Experiments in Technical Analysis

karthikmarar · #**881** 15th April 2007, 12:12 AM

Dear Asish

Ashish is right. It was in lighter vein. Ashish will never ridicule as our friendship goes beyond all these.

Looking forward to your post on the interesting topic proposed by you.

Warm regards

Karthik

uasish · #**882** 15th April 2007, 12:14 AM

Sorry misunderstood .

aca_trader · #**883** 15th April 2007, 11:01 PM

Quote:

Originally Posted by uasish

Sorry misunderstood .

It's all right. All the best wishes for your health.

Best Regards,
--Ashish

ashutosh.krsrivastava · #**884** 18th April 2007, 12:18 PM

Bhai log,
agar tension khatam ho gaya ho to shuru karen???
Well seniors..... waiting for anything new to help me. Anything....

Ropewalker · #**885** 18th April 2007, 09:32 PM

Quote:

Originally Posted by karthikmarar

Hi Friends

Thanks Rajeev and Ananth. I sure hope this will be useful and other too will share their experience with MACD for everybody to learn.

Ananth, Wishing you and all members of the forum a happy Shankaranti and Pongal

Let us continue with our discussion on MACD.......

One of the most important signals based on the MACD is DIVERGENCE. We will postpone discussion on this till little later.

Now Let us take a deeper look at the MACD charts and try to learn a little more about the additional signals that we get and how to trade them.
So far we were talking about Bullish crossover after a downtrend. In this case the Bullish crossover occurred below the zero line. However the Bullish crossover can occur above the zero line. Such crossover occurs when the stock dips temporarily before proceeding with the up trend. Such crossovers above the zero line produce some excellent trades.

Bearish crossovers occurring above the zero line generally acts as warning signals as it indicates waning of the positive momentum. Bearish crossover below the zero line indicates strong bearishness.

For the making the discussion more interesting we will first make a system with the following criteria.

BUY when there is a Bullish MA crossover.
SELL when there is a Bearish MA crossover.

Additionally the zero line bullish crossovers will be marked with an encircled number 1 with an arrow pointing upwards in order to indicate that the momentum has indeed reversed.

Bullish crossovers above the zero line will be marked an encircled number 2 and arrow pointing upwards indicating good trade opportunities.

Similarly bearish MA crossover above the zero line will marked 3 and bearish crossover of the zero line will be marked 4.

A chart and an Indicator with these signals enclosed

Next we will see if we can find more signals…

regards

Karthik

Hi Karthic,

Nice job, but thing is that in trending market MACD crossovers are fine but in trading days they give u whipsaws and tend to pile up huge brokerages without real profit with multiple entry exit. How can this be taken care of?

Thanks & regards
Ropewalker

karthikmarar · #**886** 18th April 2007, 11:03 PM

Hi Ropewalker

True, MACD crossover signals are good in a trending market and prone to whipsaws in a ranging market. However here an attempt has been made to reduce the whipsaws by combining the MACD with ADX. Look at what I have defined as power buys, power dips and power hooks in the subsequent sections of the MACD discussion. This does help to reduce the whipsaws to a very great extent. Ofcourse it is impossible to eliminate whipsaws completely. The power signals also have the inhert draw backs of late entries. However it is always better to have late entries and good trades rather than trying to get early entries and not so sure trades.

warm regards

karthik

Ropewalker · #**887** 18th April 2007, 11:13 PM

Hi Karthik,

Ok, your MACD is slightly different. Would you mind to share how you combine it with ADX? I admit its impossible to design a system without whipsaws but we need to try and try for perfection. I have been testing an indicator named RMI that is better than RSI though built on the same observations. This way we need to try for the best.
regards
ropewalker

karthikmarar · #**888** 18th April 2007, 11:53 PM

Hi Ropewalker

Combining with ADX... It is already there in the discussion on MACD. If you are familiar with Amibroker afl then you can study the same. Also I had explained in my writeup which i had also uploaded on ************.

RMI... is the same ehler's stuff ??

regards

Karthik

Ropewalker · #**889** 19th April 2007, 12:02 AM

Hi,

RMI is Roger Altman's stuff. I may have missed out the post on that post of combining with ADX. I am also not familiar with Amibroker afl. I use Metastock.
Can yo get me the links on that post and if possible can you throw some light on this from Metastock angle.

Thanks
Ropewalker

karthikmarar · #**890** 19th April 2007, 09:56 PM

Hi Ropewalker

I had posted a link for a pfd version of the the MACD discussions. In case you had missed it, here is it again

http://www.************/dir/1136409/6...6/sharing.html

regards

Karthik

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