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About the Hartle Prospect Oscillator
The Hartle Prospect Oscillator (HPO) is a sensitive
measurement of the momentum of the market. The HPO identifies with
reasonable precision the low or high bar of each short-term price swing.
The precise formula is proprietary. Used in context with other technical
indicators or price patterns, the HPO gives you a trader’s edge. While my hypothetical
backtest was performed on the e-mini Nasdaq 100 futures contract, traders should be able to
incorporate the HPO into their own approach.
I use the HPO with a 10-period Bollinger Bands and a 28-day exponential
moving average for the trend.
If the trend is up, look for the market to move back below the moving average, and for the
HPO to flip to the positive side going into the close for the entry signal. The HPO is not
the Holy Grail, just a tool.
If the trend is down look for the market to move back above the moving average,
and for the HPO to flip to a negative reading going into the close for the entry signal.
The oscillator should not be used as a stand-alone indicator, but should be used in conjunction with other techniques or indicators.
I created a set of rules and performed a hypothetical backtest using the daily bars for the e-mini
Nasdaq 100 futures contract. I chose that market because of the leverage, the nearly 24-hour ability to manage the trade,
and the easy comparison to the QQQs. The rules enter into position at the close, a stop loss is always in place, and if the trade
is profitable, it is exited at the close. $100 was subtracted from every trade for slippage and commissions.
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results achieved by any particular program.
One of the limitations of hypothetical performance results is that
they are generally prepared with the benefit of hindsight. In addition,
hypothetical trading does not involve financial risk, and no hypothetical
trading record can completely account for the impact of financial risk in
actual trading. For example, the ability to withstand losses or to adhere
to a particular trading program in spite of trading losses are material
points which can adversely affect actual trading results. There are numerous
other factors related to the markets in general or to the implementation of
any specific trading program which cannot be fully accounted for in the
preparation of hypothetical performance results and all of which can adversely
affect actual trading results.
The following graphs are the annual performance for a $20,000 account, trading one contract.
The backtest covers August 1999 to December 2002.
 For information regarding
for downloading the trial version of the HPO, please select your technical
analysis software on the left hand column.
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