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This
Indicator was conceptualised by Norm North in 1995, and is a consensus style
oscillator indicator.
(Consensus indicators use many indicators to output a value)
A
nice piece of code from Norm North of North Systems which uses
a summation of 10 different components, ranging from commodity channel index,
relative strength index (RSI) and money flow index to moving average
convergence/divergence, Bollinger bands, among others.
The Insync Index ranges from -65 to +65 and signals when the extreme
point is reached and then retreats back from it.
From that point on, you're on your
own.
Important note from Precision Trading Systems
Insync index contains two volume based indicators, Ease of Movement and Money
Flow index.
These indicators each contribute scores of + 5 to - 5 to the consensus
reading, and if you do not have trade volume enabled they will not assign the
correct values, this effectively renders Insync useless.
So
to make matters simpler I have added the input REALVOLUME = TRUE / FALSE to
this indicator.
While this has the effect of reducing the range of Insync index to +55 and
-55, ( if FALSE is selected ) it at least means that the two volume
components are removed from the calculation and enable the remaining 8
indicators to work correctly. If this is not done, Insync will never reach
the extreme points required to signal a trade.
Also
you need to be aware, some version of Tradestation have a version of Money
Flow Index which is not correctly coded.
I
have the correct code here that can be used to replace the erroneous
function. If you plot MoneyFlowIndex in your Tradestation, and note how it
looks, if the line is jerky and stepped, it the incorrect code version which
does not follow the right formula as it was designed. If you need the correct
code then please mail me.
How to use Insync
-
Insync is best employed as a watch-dog over a large workspace of instruments,
with alerts given when the extreme levels are reached.
-
It
is not an "Always in the market" indicator and hence needs to be protected
with trailing stops. (Do not wait for the other extreme before exit trades)
-
WARNING This indicator works well in sideways ranging markets, but is
NOT SUITABLE FOR TRENDING MARKETS
-
North intended buy signals when Insync reached -65 then rose away from it.
Sell signals when reaching +65 and falling from it
-
This
indicator works well if the signals are confirmed with Candlestick patterns
-
This
indicator often works well on markets which are not profitable when testing
trend following systems
-
My
studies show that trading when Insync is not at the full extreme points of
+-65 reduce trading profits significantly.
-
However you will see many great moves coming from 55 or 60 values, which will
drive you insane....you have been warned
-
Some
of the shortcomings of Insync have been addressed in the
PI-Osc I coded up recently
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