Quantifying Very Short Term Indicators and Technical Analysis Methods. Include in this presentation is Dandy Rotation, an alternative approach of Relative Rotation Graph (RRG)

1. Microscopic
Technical Analysis
Re-Concept Technical Analysis
www.theprimarytrader.com
The Primary Trader

3. The Primary Trader
Microscopic Technical Analysis
MACD
Previous
Data Line
4 Signals Direction
Relative
Performing
Dandy
Rotation

4. Microscopic Technical
Analysis : MACD
Re-Concept Technical Analysis
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The Primary Trader

5. The Primary Trader
Microscopic Technical Analysis
MACD
Previous
Data Line
4 Signals Direction
Relative
Performing
Dandy
Rotation

6. In Memoriam: Gerald Appel
(1933 – 2020)
Inventor of MACD
Moving Average
Convergence Divergence (MACD)

7. MACD is my inspiration to create
Microscopic Technical Analysis Concept

8. The Primary Trader
About MACD
 Developed by Gerald Appel in late 70s
 According to Stockcharts.com :
 MACD turn two Trend Following Indicators, Moving Averages, into
Momentum Oscillator
 As a result, MACD offers the best of both worlds : Trend Following
and Momentum
 Pronounce : “Mac-Dee” or “M-A-C-D”

9. The Primary Trader
TLKM : EMA 12-Days dan EMA 26-Days
Blue : EMA 12
Red : EMA 26
Sell Signals :
EMA12 Cross Down EMA26
Buy Signals :
EMA12 Cross Up EMA26

10. The Primary Trader
MACD Line : EMA 12-Days Subtract EMA 26-Days
If EMA12 > EMA26 then EMA12 – EMA26 > 0 then MACD Line > 0
If EMA12 < EMA26 then EMA12 – EMA26 < 0 then MACD Line < 0
Zero Crossover (Sell) :
MACD Line Cross Down
Zero Line
Zero Crossover (Buy) :
MACD Line Cross Up
Zero Line
MACD Line

11. The Primary Trader
Signal Line : 9-Days Moving Average of MACD Line
MACD Line : Straight Line
Signal Line : Dashed Line
Signal Line Crossover (Sell) :
MADC Line Cross Down
Signal Line
Signal Line Crossover (Buy) :
MACD Line Cross Up
Signal Line
MACD Line
Signal Line

12. The Primary Trader
TLKM With MACD Line & Signal Line

13. The Primary Trader
TLKM With MACD Line & Signal Line (Zoom In)

14. The Primary Trader
Histogram : MACD Line Subtract Signal Line
If MACD Line > Signal Line then Histogram > 0
If MACD Line < Signal Line then Histogram < 0

15. The Primary Trader
TLKM With Complete MACD

16. The Primary Trader
ASII : SMA20 and SMA60

17. The Primary Trader
Add : 5-Days Signal Line

18. The Primary Trader
Add : Histogram In Separate Chart

19. Microscopic Technical Analysis :
Previous Line and Direction
Re-Concept Technical Analysis
www.theprimarytrader.com
The Primary Trader

20. The Primary Trader
Microscopic Technical Analysis
MACD
Previous
Data Line
4 Signals Direction
Relative
Performing
Dandy
Rotation

21. Rise and Fall Concept

22. Everything Is Relative, Bro

23. The Primary Trader
Rise vs Fall

24. The Primary Trader
 Rise and Fall only compares Today’s Close with Today’s Open (Green vs Red in Solid
Candlestick chart)
JSMR in Solid (Filled) Candlestick

25. The Primary Trader
 In Hollow Candlestick, there are 4 Movements: Rally, Rise, Fall and Slump
JSMR in Hollow Candlestick
Rally : Today’s Close > Today’s Open AND Today’s Close > Yesterday’s Close
Rise : Today’s Close > Today’s Open BUT Today’s Close < Yesterday’s Close
Fall : Today’s Close < Today’s Open BUT Today’s Close > Yesterday’s Close
Slump : Today’s Close < Today’s Open AND Today’s Close < Yesterday’s Close

