Auto-Calc Bar Offset? |
If checked, the indicator will automatically determine the best offset to use for the cycle analysis plots. If not checked then you must input your own offset into the Manual Bar Offset setting. Default value is unchecked.
As discussed in the Overview section, the purpose of the Offset is to give you an out-of-sample period in which to validate the reported cycle activity....basically to ensure that the reported cycles are still in play. While you certainly can use an offset of 0, you will have no out-of-sample period in which to compare the cycles to what actually transpired in the price action.
Typically the Auto-Calc Bar Offset? option should be set to unchecked when using the Plot Forecast option or the Plot Spectrum option and set to checked when using Plot Cycles, Plot Primary Cycle Only, and Plot Composite.
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Pivot Size |
This is the pivot size (bars before and bars after) to use in the Auto-Calc logic above to find a recent pivot to use as the Bar Offset. Typically a value between 10 and 30 should work the best. We want to identify the nearest intermediate/major swing but, by the same token, we don't want an out-of-sample period that is too large. Default value is 20 and the range is from 2 to 50 bars.
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Manual Bar Offset |
Only used if Auto-Calc Bar Offset above is unchecked. Input the number bars to offset the analysis. Note that if you use a Manual Bar Offset, the offset will shift accordingly as new bars come in (i.e., to maintain the selected bar offset). To maintain the position of the offset as new bars come in, be sure to check the Fixed Offset option (below). Range is from 0 to 300 bars. Default value is 15.
Again, as mentioned in the Auto-Calc Bar Offset section, you will typically want to use a Manual Bar Offset when using Plot Forecast or Plot Spectrum, and use the Auto-Calc Bar Offset when using any of the other plots.
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----Fixed Offset |
If Manual Bar Offset is being used, this option will keep the offset at whatever bar was selected as new bars come in. So if 10 was initially selected as the Manual Offset, the offset would be 11 when the next bar comes in, and 12 when the bar after that comes in, etc. Default value is false.
Typically you will not use this unless you are using the Plot Cycles or Plot Composite options. For those plots, once you find a bar offset that generates strong out-of-sample correlation, you would then 'fix' the bar offset so that it does not change and you would use the cycle projection going forward as new bars come in.
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Select Plot |
From this dropdown you can select the type of plot you wish to produce. You can select from Plot Forecast, Plot Cycles, Plot Primary Cycle Only, Plot Composite, and Plot Spectrum. Plot Forecast is the default.
For a discussion of the various plots available, please see the Overview topic.
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Window Size |
Select the window size (i.e., the size of the data segment, in bars) that will be used for the analysis. You can choose from 128, 256, 512, and 1024. The default value is 256.
Using different settings for Window Size may be advisable when moving between Plot Forecast and the other plot options, and you may need to experiment.
See the Window Size topic for more information.
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Poles |
Select the number of poles, which represent the order for the MEM autoregressive calculation. Range is from 0 to 1000. If 0 is selected the value for Poles will be automatically calculated at 40% of the Window Size. If you input a non-zero value for Poles it should be in the range of 1 to Window Size - 1. The default value is 0.
See the Poles topic for a more in-depth discussion.
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Price Source |
Select the price source (i.e., open, high, low, close, hl2, hlc3, ohlc4, [other indicators]) to use for the analysis. The default is hl2.
Note that, for the Plot Forecast option, you will get better results if you forecast off of a moving average rather than the raw price data. To do this simply load a moving average into the chart and then select that average as the price source for the mesaForecaster indicator.
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Windowing Function |
In this dropdown you can select the windowing function to be applied to the input data prior to using any of the cycle analysis plots. A windowing function mitigates spectral leakage by tapering the edges of a finite-length signal segment to reduce discontinuities.
You can select from rectangular, hanning, hamming, blackman, blackmanHarris, and parzen. The default is hanning. To use no windowing function, select the rectangular option.
Note that when using Plot Forecast, the Windowing Function option is ignored.
Please see the Windowing Functions topic for more information.
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Amplitude Filter |
The amplitude filter allows you to filter out weaker cycles in the cycle analysis plots. The normalized amplitude of the cycles will range from 0 to 1.0 and you can select any amplitude in that range and any cycles with a lower relative amplitude will be ignored.
For the larger window sizes (i.e., 256, 512, and 1024) this setting will likely not be important. But when using the smaller 128 window size it can help eliminate noise from the cycle analysis.
Range is from 0 to 1.0 and the default value is 0.1.
Note that when using Plot Forecast, the Amplitude Filter option is ignored.
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Upper Cycle Limit |
This option, along with the Lower Cycle Limit option, allows you to restrict your cycle analysis to a range of cycle periods. Typically with MEM you will want to keep your Upper Cycle Limit at a value that is at or below the selected Window Size. So if using the 256 window size you would want to keep your Upper Cycle Limit at or below 256. The range is from 2 to 500 and the default value is 128.
Note that when using Plot Forecast, the Upper Cycle Limit option is ignored.
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Lower Cycle Limit |
This option, along with the Upper Cycle Limit option, allows you to restrict your cycle analysis to a range of cycle periods. When using the smaller 128 window size, you may want to increase the Lower Cycle Limit to 10 or 15 to filter out some of the noise. The range is from 2 to 300 and the default value is 5.
