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Strategies & Market Trends : StockCharts.com -- Ignore unavailable to you. Want to Upgrade?

To: bob wallace who wrote (452)	7/30/2002 3:12:18 PM
From: Cush	Read Replies (1) \| Respond to of 836

Bob, one of the support people at StockCharts just emailed me this explanation: I agree that this problem is something that all users need to understand. If you stop and think about it, what you are seeing is natural and to be expected. That panel is plotting the movements of an indicator that goes from roughly -80 to +30. That's a range of 110 vertical points. On the two days in question, the MACD Histogram moved from -3.4904 to -3.3915, a difference of 0.0989. In order to see that move with 100% accuracy, you'd need to draw things on a scale that had at least one dot every 1/10th of a unit. Thus, you'd need a scale with 1100 vertical dots. Anything less than that and the program will have to do some rounding when it plots those values. On your screen, the smallest drawing unit available is the pixel. In the case of a "Huge" chart, the panel we are drawing that indicator in is roughly 100 pixels tall. What Bob and you are seeing is the consequences of the rounding that has to occur in order to fit everything into that panel. In most cases, the two bars appear to be identical (because they almost are). In Bob's second chart, the rounding algorithm just happened to cause the pixel boundaries to fall between the two values. Don't think that's right? Well what if the values were even closer together? etc. etc. etc. Bottom Line: For indicators that are based on non-integer numbers, charts are always an approximation of the reality. The more pixels you use, the better the approximation. Never base buy/sell decisions on one pixel - instead zoom in as much as possible. In this case, plotting the MACD Histogram by itself with a 1 month time scale on a "Portrait" chart is about as good as it gets: stockcharts.com[p,a]dacaynay[da][p][iUah12,26,9] ************************** Sounds like a good explanation to me. Bob, I've found the support at StockCharts to be quite helpful. I use the form at stockcharts.com Cush