MACD(13,34,89) can be plotted with these two formulas:
1. mov(c,13,e) - mov(c,34,e)
2. mov((mov(c,13,e) - mov(c,34,e)),89,e)
The second one is the trigger line.
A 0 trend line can be added:
trend(0,0)
In TASC's April issue, which was one of the freebies at TAINJ, I think, there's an interesting article (by Dr. Mark Vakkur) on a modification of MACD, which involves subtracting the MACD 9-week moving average (he's using weekly charts) from the MACD, and then dividing that by the close, to allow for comparisons between stocks.
It looks like this:
(mov((mov(c,12,e) - mov(c,21,e)),9,e))/c
For all you Alexander Elder fans, the author of the article says the idea was inspired by Elder's "Trading for a Living."
The MACD histogram, as Vakkur calls it, is used to help him consider entering and exiting long positions, to help him spot changing trends.
There's an interesting paragraph in the article, too, which speaks to all my profit testing:
"Worrying about the percentage profitability of trades is about as productive as counting the number of times a flyfisherman must cast his rod before catching a fish; if he returns home with a few large trout, then the frustration of a few empty casts matters little."
Happy fishin'. |
