Re: MACD Indicators

["Tom Sprunger" <tlsprunger@xxxxxxxx>]

Gene, the TEMA and DEMA are different methods for smoothing 
the MACD.  From the Metastock Help files.
 
DEMA
"DEMA is an acronym that stands for Double 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.  It is a 
unique composite of a single exponential moving average and a double exponential 
moving average that provides less lag than either of the two components 
individually. "
 
TEMA
"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. 
"
 
Both were invented by Patrick Mulloy and are attempts to solve 
the below per his quote.
"Moving averages have a detrimental lag time that increases as 
the moving average length increases. The solution is a modified version of 
exponential smoothing with less lag time."
 
Tom

<BLOCKQUOTE dir=ltr 
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
  ----- Original Message ----- 
  <DIV 
  style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From: 
  Gene Ricci 
  To: <A title=metastock@xxxxxxxxxxxxx 
  href="mailto:metastock@xxxxxxxxxxxxx";>metastock@xxxxxxxxxxxxx 
  Sent: Saturday, May 19, 2001 7:12 
PM
  Subject: MACD Indicators
  
  Does anyone know the definiton of MACD (TEMA 
  smoothed) and MACD (DEMA smoothed)?
   
  Thanks,
  Gene