Registered User
Joined: 9/20/2014
Posts: 6
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Hi,
I would like to know if there is a PCF formula that allows me to workout the steepness of the difference between moving averages e.g (21EMA - 34EMA). Basically I am trying to workout the first derivative of an indicator that tracks the difference between moving averages. I would like the output to be a number, e.g. 2, 1.5, 1, . Which would allow me to make comparison across different stocks.
Many Thanks in advance
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Worden Trainer
Joined: 10/7/2004
Posts: 65,138
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So just the change in 21EMA - 34EMA between the previous and the current bar?
(13 * C - 35 * XAVGC21.1 + 22 * XAVGC34.1) / 385
Or maybe the following as it easier to modify.
XAVGC21 - XAVGC34 - XAVGC21.1 + XAVGC34.1
The first one should be slightly more efficient.
-Bruce
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Registered User
Joined: 9/20/2014
Posts: 6
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Hi Bruce,
Thank you so much for the equation.
As for the first equation, if i where to apply it to (2EMA - 8EMA) between the previous and current bar.
Would it be (6 * C - 9* XAVGC2.1 +3*XAVGC8.1) / 385? If not could you provide the correct equation.
Once again thank you so much for your help
Kind Regards
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Worden Trainer
Joined: 10/7/2004
Posts: 65,138
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It would actually be:
(2 * C - 3 * XAVGC2.1 + XAVGC8.1) / 4.5
Not sure if that is better than the following or not.
(4 * C - 6 * XAVGC2.1 + 2 * XAVGC8.1) / 9
The difference equation for exponential moving averages can be expressed as follows.
XAVGCP = a * XAVGCP1 + (1 - a) * C
Where:
a = (P - 1) / (P + 1)
So what I'm doing is expressing this using the moving averges.
XAVGC2 - XAVGC8 - XAVGC2.1 + XAVGC8.1
And then replacing XAVGC2 with a version created from XAVGC2.1 and C and replacing XAVGC8 with a version created from XAVGC8.1 and C. This allows us to use two EMAs in the formula instead of four EMAs and three terms instead of four terms.
(XAVGC2.1 + 2 * C) / 3 - (7 * XAVGC8.1 + 2 * C) / 9 - XAVGC2.1 + XAVGC8.1
(9 * XAVGC2.1 + 18 * C - 21 * XAVGC8.1 - 6 * C - 27 * XAVGC2.1 + 27 * XAVGC8.1) / 27
(12 * C - 18 * XAVGC2.1 + 6 * XAVGC8.1) / 27
(4 * C - 6 * XAVGC2.1 + 2 * XAVGC8.1) / 9
(2 * C - 3 * XAVGC2.1 + XAVGC8.1) / 4.5
-Bruce
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Registered User
Joined: 9/20/2014
Posts: 6
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Bruce,
I am indebted to you. I will take time to go through your equation.
Many Thanks
Tino
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Worden Trainer
Joined: 10/7/2004
Posts: 65,138
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You're welcome.
-Bruce
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