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Thanks for the Bollinger info wich I will add to the top of the earlier-send-to-the-List
"BOLLINGER BANDS EXPLAINED by the MetaList-members"-email.
Nicely and accurate explained how you use and implement them for "your actions"
on the markets.
I have asked Mr Mark Vakkur, M.D. to send an example of "your question"-graph.
(for Lists' use).
Mail I have send on, so as others can benefit and also some discussioning was held
about them lately.
Personally, I seldom make use of Histograms, and the MACD will always be
available when required(tucked it away in one of my "Default.tmp"-Charts).
I too prever the BBs in combination with the RSI+StochOsc+DMI-system and CMO+
ROC-Close(KST) or Momentum + a variaty of them side by side (both daily/weekly).
Thanks again for your "additional" editorial,
Regards,
Ton Maas
Ms-IRB@xxxxxxxxx
-----Oorspronkelijk bericht-----
Van: John Sellers <ay286@xxxxxxxx>
Aan: 'metastock@xxxxxxxxxxxxx' <metastock@xxxxxxxxxxxxx>
Datum: woensdag 24 juni 1998 19:40
Onderwerp: RE: Histograms - "MACDHis1-MV" + "MACDHis2-AE" - the making of + its confusion explained
If possible could you include an attachment in your e-mail showing an example of a graph which you feel shows a good
representation of this indicator providing a good signal for a move on the upside.
Your mail was written well and easy to comprehend, thanks.
I use bollinger bands about the last price of the stock with two and half deviations plus an indicator "Money flow" with
similar bollinger bands wrapped about that indicator. I look for cross overs for possible buys. Also touching or
penetrations of the lower bollinger band of the indicator which show a divergence with the price movement indicate a
good entry. For instance a second bottom of the indicator not as low as the previous one but coupled with two price lows
where the latest one is the lower one would present an attractive entry point. Both ideas appear to function well when
the market is in an up move but not in a corrective mode.
John Sellers
Torrance, CA
USA
-----Original Message-----
From: A.J. Maas [SMTP:anthmaas@xxxxxx]
Sent: Tuesday, June 23, 1998 5:23 PM
To: Metastock List
Subject: Histograms - "MACDHis1-MV" + "MACDHis2-AE" - the making of + its confusion explained
Below is a copy of the original web-page!
D:\Equis\Z-Divers\faq-MetaStock\TASC\errata.htm
Regards,
Ton Maas
Ms-IRB@xxxxxxxxx
----------------------------------- From TASC mag - its Errata page ---------------------------------------------
APRIL 1997
The following correction was sent in by Mark Vakkur, author of the April 1997 article "The moving average
convergence/divergence histogram."
While producing the April issue, we noticed too late the discrepancies in Figures 1 and 4 between the author's original
hard-copy charts and the files he created for the article, because the two indicators (the MACD and the MACD histogram)
are so similar. We apologize for any inconvenience caused by the error. -- Editor
Mark Vakkur writes:
Contrary to how it was named in the article, the indicator I presented in my April 1997 article, "The moving average
convergence/divergence histogram," was actually a variant of the MACD indicator itself, not of the MACD histogram, which
is an indicator described by Alexander Elder in Trading for a Living.
In my article, I used SuperCharts to create a user function, MACDHis, defined as follows:
MACDHis = MACD(close, shortma, longma)/
MaxList(close,1)*100
In plain language, this is simply the difference between two moving averages (that is, the MACD indicator) of lengths
shortma and longma, divided by the close (I used the MaxList function to ensure against divide-by-zero errors). I
multiplied this result by 100 to create a more readable number, then plotted the result as a histogram.
However, to clarify matters, this is not the MACD histogram as described by Elder in Trading for a Living, which would
be defined as the MACD minus its signal line, plotted as a histogram. The SuperCharts formula for that indicator would
be:
MACDHis2 = MACD(close, shortma, longma)-xaverage
(MACD(close, shortma, longma), thirdma)
where thirdma is the length of the signal line (for example, 6 in a 12/26/6 bar system). This could then be divided by
the close and multiplied by a large constant to normalize the result. At any rate, as discussed in the article, the
value of the indicator is unimportant; what matters is its trend.
The rest of the article, including the systems presented and their results, is essentially correct once you substitute
"MACD indicator" for "MACD histogram" throughout. Figures 1 and 4 shown here have also been modified to reflect this
correction.
The system I used is as follows:
Long entry:
Buy stop high[1] if
MACDHis(SHORTMA,LONGMA)MACDHis(SHORTMA,
LONGMA)[1]
Long exit:
Sell stop low[0] if
MACDHis(SHORTMA,LONGMA)<MACDHis(SHORTMA,
LONGMA)[1]
For testing purposes, I disabled any short selling and used no stops.
I apologize for this error and hope it did not cause too much frustration for readers. I appreciate the feedback from
readers and from the editorial staff of STOCKS & COMMODITIES, which led to my discovery of the error (mainly through
their failure to replicate my trading system results). Moreover, the comments I received from readers demonstrate that
readers are taking to heart the magazine's frequent advice to accept nothing at face value but to test everything before
risking a dime. Thanks for the feedback.
Mark Vakkur, M.D.
vakkur.mark@xxxxxxxxxxxxxxxxxx
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