Moving Averages-simple or exponential

Neil,
I think that you are correct when you are not holding overnight. War might start soon and there will be a big time stop running on both sides. what is the price of your data/software setup and can you trade futures through it ? I am using Nextrend but right now I am sampling Prophet and DTN IQ.


Walter

 

article by Mike Moody PHD in march issue of Stocks and Commodities magazine...
1. the stock must trade above the 150 day ema and the 50 day ema and 50 day ema must be above the 150 day ema(150 day ema line must be sloping up, 50 day ema slope doesn't matter) 2. stock must making higher highs and higher lows
3. Find a retracement against the trend by using a crossover of the 5 day ema and the 15 day ema
4. Wait for retracement to end using a crossover of the 5 day ema and the 10 day ema
5. Enter the trade where indicated and place stop loss at the most recent retracement low...do opposite for shorts...

 

Moving Averages-simple or exponential

Exponential may be a technological improvement. This is a matter of technology catching up with us. For example in the early days of oscillator development Designers were trying to keep things simple enough to do by hand. Even with the advent of HP calculators and the Apple II, there was just not a lot of excess computing power.

So, when we consult the archives we see 2-line oscillators like Stochastics using Simple MA in their calculations. Now because of refinements brought about by the advances in technology and the feed back from 40 years of the world’s top traders. George Lane recommends plotting Stochastics as a 3-line oscillator using exponential MA’s in the calculation.

Many may not consider a seasonal chart an indicator. But when you live with them day after day for a few years, they talk to you like a bar chart talks to John Hill. A seasonal chart gives you an idea where prices should be going. When they are on, or off course. A seasonal chart lets you visually see into the future. Used in conjunction with Stochastics, a seasonal chart indicates when the market forces are about to explode, and for about how long.

With Spreads you can use seasonal charts to find, Elliot Waves, Trendlines, Parabolic curves, box-break-outs the works to confirm and pyramid the trend.
-ooO-(GoldTrader)-Ooo-

 

Just pick one and stick with the discipline.

 

Anybody knows how a smoothed moving average is derived? The line is different from an SMA or an EMA. It's available in Ensign but cant find it in any other software.

pretzel

 

eSignal 7.3 does not have the smoothed MA choice - is there an equivalent?

pretzel

 

Pretzel,

This is based on Tim Tillson's article in TSAC. Note the volume multiplier, 'vol_mult', is a percentage of 1; I use .8 and .7. 'Pers' refers to the number of days in your moving average and 'c' is the close. Finally, 'e' in all the notations refers to an exponential moving average. If you can write formulas in your software then you can translate this.

In last month's "Smoothing techniques for more accurate signals," Tim Tillson described two indicators derived from the concept of digital filter analysis. The
generalized DEMA (GD) and its iterated version (T3) can easily be implemented in Window On WallStreet Day Trader and Window On WallStreet Professional
Investor, 32-bit version.

In Window on WallStreet, begin with any open chart on your screen. Click the System Test button on the toolbar, click New and enter the following formula:

Generalized DEMA (or GD)
Name: Generalized DEMA
Description: Tim Tillson's GD from Technical Analysis of Stocks & Commodities, January 1998.
Variables:
Name: vol_mult
Prompt Text: Enter weighting factor between 0 and 1
Default Value: 0.7
Name: pers
Prompt Text: Enter number of periods for moving average
Default Value: 7
Formula(s):
(1+vol_mult)*mov(c,pers,e) - vol_mult*mov( mov(c,pers,e),pers,e)


T3 (or Iterated GD)

Name: T3
Description: Tim Tillson's T3 from Technical Analysis of Stocks & Commodities, January 1998.

Variables:
Name: vol_mult
Prompt Text: Enter weighting factor between 0 and 1
Default Value: 0.7
Name: pers
Prompt Text: Enter number of periods for moving average
Default Value: 7
Formula(2):
(1+vol_mult)*mov((1+vol_mult)*mov((1+vol_mult)*mov(c,pers,e) - vol_mult*mov(mov(c,pers,e),pers,e),pers,e) - vol_mult*mov(
mov((1+vol_mult)*mov(c,pers,e)-vol_mult*mov(mov(c,pers,e),pers,e),pers,e),pers,e),pers,e) - vol_mult*mov(mov((1+vol_mult)*mov((1+vol_mult)*mov(c,pers,e) -
vol_mult*mov(mov(c,pers,e),pers,e),pers,e) - vol_mult*mov(
mov((1+vol_mult)*mov(c,pers,e)-vol_mult*mov(mov(c,pers,e),pers,e),pers,e),pers,e),pers,e),pers,e)

Bruce

 

Bruce,

This is great. I dont think I can find the answer anywhere else. I never thought that volume was included in the calculation. I'll try to do a WL version.

Thanks,

pretzel

 

For info

I use a variety of SMA crossovers (5/20, 5/25, 5/35, 7/35 primarily) on a group of about ten stocks. I have gone back on each stock two years, and usually one of the above SMA sets works very well. At times, I will use RSI as "supplemental information."

Be advised, the stocks in my group are all "very trendy" and react well to SMA method, not every stock in the universe will do this.

I monitor and trade this same group of stocks, all year long. All high volume, high liquidity stocks, allowing me to go long and short as the trend deems necessary. I am usually only short if the overall market is in bearish status (old Stan Weinstein lessons from the past).

some of them-

BBY - 7/35 SMA with RSI-30 day as secondary information
AMR- 5/25 alone works pretty damn good
AZO- 7/35 with RSI-35 works well
JPM- 5/30 with RSI-20
NVDA- 7/35 with RSI-20

I use www.stockcharts.com as my primary chart source.

After reading various books about trend following, learning of Donchians 5/20 crossover, of Seykota teaching 10/20 cross at a local college ("How to Trade your Way to Financial Freedom", page 10), etc, and trying to make sense of OTHER stuff like candlesticks, Zig Zag, etc, the SMA cross works best for my IQ and educational level.

Schwager, Weinstein, Murphy, some fav. authors

take care guys

BILL

 

Pretzel,

Just so no one is confused, especially me; volume in this calculation refers to "how hot" the moving average is in relation to the price series. It has nothing to do with number of shares or contracts traded. To clarify: the higher the volume multiplier the more overshoot and undershoot you will experience with the indicator -- the reason why I included the parameters I used for that variable -- .8 and .7. Good luck.

Bruce