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Worden Discussion Forum » Members » adriaanvw

Profile: adriaanvw
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User Name: adriaanvw
Groups: Gold User, Member, TeleChart
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Joined: Monday, April 10, 2006
Last Visit: Saturday, December 9, 2006 9:08:26 AM
Number of Posts: 3
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Last 10 Posts
Topic: TC's MACD formula
Posted: Friday, November 17, 2006 9:02:48 AM
Hi Bruce,

Thanks for the info. I've adjusted for what you pointed out, but still had differences. I then upgraded from TC2005 to TC2007, and now it all works! It would not have if you hadn't cleared up the non-mixing of MAs though.

Again, thanks for helping clear things up.
Adriaan
Topic: TC's MACD formula
Posted: Friday, November 17, 2006 5:54:00 AM
Hi,

I read a Worden report dated 5th Oct 06 that described the "Patient Trader" trading system. Wanting to backtest this system prior to trading it, I programmed it into Metastock. The trading system relies heavily on MACDs, but unfortunately I've so far been unable to replicate TC's MACD histogram accurately in Metastock. Referring to the Wikipedia link listed in the Worden Knowledge Base, the correct histograph formula for a Simple MACD(12,18,5) is as follows:

MACD = EMA12 - EMA18 on PRICE
SIGNAL = SMA5 on MACD
HISTOGRAM = MACD - SIGNAL

I've programmed this into Metastock as follows:

(Mov(CLOSE,12,E) - Mov(CLOSE,18,E)) {MACD} - (Mov((Mov(CLOSE,12,E) - Mov(CLOSE,18,E)),5,S)) {SIGNAL}

I've concluded that there must be a difference between the way in which TC calculates its MACD histogram and the way it was described on Wikipedia. Could you please shed some light as to how TC actually calculates its MACD histogram values, or perhaps point out something that I appear to have down incorrecly?

Much appreciated,
AvW
Topic: Average True Range (ATR)
Posted: Thursday, October 5, 2006 9:22:43 AM
QUOTE (Bruce_L)
Average True Range is not one of TeleChart's built in indicators, but it can be created as a Custom Indicator. Please try the following for a 20-Period ATR:

Select Chart Template | Add Indicator | Indicator.
- Visible: Checked
- Center Zero Line: Checked
- Plot using price scale: Unchecked
- Smoothing Average: 39 (twice the ATR-Period minus one)
- Average Type: Exponential
- Indicator Formula: (H - L + ABS(H - C1) + ABS(L - C1)) / 2

You can adjust the Average True Range Period by changing the Smoothing Average in the Custom Indicator. For example, to plot a 14-Period ATR, just change the Smoothing Average to 27 (which equals (14 * 2) -1).

You may wish to review the following:

Plotting Custom Indicators with Examples


Hi Bruce,

I have a question about the ATR indicator formula specified previously. If I'm reading it correctly, it adds three values together: (H - L), ABS(H - C1) and ABS(L - C1). Having done that, the result is then divided two. Is there any particular reason why one divides by two and not three?

Thanks,
Adriaan