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Roy,
Thanks for your excellent advice. As a newbie, it's difficult for me
to know what to believe and what not to believe on the internet.
That's why I wish I could analyse any formula that I find - such as
the weekly MACD in my post.
I found the weekly MACD histogram formula at:
http://www.paritech.com/education/technical/custom/indicators/macd.asp
I have already posted your reply on their Metastock forum, so
hopefully they will remove their formula from their site, or at least
try to justify it.
There's a fiendishly complicated formula for weekly MACD at:
www.users.bigpond.com/prominex/MetaStock/Roy-63.txt
I suspect that the Paritech formula is trying to calculate MACD for
Friday's closing prices only. I verified this by plotting all the
individual bits and pieces as separate indicators, because I'm too
inexperienced to understand the formula. (If you know anyone who
understands the bit between the {start} and {end}, could you ask them
to explain it. It doesn't matter whether they agree with it or not.
At least I'll learn something.) I suppose it makes some sense: the
daily MACD formula is based on daily closing prices, so the weekly
MACD formula is based on Friday's closing prices. Presumably, if
there were a monthly MACD histogram, it would be based on monthly
closing prices.
I agree with your comment that the Paritech daily MACD is "slightly
off". I found this description of the daily MACD histogram in a book
by someone called Dr. Alexander Elder (why do all conmen and shysters
call themselves "Dr"):
Page 129:
1. Calculate the 12-day and 26-day exponential moving averages of
closing prices.
2. Subtract the 26-day EMA from the 12-day EMA to obtain the fast
MACD line.
3. Calculate a 9-day EMA of the fast MACD line to obtain the slow
Signal line. Plot both lines to obtain the classic MACD indicator.
4. Subtract the Signal line from the MACD line to obtain an MACD-
Histogram.
The "MetaStock canned version", as you call it, is bound to be
superior, because at least I've heard of Equis :-), but I've never
heard of Dr. Alexander Elder.
Thanks for your help.
Regards,
Alan
--- In equismetastock@xxxxxxxxxxxxxxx, "Roy Larsen" <rlarsen@xxxx>
wrote:
> Alan
>
>
>
> > I found the following formulas for daily and weekly MACD:
>
> Don't take everything you find on the net as being accurate or even
close to what they purport to
> be. The daily MACD below is OK although slightly off the MetaStock
canned version. The "weekly MACD"
> is not even close. Ask yourself how a weekly formula can show 5
different values during one week,
> none of which are anywhere near accurate.
>
> If this works for you then great, but a weekly MACD it is not.
>
> Roy
>
> > Daily:
> > ( Mov( {start}C{end},12,E ) - Mov( C,26,E ) ) - Mov( ( Mov(
C,12,E ) -
> > Mov( C,26,E ) ),9,E )
> >
> > Weekly:
> > Mov({start}If(DayOfWeek()=5,C,Peak(1,If(DayOfWeek()=5,C,0),1))
> > {end},60,E)-
> > Mov(If(DayOfWeek()=5,C,Peak(1,If(DayOfWeek()=5,C,0),1)),130,E)-
> > Mov(Mov(If(DayOfWeek()=5,C,Peak(1,If(DayOfWeek()=5,C,0),1)),60,E)-
> > Mov(If(DayOfWeek()=5,C,Peak(1,If(DayOfWeek()
=5,C,0),1)),130,E),45,E)
> >
> > As a newbie, I'd be grateful if someone could help me to
understand
> > the bit of the weekly formula between the {start} and {end}
> > comments.
> >
> > I know that this will correspond to the "C" between {start} and
{end}
> > in the daily formula.
> >
> > I understand what "Peak" does.
> >
> > I don't understand what "DayOfWeek" is doing.
> >
> > Regards,
> > Alan
> >
> >
> >
> >
> >
> >
> >
> > Yahoo! Groups Links
> >
> >
> >
> >
> >
> >
> >
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