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Create a Custom Indicator, the 3/10 OscillatorThe Real-Time Language (RTL) within MarketDelta allows anyone to harness the program’s internal compiler for building custom technical indicators. Access to RTL is available in the Professional versions of MarketDelta. MarketDelta offers a wide assortment of technical analysis tools to please chart enthusiasts, especially novel indicators such as the Volume Breakdown, Profile and TPO indicators, as well as numerous tools designed for statistical analysis. But sometimes you may want to take matters into your own hands. Using RTL, you can design your own indicators or mirror those you’ve seen elsewhere. The “3/10 Oscillator” is a simple technical analysis indicator made famous by trader and educator Linda Raschke (who appears in the popular book, New Market Wizards). As with most oscillators, the 3/10 is an effective way to gauge momentum and see price divergence. The 3/10 oscillator resembles other well-known oscillators, such as the MACD, RSI and Stochastic indicators. Its calculation is particularly basic. The main oscillator charts the difference between 3-period and 10-period simple moving averages, hence its name. To smooth the results, a signal line overlays the oscillator, comprised of a single 16-period moving average of the indicator itself. Despite its popularity, the 3/10 oscillator is not included in most charting platforms, which often leaves traders wondering how they can use it. However, it is easy to build one in MarketDelta. This process shows you the basics of using RTL. To begin, open any multi-pane chart in MarketDelta to which you wish to apply this new custom indicator. Then, click the Open RTL button on the main MarketDelta toolbar, and choose Open Custom Indicator from the pop-up menu. (Don’t see an RTL button? See this article.) A new pop-up menu will then appear:
From this new window, choose the first option, New Custom Indicator, then press OK. A new pop-up RTL window appears:
“Tokens” are the results of other program indicators or references that may be used in RTL. The list above shows all these different tokens you can add to your new Custom Indicator. Since the 3/10 oscillator is the difference of two moving averages, we will need to add 2 tokens, both of which are a moving average with a specific setting. Scroll down in this list to find “MA: Moving Average” and double-click this token. A pop-up window for the MA will appear:
Our first MA token will be for the 10-period moving average that is part of the 3/10 oscillator. So make sure it says “Simple” and a period of “10″ and press OK. The token appears to the right of the RTL window now:
Now add another MA token in the same way, but double-clicking the MA from the list on the left of the window, and this time choosing “3″ for the period. Once you click OK, the program will prompt you to rename this token, since you cannot have two tokens with the same name as “MA.” So, feel free to rename it as anything you wish, such as “MA_three.”
Next comes the actual RTL programming to create the token. The 3/10 oscillator is defined as the difference between a 3-period and 10-period moving average. These two moving averages already exist now as RTL tokens, each with a specific name as listed in the “Token” column on the right of the window. Thus, our RTL code will simply say: MA_three-MA Type this into the code box at the bottom of the RTL window. The code *is* case-sensitive:
If desired, press the “Check” button to see if the program understands your RTL code. In particularly complex custom RTL coding, this is useful. If all’s good, save your new indicator pressing the “Save” button, and give it a name. If you are making changes to an existing indicator and want to save them under a new indicator name, use the “Save As” button. At this point, you have two options. The indicator has now been created and saved. You can either exit this window and apply it to any chart, or you can have it automatically applied to the currently-selected chart in the program by pressing the “Send To” button and selecting “Chart – Custom Indicator.” If you choose to add a custom indicator later to any chart, press the “Insert” key for the shortcut window to add an indicator, and click “Custom Indicator.” This displays the option on the right of the screen to select the RTL indicator you recently created and saved:
Select the custom indicator you want, and press the “Add and Close” button. It will now appear on the chart:
Next, we need to add the 16-period moving average to the custom indicator for the smoothing signal that is a part of the 3/10 oscillator. Technically, this is called an “indicator of an indicator,” since we are adding one indicator to analyze the results of another indicator. In RTL, this is an entirely separate indicator. Open the RTL window again, using the steps from above to create a new custom indicator. Now, here’s a simple shortcut to create the signal line and add the tokens to the RTL window automatically. In the RTL code box at the bottom of this window, simply type: MA(CI) In this case the “CI” stands for “Custom Indicator.” Press “Save” and since you had not already pulled in the tokens, MarketDelta will prompt you for the settings for both the moving average as well as the custom indicator. You can set the MA to 16, and then just select your recently-named 3/10 indicator for the CI pop-up. Once this is done, the tokens will appear in the RTL window, and you can save the indicator as you did the last one. Note: though this indicator is associated with the 3/10, you must save it as a new indicator with a unique name. Perhaps “310_signal” or similar is appropriate.
