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The majority of the stuff below is from MS online help.
The MACD is the difference between a 26-day and 12-day exponential moving
average. A 9-day exponential moving average, called the "signal" (or
"trigger") line is plotted on top of the MACD to show buy/sell
opportunities.
TEMA is an acronym that stands for Triple Exponential Moving Average.
However, the name of this smoothing technique is a bit misleading in that it
is not simply a moving average of a moving average of a moving average. It
is a unique composite of a single exponential moving average, a double
exponential moving average, and a triple exponential moving average that
provides less lag than either of the three components individually.
Most analysts (including Equis International's) say that the MACD indicator
is "the difference between 12-day and 26-day exponential moving averages."
However, the indicator is really the difference between 0.15 and 0.075
exponential moving averages (whereas, when expressed in decimal form, the
12- and 26-day exponential moving averages are actually 0.153846 and
0.076923 exponential moving averages). See Moving Average Calculation
Methods for more information on exponential moving average calculation
methods.
EXAMPLE The formula "macd()" returns the value of the MACD indicator (i.e.,
the solid line). The formula "mov(macd(),9,E)" returns the value of the
MACD's signal line (i.e., the dotted line).
Due to these minor differences in the exponential values, the following
formula is slightly different than the predefined MACD indicator. Remember
that you can plot the true MACD indicator using the macd() function (see
MACD).
mov( close, 12, E) - mov( close, 26, E)
The MACD's trigger (which is a 9-day exponential moving average of the MACD
indicator) can be calculated as shown below:
mov( macd(), 9, E)
mov( close, 12, E) - mov( close, 26, E) is
Tema(C,shortperiods)-Tema(C,longperiods);
mov( macd(), 9, E) is Mov(Tema(C,shortperiods) -
Tema(C,longperiods),signal,E)
-Corey
----- Original Message -----
From: "Greg Haworth" <GregHaworth@xxxxxxxxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxxxxxxx>
Sent: Monday, April 16, 2001 12:18 PM
Subject: Indicator formula structure
> Newbie Question
>
> I just started playing around with MS, so please excuse what will seem
like
> a "stupid" question.
>
> I don't quite grasp the structure of the formulas. I can't seem to find
it
> in the manuals, is there some kind soul out here that can direct me in
the
> right direction? I am specifically stumped trying to create a specific
> period MACD. I tried modifying the canned DEMA MACD formula.
>
> Here is where the structure eludes me. I understand short, long, and
> signal periods (i think! short MA, Long MA, and averaging period) but why
> are there three terms in the brackets instead of just one??
>
> I would take any guidance that can be offered -- i am really just a little
> overwhelmed.
>
> regards/greg
>
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