Note that when using Plot Forecast, the Lower Cycle Limit option is ignored.
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DeTrend/Standardize Data? |
Check this option to remove the trend, variance, and mean from the input price data prior to the analysis phase. It is very important to normalize and remove any trend from the input data to prevent any inherent trending price action from skewing the analysis. Default value is checked.
See the Stationary vs Non-Stationary topic for more information.
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Forecast/Cycle Plot Extension |
This represents the number of bars by which the plotted cycles, or composite, or forecast should be extended into the future. Range is from 0 to 100 bars. Default value is 15.
Typically, for the Plot Forecast option (once you are comfortable with your settings) you would set the Forecast/Cycle Plot Extension to somewhere between 5 and 10 bars with a Manual Offset at 0. For all of the other plots you can use any plot extension value you like.
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Cycle #1/Composite Color |
Select the plot color to use for the primary cycle as well as the composite plot. Default value is blue.
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----Hide Cycle #1? |
Check this box to remove the primary cycle from the cycle display. Default value is unchecked.
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Cycle #2 Color |
Select the plot color to use for the secondary cycle. Default value is green.
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----Hide Cycle #2? |
Check this box to remove the secondary cycle from the cycle display. Default value is unchecked.
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Cycle #3 Color |
Select the plot color to use for the tertiary cycle. Default value is orange.
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----Hide Cycle #3? |
Check this box to remove the tertiary cycle from the cycle display. Default value is unchecked.
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Cycles Label Color |
Select the color to use for displaying the list of cycles, which appears just to the right of the Bar Offset. Default value is navy.
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Bar Offset Color |
Select the color to use when drawing the vertical line at the Bar Offset location. Default value is silver.
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Zero-Line Color |
Select the color to use when drawing the zero-line in the cycles indicator pane. Default value is black.
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Forecast Upper/Lower Confidence Band Color |
Select the color to use when drawing the confidence bands around the forecast. Default value is green.
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Forecast Metrics Bg Color |
Select the background color to use when displaying the forecast metrics dialog. Default value is yellow.
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Forecast Metrics Border Color |
Select the color to use for the border of the forecast metrics dialog. Default value is gray.
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Forecast Metrics Font Size
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Select the text size (tiny, small, normal, or large) to use for the forecast metrics dialog. Default is small.
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Label Text Size |
Select the text size (tiny, small, normal, or large) to use for the informational labels in the cycles indicator pane. Default is normal.
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Cycle List Text Size |
Select the text size (tiny, small, normal, or large) to use for the list of cycles in the cycles indicator pane. Default is normal.
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Histogram Thickness |
This only applies if the Plot Spectrum option is selected. Specify the plot thickness to use when displaying the power spectrum histogram. Default is 4. Range is from 1 to 10.
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Spectrum Histogram Color |
This only applies if the Plot Spectrum option is selected. Select the color to use for plotting the spectrum histogram. Default is blue.
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Spectrum Max Cycle Color |
This only applies if the Plot Spectrum option is selected. Select the color to use to highlight the cycle with the highest amplitude. Default is navy.
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Legend Period Color |
This only applies if the Plot Spectrum option is selected. Select the color to use for the period legend. Default is black.
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Legend Frequency Color |
This only applies if the Plot Spectrum option is selected. Select the color to use for the frequency legend. Default is green.
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Legend Amplitude Color |
This only applies if the Plot Spectrum option is selected. Select the color to use for the amplitude legend. Default is maroon.
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Frame Color |
This only applies if the Plot Spectrum option is selected. Select the color to use to draw the power spectrum frame. Default is gray.
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Do SineWave Test? |
Check this box if you want to run a test on the cycle analysis algorithm using a generated sine wave rather than the actual price data. If this is selected, the indicator will internally generate a sine wave using the periods you select below and will plot that sine wave in the indicator pane. And it will also overlay the results of the cycle analysis so you can verify that the correct amplitudes, phase, and phase increments have been extracted during the cycle analysis. You can also use the Plot Spectrum option to do this.
The SineWave test is a good way to test how the Windowing Functions impact the cycle analysis. Turn on the SineWave test and then select Plot Spectrum from the Select Plot dropdown. Then select different Windowing Functions and observe how they impact the spectrum (vs what you know to be the actual cycles used).
Note that you must specify a value for Test Cycle Period #1, but you can set either or both of the remaining cycle periods to 0 if you only want a sine wave plot based on one or two cycles.
Make sure that you do not select a period that is greater than the Upper Cycle Limit or it will be filtered out.
Default is unchecked.
See the Sine Wave Test topic.
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----Test Cycle Period #1 |
Select the primary cycle period to use for the SineWave test. Range is from 2 to 100. Default value is 60.
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----Test Cycle Period #2 |
Select the secondary cycle period to use for the SineWave test. Range is from 0 to 100. Default value is 25.
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----Test Cycle Period #3 |
Select the tertiary cycle period to use for the SineWave test. Range is from 0 to 100. Default is 10.
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