The Composite Index:
The best way to think of the Composite Index as it applies to the is to think of the as Windows 3.0 and the Composite Index as Windows 10. Constance Brown discovered that the , while it does create and detect divergences, does is not as accurate as it could be. It’s a bit of an oxymoron to say this but the is a without any momentum calculation attached to it. The actually misses a significant amount of important moves and even generates some bad moves. What Constance Brown did with the is to input a momentum calculation within the itself.
1. Check hidden and regular divergences on RSI+COMPOSITE_INDEX and PRICE+COMPOSITE_INDEX.
2. After finding divergence wait for COMPOSITE_INDEX to cross under/over it's moving averages to trigger.
"RSI overbought/oversold as filter", "RSI and COMPOSITE_INDEX as trigger", "RSI 50 Over/Under as trend direction detection", ... can be add to this strategy.
Thanks a lot, Hope it helps
Thick red line = Composite Index
Thin red line = Faster moving average on composite index
Thin green line = Slower moving average on composite index
Please read description of the indicator above.