QP does things a little differently, it seems, with two lines and a histogram. One line is the shorter-term EMA (13) minus the longer-term EMA (34). Another line is the 89-day trigger line. The histogram, QP says, is "the difference between the 2 lines."
In Window on Wall Street, I plot a histogram and a trigger line. (This is the way Achelis describes MACD in "TA from A-Z," too). The histogram is the is the shorter-term EMA (13) minus the longer-term EMA (34):
mov(c,13,e) - mov(c,34,e)
Then I plot the trigger line, which is the 89-day moving average of the 13-day EMA minus the 34-day EMA:
mov((mov(c,13,e) - mov(c,34,e)),89,e)
The signal line is plotted on top of the MACD to show buying and selling points. The histogram itself is useful in the WOW plot for showing when a stock is overbought or oversold, too. It's easier to see sharp moves up and down with a histogram.
Are there any comments on the way QP chooses to plot MACD, with two lines and a histogram? I suppose it's a useful way to show where the MACD and the trigger line meet (at 0 in the histogram), giving a clearer picture of signals.
Brooke |
