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At 06:13 PM 3/6/98 EST, Peter 2150 wrote:
>In a message dated 98-03-06 18:10:06 EST, Wanabe@xxxxxxxxxxxxx writes:
>
>> My goal is to try and place an order with my broker before the market
>> closes. Not the next day. I am using the MACD indicator to determine
if I
>> am bearish or bullish. If I know at what price the indicator is going to
>> change position I could possibly determine near but before the close of
the
>> market if I want to change my position by asking myself, it looks like
>> today's close is going to be above or below the price which is going to
>> cause the MACD indicator to swap position. Does this help?
>
>
>Jeff
>
> I understand what you want and it really isn't that difficult.
>Just take the equation for the Macd and the equation for the MACDMA and set
>them equal and solve for the equation for CLose. Then code it.
>
> Pete
>
>=====================================================
Jeff,
Run,don't walk to the nearest exit!
Pete gives you the answer above. Simply solve the simultaneous
equations to determine the value of a prospective crossover. However
trying to use this as a stop can be very misleading. Many years ago
in the land of DOS and homebrew charting and analysis programs, I
tried a similar approach using the half hour DJI data from Barrons for
a database. My "Stopsetter" program would generate a crossover number
for the next half hour and if the price was beyond that point at the next half
hour reading you were assumed to be in and probably with positive
open trade equity at that point. Then rerun the math and look for a crossover
in the other direction. That pseudo system was a money maker in
fantasy land but niavely overlooked the real world. There was no way to
see whether a trade was executed and then reversed, whipsawing you,
possibly more than once within the half hour data points.
Given the assumption that you were in at the crossover points,
tha approach produced a simulated profit. In the real world of real time
trading it fails miserably giving the erroneous interpretation of whether
you are long or short as of the half hour data points and losses due to
whipsaws and transaction costs.
However as an exercise for the student it provided valuable
insight into pitfalls of simulated trading.
Don
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