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When Curtis Dahl wrote his book around 1950, computers were simply not
available. Main frames didn't appear until the late 50's early 60's. Dahl
worked very hard to develop easy to use methods that could be applied using
pencil, paper, bookkeepers paper (now called spreadsheets), graph paper, and
perhaps a mechanical calculator.
The displaced moving averages method is about as good as many other
oscillators. You can get similar results using an macd, or a price
oscillator with a moving average, or other oscillators. All price-only
based oscillators are highly correlated, see the New Technical Trader by
Chande and Kroll. there is no mystical or trading virtue to using or not
displaced moving averages.
Lionel
-----Original Message-----
From: Neal Hughes <neal@xxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, August 17, 1998 11:05 PM
Subject: Re: Shifted Mov. Avgs.
>At 09:50 PM 8/16/98 -0700, Hans T. Hingst wrote:
>>Would you please explain the purpose of shifting a moving average? What
is
>>the advantage or benefit? Thank you.
>>
>>Hans
>
>Hans,
>
>One benefit of displacing a moving average is to reduce whipsaw,
>without the disadvantages introduced by slowing the speed
>of the moving average.
>
>Compare a daily chart with a 7-day moving average (simple, not
exponential),
>to the same chart with the same 7-day moving average displaced 5 days
>to the right. You will see reduced whipsaw. Another way to reduce
>whipsaw is to have a longer (slower) moving average. So now compare
>the above 2 moving averages to a slower one (say 21 day or 40 day).
>You will see that the displaced moving average reduces whipsaw
>WITHOUT delaying the trend change signal as much as a slow moving average
>delays the signal of trend change. (That is, if you define trend
>change as a crossing of the moving average by price).
>
>These displaced moving averages form the basis of trend definition
>in my trading.
>
>Best wishes,
>-Neal.
>
>---
>DiNapoli Fibonacci techniques -
>http://www.fibtrader.com
>
>
>
>
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