26. The Primary Trader
GGRM In Hollow Candlestick
Rally
Slump
Fall
Rise
RiseRally
SlumpFall

27. Previous Data Line, Signal Line and
Histogram

28. The Primary Trader
Flash Back What We Have Understood
 “Identify Trend Reversal at Relatively Early Stage”
 Technical Analysis definition by Martin J. Pring in Technical Analysis
Explained book
 “A Trend Is Assumed To Be In Effect Until It Gives Definite
Signal It Has Reversed”
 Dow Theory
 Breakout Resistance or Breakdown Support as a
confirmation for Trend Reversal or Trend Continuation
 Crossover in Indicators as Buy or Sell Signals

29. We Need A Standard – As Early As
Possible – Starting Point
I’ll watch the
finger that will
trigger the gun

30. Previous Data Line as Start Signal or
Beginning

31. The Primary Trader
BBCA With Full Ichimoku Kinko Hyo

32. The Primary Trader
BBCA With Only Chikou Span
Chikou Span :
Shift the Black Line
26-Days Behind
BBCA
Line Chart

33. The Primary Trader
Chikou Span and Previous Data Line
 I don’t put Chikou Span in my Ichimoku Kinko Hyo because I
can see it
 Simple line with Significant Meaning
 Without formula!
 Chikou Span is shifted 26-period behind
 Previous Data Line is shifted 1-period behind

34. Why 1-Period Behind?
It’s A Starting Point

35. The Primary Trader
PGAS With SMA-20 Days

36. The Primary Trader
PGAS With SMA-20 Days and Previous SMA-20

37. The Primary Trader
PGAS With SMA-20 Days and Previous SMA-20 (MACD Style)

38. The Primary Trader
How I Use MA Direction

39. Microscopic Technical
Analysis : 4 Signals
Re-Concept Technical Analysis
www.theprimarytrader.com
The Primary Trader

40. The Primary Trader
Microscopic Technical Analysis
MACD
Previous
Data Line
4 Signals Direction
Relative
Performing
Dandy
Rotation

41. Stochastic Oscillator is My Most Reliable
Indicator

42. The Primary Trader
Stochastic Oscillator
 Created by George Lane (1921 – 2004)
 “doesn't follow price, it doesn't follow volume or anything
like that. It follows the speed or the momentum of price. As a
rule, the momentum changes direction before price.”

43. The Primary Trader
Formula of Stochastic Oscillator (Standard Formula)


14 Period
(days)
Lowest in n-Days
(Floor) %k ~ 0% (Oversold)
%k ~ 100% (Overbought)

44. The Primary Trader
My Setups of Stochastic Oscillator
%k = 5-days (Period)
%d = 2-days (Period)

45. The Primary Trader
ASII With Stochastic Oscillator and Histogram

46. The Primary Trader

47. Failure Swing
A
B

48. The Primary Trader
ASII With Stochastic Oscillator and Histogram

49. The Primary Trader
 Failure Swings : When
Histogram fails to continue
its current direction
 A Failure Swing could
potentially indicate A
Moment Before Histogram
moves from Positive (or
Negative) area to Negative
(or Positive) area
Failure Swings In Stochastic Oscillator Histogram
Positive Failure Swings
Negative Failure Swings

50. The Primary Trader
Crossover and Failure Swing
Golden
Crossover =
Buy
Death
Crossover =
Sell
Positive Failure
Swing = Alert
Buy
Negative
Failure Swing
= Warning Sell

51. The Primary Trader
Golden Crossover = Buy Death Crossover = Sell
Negative Failure Swing = Warning SellPositive Failure Swing = Alert Buy
Crossover and Failure Swings

52. The Primary Trader
Pay Attention
 Crossover is a confirmation, Failure Swing is not
 I use very short parameter (5 and 2 Periods) between %k
and %d so most Failure Swing is most likely to have
Crossover (simply because the difference between 5-period
%k and 2-period %d is close enough)
 Need additional method to increase Accuracy

