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Thank You,
It does seem sort of silly to me that I can not assign a "global variabe" in
an indicator and pass it through to a signal. If you can plot it then it
does have a value to test against.
Joe
-----Original Message-----
From: editorial@xxxxxxxxxxxxx [mailto:editorial@xxxxxxxxxxxxx]
Sent: Friday, October 08, 1999 5:52 AM
To: Anshien, Joe
Cc: Omega List
Subject: Re: Unidentified subject!
Aha! You've discovered the problem with "displaced"
averages.
In general, a displaced average is moved back in time.
The most common use of this is the "centered" MA, in
which the MA is moved back half its length.
By definition then, such an MA has no value on the
current bar and cannot (by itself) be used to trigger
a signal on the current bar.
Is there any way around this? Those who recommend
displaced MA's often recommend "projecting the MA
forward" to the current bar by "extending it along
its current path". Unfortunately, there is no way
to program such an ill-defined extension. In fact,
you'll find many references to "extending lines by
eye" or "using a pencil to extend the line..." (No
kidding... the methods are totally subjective and
impossible to objectively backtest.)
What you'll find, I think, is that, almost regardless
of the mathematical complexity of the method you
might choose to extend a displaced MA forward to the
present, the extension will be wrong when the price
turns. And, the "bigger" the turn, the more wrong the
forecast will be. (This holds true for even a variety
of non-linear forecasting methods.)
---- you wrote:
> Please tell me how to create an exit signal when a close below a displaced
> moving average.
>
> Thank You
> Joe.anshien@xxxxxxxxx
>
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