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Registered User
Joined: 5/8/2005
Posts: 3
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Where can i find a formula for 3 moving averages crossing (down and up..)
4,9, 18 MA and 7,14, 21 in the last day and last two days
thanks
claudia
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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Two moving averages is easy but it gets a bit more complicated when you add a third...
Does one have to cross either one or both? Does the 4 cross the 9 or the 8 and does the 8 cross the 4 or the 9? Do they happen on the same day or within a couple days of each other (etc, etc).
So lets take a step back and look at what it MEANS when averages cross.
In order for averages to cross each other they must be converging. If averages of price over different periods are converging it means the prices, on average, for the two or more periods are getting closer in value.
If prices over different periods are getting closer in value the stock must already be in (or entering) a consolidation.
In essense, you are really looking for stocks that are ending trends and starting consolidations. If this is not clear, check out these videos:
Understanding Moving Averages - Part I, The Basics
Understanding Moving Averages - Part II, Using Multiple Averages
The fear I have of creating a PCF for these three crossing over the many possible ways they can cross, is it may be too constrictive and may hide stocks that are darn close to meeting your condition (what if the 8 crosses the 9 today but the 4 crossed two days ago... you would want to see that too, right?).
Here is my solution which keeps things loose enought that the program does not hide stocks you might like from you while still narrowing the field.
Sort any WatchList you like by this PCF in descending order:
(ABS(AVGC4.10-AVGC18.10)+ ABS(AVGC18.10-AVGC9.10) + ABS(AVGC4.10-AVGC9.10)) /
(ABS(AVGC4-AVGC18)+ ABS(AVGC18-AVGC9) + ABS(AVGC4-AVGC9))
This will rank the WatchList by the proximity of the averages to each other 10 days ago as a percent of their proximity now. The larger the number, the more the averages are/have converged on each other.
Sort a good sized list like the Russell 3000 by this in descending order. Keep pressing your spacebar and look at the averages and how they are acting. I think you will like this solution.
I found some nice ones.
Here are videos on sorting and creating PCFs in case you need them.
How to create a Personal Criteria Forumula (PCF)
Create your own stock rankings using WatchLists and Sort conditions
- Craig
Here to Help!
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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oh... and you can replace the 4s with 7s, the 18s with 14s and the 9s with 21s to fit your second set of averages. The idea is still the same.
- Craig
Here to Help!
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Registered User
Joined: 5/8/2005
Posts: 3
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thanks craig, i have a typo error, what I meant was 4,9, 18...
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Worden Trainer
Joined: 10/1/2004
Posts: 18,819
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Your welcome. I edit all the posts above and changed the 8s to 18s.
- Craig
Here to Help!
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