Stocks & Commodities V. 27:10 (22-31): Volume-Weighted MACD Histogram by David Hawkins

Stocks & Commodities V. 27:10 (22-31): Volume-Weighted MACD Histogram by David Hawkins
Item# V27_C10187HAWKPDF
$3.95
Availability: In Stock

Product Description

Volume-Weighted MACD Histogram by David Hawkins

Find out how the performance of the Macd improves by volume-weighting it.

MY goal was to make the Macd-histogram (Macdh) perform better by volume weighting it. It uses three exponential moving averages. So, whatís needed is to volume weight the exponential moving average (Ema). The Ema is widely used because it is more responsive than the simple moving average (Sma). The volume-weighted moving average (Vwma) responds proportionately more to higher-volume trading so it emphasizes significant trading while deemphasizing less-significant, light-volume trading. The goal here is to combine them into one moving average, the volume-weighted exponential moving average (Vwema), using an algorithm that is simple and easy to implement with indicator scripting languages in standard technical analysis programs, such as the Indicator Builder in MetaStock.

EMA FROM THE SMA

The Sma is just the mean of the prices of the last n trading bars. One simply takes the sum of those prices and divides by n. To make the Ema, we start by making the Sma for the first n bars in the dataset. Thereafter, the general formula is:

Percentage * (present barís price) + (1 Ė percentage)*(last barís Ema)

Where, for an n-period Ema, the percentage is given by 2/(n + 1)

This has the effect of both giving most weight to the most recent bars and of including information from all previous bars with decreasing weights going back in time.




FOR THOSE ORDERING ARTICLES SEPARATELY:
*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.




Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order