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AmiBroker TA Course

Indicators

Almost everything written about technical indicators skips the only question that matters: what is this number, arithmetically, and what could it possibly know?

An indicator is a function. It takes bars that have already happened and returns one number per bar. That is the whole of it. It has no access to order books, earnings, positioning or the next bar. Whatever it tells you was already present in the price and volume history — the indicator has rearranged that history into a shape your eye finds easier to read.

That single fact explains most of the trouble people get into with indicators. If a number is a transformation of the last fourteen closes, then it cannot lead the last fourteen closes. If it is bounded between 0 and 100, then it must saturate when a move persists, and saturation is not a warning. If its period is 14 rather than 12 because a book said so, then the level you are treating as significant is a convention, not a property of the market.

What this part does differently

Section titled “What this part does differently”

Every lesson here follows the same discipline, in the same order:

  1. What it measures. The arithmetic, stated plainly, with the parts AmiBroker documents separated from the parts it does not.
  2. How it is commonly read. The interpretation you will meet everywhere, presented as what people say rather than as what is true.
  3. How it is misused. The specific errors, and what the symptom looks like on a chart.
  4. What it cannot do. The limits that come from the construction itself.
  5. How to display it in AmiBroker. Panes, scaling, levels, parameters.
  6. How to write it in AFL. The exact documented function, its exact documented defaults.
  7. How to test a claim about it. Turning “RSI above 70 means sell” into something with a universe, a period, a measurement and an outcome you might not like.

The defaults matter more than you would expect. AmiBroker’s Bollinger Band functions default to a 15-period average, not the 20 that almost every book and website assumes. ATR() has no documented default period at all. Signal() takes three arguments, so Signal(9) does not give you a nine-period signal line — it silently rebuilds the MACD with a nine-period fast average. There is no TrueRange() function in AFL, however many code snippets on the internet call one. Each of these is checked against the official AFL Function Reference in the lesson that needs it, and cited.

What you need before you start

Section titled “What you need before you start”

You need a working AmiBroker installation with an end-of-day database containing at least a few years of daily bars for a handful of liquid instruments. Nothing in this part requires a real-time feed, a data subscription or the Professional edition. Everything runs on free end-of-day history.

You do not need to be able to program yet. The AFL in this part is deliberately small — mostly one or two lines at a time — because Part 8 is where the language is taught properly. Where a complete formula genuinely helps, it is supplied as a file you can download and paste into the Formula Editor, with its assumptions written at the top.

What changes by the end

Section titled “What changes by the end”

You will stop asking “what is this indicator telling me” and start asking “what did this indicator do to the price, and what would I expect it to do in a market like this one”. You will know why a momentum oscillator pins near its ceiling in a strong advance, and why that is arithmetic rather than a signal. And in the final lesson you will take the single most repeated claim in technical analysis, specify it well enough to be wrong, test it on your own data, and read the result honestly — including the substantial list of things the test cannot settle.

Part6 of 36Level1 — Chart ReaderPages11Estimated time5.5 hours

0 / 11 lessons in this part completed