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can the following be MS coded -- I can't code -- is it worth coding ?
"The premise of this particular use is that price swings above and
below value represented by a moving average (exponential or not
but exponential would be better, more in the "present").
What we want to do is measure how far has the price distanced
from it's moving average.
I would select a 24EMA and since i am a daytrader and do not
care about the close of the periods i use the (High+Low+Close)/3
as the base for the calculation.
Now, i want to see how far has price gone above and below the 24
EMA of the H,L,C,3.
For that i will plot a MACD(1,24,1) of the high+low+close, all
divided by 3 also called the "typical price".
So this will actually tell me, for each period, how far the typical
price is from the 24EMA "value" line.
Ok, now, i need to look back, in order to be able to evaluate if
price is overbought or oversold. So let's look back 200 periods ago.
The highest high of our MACD(1,26,1) is the maximum power of bulls
over our 200 bar lookback period, the lowest low of our MACD(1,26,1)
is the maximum power of bears over our 200 bar lookback period.
Whenever MACD(1,26,1) comes close to the maximum value it is
overbought and whenever it comes close to it's minimum value,
it's oversold. "
Wallace
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