degree of uncertainty as much as possible).

Author: Mladen Rakic

 
This is kinda NICE :) Thank you Mladen .. I have learned a lot from watching you code over the years. I am going to start coding again after some 10 years abscence from mql. I want to try and create a modified heiken ashi candlestick that incorporates more gaussian data that has been subjected to a log(10), Logh  or perhaps a coordinate transformation (like maybe laplacian complex representation of the series) or  Hilbert transform or ..... in order to better represent the real time data in a more normalised and predictable manner. This will mean that old candles will be changed every time the skew and kurtosis alter but that doesnt matter too much as the important candle is the current one :) Could end up trading in the complex plane with imaginary price data .... LOL isnt that waht we already do ? Mladen have you come across any log hyperbolic or gaussian modified heiken ashi candles before ? Kind Regards Adam V
 

Further to my previous thoughts Mladen..

Once the data time series is in the complex plane then a phase plane plot on the Smith chart may be a way to recognise certain market behaviours as the evolve as a subtle influence on the real market price .. I am not sure yet where this could be applied and how the phase plane data can be used .. I am an electronics engineer and am trying to apply some RF and signal processing tools to the job of better normalising the market data in real time. I guess that certain periodic cycles would be more evident and also a phase plane plot would reveal a lot about system stability and other interesting cyclic phenomena. It would be awesome to have semi-gaussian/normalised heikken ashi candle sticks that took into account real time fluctuations in skew and kurtosis ... Anyhooooo just some food for thought :)

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