53. Microscopic Technical
Analysis : Relative Performing
Re-Concept Technical Analysis
www.theprimarytrader.com
The Primary Trader

54. The Primary Trader
Microscopic Technical Analysis
MACD
Previous
Data Line
4 Signals Direction
Relative
Performing
Dandy
Rotation

55. Hal yang paling ditakuti oleh Investor /
Trader Profesional ?

56. The Primary Trader
Actual
Market
Goal
Goal
Market
Actual
Actual vs Market Performance

57. The Primary Trader
Outperform
 Actual Performance is better than
Market Performance
1. Actual Gain is higher than Market
Gain
2. Actual Loss is smaller than Market
Loss
3. Record a Gain while Market record a
Loss
Underperform
 Actual Performance is worse than
Market Performance
1. Actual Gain is lower than Market
Gain
2. Actual Loss is bigger than Market
Loss
3. Record a Loss while Market record a
Gain
Relative Performance

58. The Primary Trader
GGRM : -17.7% IHSG : -24.3%
 GGRM is Outperform JCI because record
a smaller loss than JCI
Ratio Chart GGRM – IHSG :
Actual Loss is Smaller Than Market Loss

59. The Primary Trader
AKRA : 6.25% IHSG : -24.3%
 AKRA is Outperform JCI because record
gain while JCI suffer loss
Ratio Chart AKRA – IHSG :
Record a Gain While Market Suffer a Loss

60. The Primary Trader
EXCL : -8.7% IHSG : 41.9%
 EXCL is Underperform JCI because suffer
a loss while JCI record gain
Ratio Chart EXCL – IHSG :
Suffer a Loss While Market Record a Gain

61. The Primary Trader
Ratio Chart ABCD – Benchmark Combine Classic Method
Breakout
Uptrend
Ratio Chart ASII – JCI :
JCI Price
ASII Price

62. The Primary Trader
ASII : 5.5% IHSG : 19%
IHSG : 65%ASII : 119%
Impact for ASII and JCI

63. So We Can “Technical Analyze” Ratio
Chart ?

64. The Primary Trader
Ratio Chart JSMR – IHSG + MA 60-days : Golden Cross

65. The Primary Trader
IHSG : 8.1%

66. The Primary Trader
JSMR : 36%

67. The Primary Trader
Ratio Chart JSMR – IHSG + MA 60-days : Death Cross

68. The Primary Trader
IHSG : -2%

69. The Primary Trader
JSMR : -30%

70. Relative Performing +
Microscopic Technical Analysis +
Bollinger Band (Complete Set) +
Data Visualization =
Dandy Rotation

71. Microscopic Technical
Analysis : Dandy Rotation
Re-Concept Technical Analysis
www.theprimarytrader.com
The Primary Trader

72. The Primary Trader
Microscopic Technical Analysis
MACD
Previous
Data Line
4 Signals Direction
Relative
Performing
Dandy
Rotation

73. The Primary Trader
Dandy Rotation
Bollinger
Band
Microscopic
Technical
Analysis
RRG
Data
Science

74. Relative Rotation Graph (RRG)

75. The Primary Trader
RRG – Bloomberg version

76. The Primary Trader
RRG Basic

77. The Primary Trader
RRG Meaning In Every Quadrant

78. RRG mendeteksi pergerakan :
Naik / Turun, sekaligus
Relative Performance-nya (Outperform /
Underperfom).

79. RRG merupakan bentuk lain dari indicator :
JdK RS-Momentum dan
JdK RS-Ratio

80. The Complete Set of Bollinger Band

81. The Primary Trader
Bollinger Band
Moving Average
20-Days
+2 Standard Deviation
of MA20
-2 Standard Deviation
of MA20

82. The Primary Trader
Bollinger Band and %BB
%BB : Stochastic Oscillator of Price
and Upper – Lower Band
Overshoot
Undershoot