Next, add this second custom indicator to the chart, either by using the “Send To” button as noted before, or by manually adding the indicator using the “Insert” button. It will appear at as an entirely separate pane in the chart:
Next, we want to move the signal line to the original 3/10 indicator pane we first added, so they are not on separate panes. To make sure the signal is clearly obvious after they both appear on the same pane, first change the color of the signal line by double-clicking it and adjusting the color settings. (You must double-click right on the line itself to get these settings, which is the same process as changing settings for any indicator.) After you change the color, click once on the signal line so it is clearly selected (the line will appear bold). Then drag this line up onto the original 3/10 pane. It will move and appear overlaid, so the full 3/10 oscillator with signal is apparent:
Congratulations! One simple step you can do to clean up a chart after you dragged indicators around is to auto-resize the panes. Right-click on the chart and choose “Size Panes” followed by “Instrument Panes 75%” or whichever option you prefer. While the math in this particular indicator is quite simple, it outlines the process of converting a concept into programming code and then into a visual representation of that code, using RTL. But it doesn’t stop there. You can harness many powerful built-in indicators, such as Session Statistics, to create entirely new ways of looking at the market, all using this same process. Customize the Main ToolbarThe Main Toolbar in MarketDelta is an important part of program operation. It allows you to see the “Hearbeat” icon, which signals if your data feed is sending data. You can also start your data service and download historical data all from this toolbar. You can easily customize what appears on this toolbar, as well as its size. To see the available options for customization, right-click the white Status bar in the toolbar, and you will see a menu:
The settings are: Anchored - locks the toolbar to the main program window so it doesn’t “Float.” If you are often “losing” the toolbar from dragging it around your monitors, this may be a convenient option. Button Titles – After you become familiar with what each button does, you may find you no longer need to view the text titles that appear under each button. Unchecking this option will make the toolbar smaller, providing more room for your charts, if desired. Condensed - This removes spacing between the buttons so they are closer together, thus shortening the size of the toolbar. Slim - If you are in need of maximizing the vertical real estate on your computer monitor, this setting forces the entire toolbar, including its Status bar, into one row. You can also change which buttons actually appear on the toolbar itself. This useful if you want to reduce clutter by removing buttons you do not use, or by adding buttons that you would use more often, for frequently-used features. For example, if you subscribe to a Professional version of the software, you may wish to add the RTL button to the toolbar so you can quickly access those features that set these versions apart. Simply click the “Preference” option after you right-click the Status bar. You will get this pop-up window:
Select the buttons you wish to appear or not appear, and then press the OK button, and your Main toolbar will change accordingly. Two Worthwhile Webinars & Recordings
Unusual Footprint DataClick any picture on this page to see a larger version. If you study a MarketDelta Footprint over a considerable length of time, you will eventually see anomalies that may, at first, appear to be errors in your price data, or even a problem with the chart itself. However, sometimes these oddities are in fact accurate information that reflect unusual activity in the market. Here is what a “normal” Footprint chart typically looks like. In this case, it is set to a periodicity of “5 tick Reversal.” The market for these examples is the E-Mini S&P 500 Futures contract.
(The “Reversal” periodicity is one of many novel ways to chart prices in MarketDelta. For more information about this kind of chart, see this article about periodicities in general, and this article about how to create one yourself.) You will see in this example that, as prices fluctuate, the chart reflects changing volume at the Bid and Ask prices. However, sometimes you will see Footprints that show Bid and Ask numbers considerably different than this “normal” information, and it is important to understand what they mean. Consider this chart:
This Footprint is from last week, just before and during the release of important pre-market reports on unemployment and payroll. The first sign that something relatively unusual was happening was the the long column of trades that showed volume at the Bid only, while the Ask volumes were all “0.” This occurred immediately following the release of the reports. Notice how in most “cells” of this Footprint column, the price ticked down through many levels due to only 20 to 50 contracts hitting the Bid. This column reflects two interesting aspects of the market at this moment. First, since little volume caused such movement in the prices, there was insignificant resting demand from buyers (in the form of Buy Limit orders) that would halt the selling activity. Second, the lack of any volume at the Ask during this move shows that there were no Market orders to Buy during this quick move, further showing an immediate sell-only response by the market. At price 1147.25, we see the first incidence of Ask volume, thus the first sign that some participants considered the down move over. Indeed, while not shown on this chart, prices did rise over the following minutes. The next unusual pattern on the chart occurs on the right half of the chart. Here we see rare gaps in the Footprint. At first, this might seem like data is missing, or the chart is not keeping up with the activity. In actuality, this pattern is an accurate portrait of high volatility. Normally, Bid and Ask prices are in a tight spread, only 0.25 points apart. Here, we see the Footprint showing the Bid and Ask activity more than one point apart. Thus, the Bid-Ask spread was much higher than normal due to the rapid and high volatility. And in this case, the spread was actually greater than the Reversal setting of the chart, thus creating an entirely new bar as the contract moved between trading on the Bid versus the Ask. Another unusual display on Footprint Reversal charts, which occurs more often, is the result of price gaps between sessions:
Here, we see another column of zeros. Unlike the prior example, this column of zeros contains no volume on either the Bid or the Ask. Since this is a Reversal chart, and not a time-based chart, MarketDelta creates a new column only when prices reverse by 5 ticks. In this chart, we have a Session 2 setting which excludes the overnight session activity. Thus, if prices gap up or down between two day sessions, we see a continuation of the Reversal bar on the chart, without regard for the time the activity occurred. This is in fact the entire goal of a Reversal chart, but you should be aware of this unusual pattern that is foreign to anyone who normally works with time-based charts. This example illustrates that MarketDelta prioritizes the periodicity of the chart over the Session of the chart. And this is useful for other non-time based periodicities, such as Volume-based charts, where a new bar will not form until a certain volume has occurred in the market, regardless of when this volume actually took place. This can be a powerful way to organize price information independent of time, and may help you to see the bigger picture of how the market is unfolding. |
