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Creating the Composite Index and RSI+Avgs studies on TOS
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Creating the Composite Index and RSI+Avgs studies on TOS

  #1 (permalink)
Trading Apprentice
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Creating the Composite Index and RSI+Avgs studies on TOS

Hello all,

I'm new to the ThinkOrSwim platform, and am very challenged when it comes to coding. I was wondering if anyone could help me plot the Constance Brown's Composite Index and RSI+Avgs as lower studies in ToS. I'll leave the steps in English and also the TradeStation formulas if anyone is familiar with them:

In English the steps you need to plot the Composite Index are the following:

Step 1: create a 9-period momentum indicator of a 14 period RSI. Yes, it is momentum on RSI, not price. This is an indicator on an indicator.
Step 2: create a very short 3-period RSI and then a simple 3-period moving average of the 3-period RSI to smooth it slightly.
Step 3: add Steps 1 and 2 together to create the Composite Index.
Step 4: Create two simple moving averages of the Composite Index using the periods 13 and 33.
Step 5: Plot the Composite Index and its two simple averages as three lines in a separate frame under the price data.


How to plot Connie Brown's Composite Index in TradeStation:

Create two functions.
The function RSIMO9 is written:

RSIMO9 = MOMENTUM(RSI(Close,14),9)

The second function is written:

RSI3 = AVERAGE(RSI(CLOSE,3)3)

The formula is then written:

Plot1(RSIMO(+RSI3,"Plot1"):
Plot2(average((plot1),13),"Plot2");
Plot3(average((plot1),33),"Plot3');

In English, I need to plot a 9 period EMA and a 45 Period SMA onto a 14-period RSI as three lines in a separate frame under the price data on the ToS platform.

How to plot a 9 period EMA and a 45 Period SMA onto a 14-period RSI as three lines in a separate frame under the price data in TradeStation:

[LegacyColorValue = True];
Input: LENGTH(14), PERIOD(9),PERIOD2(45);
Plot1(RSI(Close,LENGTH),"Plot1");
Plot2(Average((RSI(Close,LENGTH)),PERIOD),"Plot2");
Plot3(XAverage((RSI(Close,LENGTH)),PERIOD2),"Plot3");

I would really appreciate anyone's help with this. If you have any questions or need to know something else just let me know.

Stephen


Last edited by StephenAndersen; March 18th, 2013 at 01:51 PM. Reason: Clarity
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Composite Index

The Composite Index is a fun indicator.

First of all its name is misleading. The name Composite Index is widely spread and used for stock indices all over the world.

NYSE Composite Index:

NYA Quote - New York Stock Exchange Composite Index - Bloomberg

Nasdaq Composite Index:

CCMP Quote - NASDAQ Composite Index - Bloomberg

Shanghai Composite Index:

SHCOMP Quote - Shanghai Stock Exchange Composite Index - Bloomberg


Secondly it is the only indicator of which I know that it has been registered with US Patent Office.

Type of Work: Text
Registration Number / Date: TX0003375191 / 1992-07-22
Title: Relative strength index : advanced / by Andrew E. Cardwell, Jr.
Description: 1 v.
Copyright Claimant: Cardwell Financial Group (employer for hire)
Date of Creation: 1990
Date of Publication: 1990-04-27

Variant title: Relative strength index : advanced
Names: Cardwell, Andrew E., Jr.
Cardwell Financial Group
(copied from the home page of the United States Patent Office)


The fact that it was protected under US copyright law did not stop Constance Brown from publishing the formula in her book.

The copyright owner distributes the indicator as CFGMomentumOscillator. As far as I know, it is identical with the Composite Index.

As you have shown, the formula is pretty simple and it can be coded right away. You can also try to use the Trader's Dynamic Index, which is similar. Below is a comparison of the CFG Momentum Indicator (alias Composite Index) with Trader's Dynamic Index. I am not coding for ThinkOrSwim, this is what is currently available for NinjaTrader.

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Last edited by Fat Tails; March 18th, 2013 at 04:33 PM.
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Considering that there is a Library of Congress Copyright on the Composite Index formula in her name, there was no blackout...it's a derivative of a derivative of the RSI, it's NOT the RSI. I would still really appreciate if someone could help me code the Composite Index and RSI+Avgs into ToS.

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StephenAndersen View Post
Considering that there is a Library of Congress Copyright on the Composite Index formula in her name, there was no blackout...it's a derivative of a derivative of the RSI, it's NOT the RSI. I would still really appreciate if someone could help me code the Composite Index and RSI+Avgs into ToS.

@StephenAndersen: Interesting point, you are right. Here is the record:

Type of Work: Computer File
Registration Number / Date: TX0005244690 / 1999-05-19
Application Title: Computer index computer program code.
Title: Computer program code for the composite index / Constance M. Brown.
Description: 341 p. + computer program.
Notes: Printout also deposited.
Deposit includes Technical analysis for the trading professional.
Copyright Claimant: Constance M. Brown, 1953-
Date of Creation: 1996
Date of Publication: 1999-03-13
Basis of Claim: New Matter: computer program code for indicator on book cover.

Other Title: Technical analysis for the trading professional.
Names: Brown, Constance M., 1953-


This means that she got a copyright for exactly the same formula in 1999, which was already protected under US copyright in 1992?

The formula is public, it should be an easy endeavour to code it for ToS.

Nota: I respect Constance Brown as a trading professional, I own two of her books (Technical Analysis for the Trading Professional & Fibonacci Analysis). I also respect Andrew Cardwell to whom I have talked a few times via Skype. The indicator, whether you call it CFGMomentumOscillator or Composite Index is a useful tool for trading, if used properly. I was just making a bit of fun of the copyright protection, this does not invalidate the trading approach. If somebody needs some help to code the indicator, do not hesitate to contact me via private message.


Last edited by Fat Tails; March 18th, 2013 at 04:43 PM.
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@StephenAndersen, a port of that study to ToS already exists .. maybe a search of other ToS sources on the web you'll easily find it.. the author is a futures.io (formerly BMT) member, so it's his choice if he likes to share it here.
hope that helps..
K

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