83. The Primary Trader
Bollinger Band and Bandwidth
Bandwidth : Upper Band – Lower Band
Squeeze
Bulge

84. The Primary Trader
Bollinger Band Complete Set (+ Microscopic Technical
Analysis)
Bollinger Band %BB
Bandwidth
Middle Band
Direction &
Bandwidth
Histogram
Bandwidth
Histogram
Middle Band
Direction

85. The Primary Trader
Bollinger Band – Complete Set Meet Microscopic Technical
Analysis

86. RRG Concept + Relative Performing + %BB

87. The Primary Trader
Relative Performance of JSMR (vs IHSG)

88. The Primary Trader
Ratio Chart of JSMR – IHSG with %BB and Middle Band
%BB > Previous %BB = %BB Is Rising
%BB < Previous %BB = %BB Is Falling
RC > Middle Band = RC Is Rising
RC < Middle Band = RC Is Falling

89. The Primary Trader
RRG Concept Adoption In Dandy Rotation
RRG
 JdK RS-Momentum (RSM) and JdK RS-Ratio (RSR)
 Quadrant :
 Leading : RSM > 100, RSR > 100
 Weakening : RSM < 100, RSR > 100
 Lagging : RSR < 100, RSM < 100
 Improving : RSM < 100, RSM > 100
Dandy Rotation
 Ratio Chart of ABCD-IHSG and %BB of Ratio Chart ABCD – IHSG
 Quadrant :
 Outperform : RC > MA RC, %BB > Prev. %BB
 BoW : RC > MA RC, %BB < Prev. %BB
 Underperform : RC < MA RC, %BB < Prev. %BB
 Fast (Trade) : RC < MA RC, %BB > Prev. %BB
Indexing

90. The Primary Trader
Basic Concept of Dandy Rotation
 Ratio Chart of ABCD-IHSG and MA 20-days of Ratio Chart of ABCD-IHSG
 RC.JKSE and MA.RC
 %BB of Ratio Chart ABCD – IHSG and Previous Line
 RC.BB and PrevRC.BB
 Quadrant :
 Outperform : RC.JKSE > MA.RC, RC.BB > PrevRC.BB
 BoW : RC.JKSE > MA.RC, RC.BB < PrevRC.BB
 Underperform : RC.JKSE < MA.RC, RC.BB < PrevRC.BB
 Fast (Trade) : RC.JKSE < MA.RC, RC.BB > PrevRC.BB
Ticker RC.JKSE MA.RC RC.BB PrevRC.BB X Scale Y Scale Quandrant
ERAA 297.63 277.33 86.02 68.08 0.07 17.94 Outperform
WOOD 73.91 78.86 3.09 -5.97 (0.06) 9.06 Fast
RALS 105.87 111.81 -11.55 21.17 (0.05) (32.72) Underperform
KAEF 421.48 337.16 68.86 74.34 0.25 (5.48) BoW
X Scale -> KairiRC = (RC.JKSE / MA.RC)-1
Y Scale -> RCBB = RC.BB – PrevRC.BB

91. The Primary Trader
Excel Version of Dandy Rotation
(40.00)
(30.00)
(20.00)
(10.00)
-
10.00
20.00
30.00
(0.10) (0.05) - 0.05 0.10 0.15 0.20 0.25 0.30
Ticker X Scale Y Scale
ERAA 0.07 17.94
WOOD (0.06) 9.06
RALS (0.05) (32.72)
KAEF 0.25 (5.48)
Buy On Weakness
Quadrant
Outperform Quadrant
Underperform
Quadrant
Fast Quadrant
RALS
KAEF
WOOD
ERAA

92. Data Visualization

93. The Primary Trader
Steps in Data Visualization with R
1. Input “Relation” and “Sector” in Excel before Convert to R
Data Frame
2. New Column (mutate) :
 RCBB = RC.BB – PrevRC.BB
 KairiRC = (RC.JKSE / MA.RC)-1
3. Use ggplot2 package and set :
 X-axis = KairiRC
 Y-axis = RCBB
4. Set Face to “Relation”

94. The Primary Trader
Basic Graph of Dandy Rotation

95. Data Visualization Means More Features

96. The Primary Trader
Dandy Rotation (Current Version)