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# Calculating a price from ma crossovers

Discussion in 'Technical Analysis' started by gms, May 22, 2003.

1. ### gms

What would be a way to calculate what today's price would have to be to make the 10-day and 15-day simple moving averages cross today?

Anyone?

3. ### amgGuest

I started to provide an answer, but there were some difficulties.

Let's break it down:

(1) You are looking for a x-over of 10d-15d.

(2) You need either the 10d or the 15d to move enough to make that cross over.

(3) Most x-overs take a position on the short MA crossing the long MA

(4) Therefore, the Q is what price TODAY would make the 10d ma = 15d ma TODAY

Mind you, this must pre-suppose that the 15d MA is moving in the direction you want to trade.

OK, having said all that, here's the calculation:
(1) 10d MA = 10d=(d1+d2+d3+d4+d5+d6+d7+d8+d9+d10)/10, where d1 through d10 are prices from 10 days ago, starting yesterday

(2) 10d MA = a (known)

(3) 15d MA = b (known)

(4) 10d MA(x-over) = b (ie, = 15ma) = (d2+d3+d4+d5+d6+d7+d8+d9+d10+d11)/10, where d11 is TODAY'S DESIRED PRICE.

To get todays desired price (d11), notice we dropped d1 and added in the yet unknown d11. You know the last 9 days prices.

You need to solve for d11 (The PRICE TODAY to make 10d=15d):

d11 = [(15d MA) times 10 ] / (d2+d3+d4+d5+d6+d7+d8+d9+d10)

Sorry if it sounds simpleton (or too complex, lol)... amg

4. ### jack hershey

write out both ma's.

equate them.

the last entry on each MA is todays close.

you know all other values. Enter them.

solve for today's close.

Use a recurrence formula for MAs and equates them that should be simple or use excel solver and it will find you the value in 1 second .

6. ### gms

Thank you all for your help. Peering into your collective guidance, I've deduced this as the formula:

Today's Price = (Today's SMA(15)*10 ) -
(Day9+Day8+Day7+Day6+Day5+Day4+Day3+Day2+Day1)

Very good work. Thank you again.

7. ### TSOKAKIS

The analytic math expression is rather complicated. Do you really need it ?? Is there any application ??
10min before the end, you may know and buy [sell] at close...

8. ### gms

Very usually, I ask questions because the answer is complicated. Were it not, I'd soon figure out the answer. So, I think I may need it. I think there may be an application for it. But I won't know for certain until I do it.
Yes, I've already considered that the price print may be better for that near EOD in any event, but I could always backtest and see.

(BTW, I do see a mistake in my calculation in my previous post).

9. ### TSOKAKIS

There are some mistakes indeed.
But, it is not the case.
I may write an exact formula, if neccessary.
as for the backtesting, just ask [for the past] the cross(MA(C,15),MA(C,10)) condition. All values are already known for the past, and I hope we agree !!

10. ### amgGuest

Yes... minor:

You wrote:

Today's Price = (Today's SMA(15)*10 ) -
(Day9+Day8+Day7+Day6+Day5+Day4+Day3+Day2+Day1)

Should be:

Today's Price = (Today's SMA(15)*10 ) Ã·( Day10+Day9+Day8+Day7+Day6+Day5+Day4+Day3+Day2)

Where Day 10 is yesterday.

Good luck! Ana Maria

#10     May 24, 2003
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