54 replies to this topic

### #21 ogm

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Posted 29 August 2013 - 06:16 PM

So you're absolutely sure that the 5% component is associated with the 19 day EMA and that when either the 5% or 10% component is above or below their zero lines it's associated with where the A/D line is in relation to these same EMA's??

And if you wish to continue to be stubborn on this subject matter as to maybe learning something important that could help your own analysis in the future, is there ANYONE out there who would really like to know exactly what these components represent once and for all??

Fib

Fib, you serious ? Please, Stop embarrassing yourself. If you want to sell a service interpreting some indicators, at least understand how they are calculated.

5% components IS the 19 EMA. and 10% component IS the 39 EMA. The original calculation by applying a smoothing constant, as opposed to the exponentially weighted calculation that is being used in standard charting software.( but pretty darn close analogy )

This is the original method for calculating the exponential moving average.

Here, from http://www.mcoscilla...lan_Oscillator/ You could've bothered to at least read that one.

" The McClellan Oscillator and Summation Index were developed by my parents back in 1969. Calculation of these indicators starts with the daily A-D difference, as you have probably already discerned. Two different exponential moving averages, the 10% Trend and the 5% Trend, are calculated to smooth the daily A-D data, and the McClellan Oscillator is the numerical difference between these two moving averages. The Summation Index is the total of all previous McClellan Oscillator values, and it is neutral at +1000 when calculated and calibrated properly.

Excel does contain an "exponential smoothing" routine in its Data Analysis set (see its Tools menu), and the description shows it to the same thing as an exponential moving average as most technical analysts would define the term. But one need not go through the complex indicator menus in Excel to construct these indicators.

The 10% or 5% figure refers to the smoothing constant of the moving average. The best way to think of it is that for the 10% Trend (for example), the new value for today's 10% Trend would be moved from yesterday's value by an amount equal to 10% of the difference between today's price (or A-D difference) and yesterday's 10% Trend value. Stated algebraically, it reads:

10%T(today) = 10%T(yesterday) + 0.1x[Price(today) - 10%T(yesterday)]

This can be further reduced to read:

10%T(today) = 0.9 x 10%T(yesterday) + 0.1 x Price(today)

The same calculation would work for a 5% Trend except that you would use 0.95 and 0.05. The reference to a set number of days (e.g. 19 or 39) refers to a formula which states that the smoothing constant can be chosen to correspond to a certain period by using the formula 2/(n+1), where n is the number of days. Thus a 19-day period would calculate out to:

2/(19+1), or 2/20, or 1/10, which is really 10%. "

And here is is in an easy to understand chart form ...

### #22 ogm

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Posted 29 August 2013 - 06:28 PM

Edited by ogm, 29 August 2013 - 06:29 PM.

### #23 diogenes227

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Posted 29 August 2013 - 06:33 PM

Edited by diogenes227, 29 August 2013 - 06:37 PM.

"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."

### #24 ogm

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Posted 29 August 2013 - 06:45 PM

I'll add one more chart, like Diogenes says. Keeping it simple.

And in light blue... the secret of "escape velocity" revealed

Edited by ogm, 29 August 2013 - 06:46 PM.

### #25 fib_1618

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Posted 29 August 2013 - 08:10 PM

So you're absolutely sure that the 5% component is associated with the 19 day EMA and that when either the 5% or 10% component is above or below their zero lines it's associated with where the A/D line is in relation to these same EMA's??

And if you wish to continue to be stubborn on this subject matter as to maybe learning something important that could help your own analysis in the future, is there ANYONE out there who would really like to know exactly what these components represent once and for all??

Fib, you serious ? Please, Stop embarrassing yourself. If you want to sell a service interpreting some indicators, at least understand how they are calculated.

5% components IS the 19 EMA. and 10% component IS the 39 EMA. The original calculation by applying a smoothing constant, as opposed to the exponentially weighted calculation that is being used in standard charting software but pretty darn close analogy)

Since you like to use the McClellan's as a proxy, how about if YOU take the time to educate yourself with the essay linked below on EMA's and how modern technical analysis got it start.

For everyone else, this is a great piece that should be reviewed at your leisure...serious technicians need only apply.

Oh...when you decide to get off your high horse, and you want to understand what you're looking at without guess work, my door is always open...at no charge.

For everyone else, you're welcome and have a great holiday weekend!

Fib

McClellan and Haurlan Booklet

Sherman McClellan's Speech

Better to ignore me than abhor me.

Wise men don't need advice. Fools won't take it. - Benjamin Franklin

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### #26 xe2dy

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Posted 29 August 2013 - 08:18 PM

This type of thread is what makes this board a must read every day! Thanks to all.

### #27 K Wave

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Posted 29 August 2013 - 09:32 PM

5% components IS the 19 EMA. and 10% component IS the 39 EMA. The original calculation by applying a smoothing constant, as opposed to the exponentially weighted calculation that is being used in standard charting software.( but pretty darn close analogy )

This is the original method for calculating the exponential moving average.

The 10% or 5% figure refers to the smoothing constant of the moving average. The best way to think of it is that for the 10% Trend (for example), the new value for today's 10% Trend would be moved from yesterday's value by an amount equal to 10% of the difference between today's price (or A-D difference) and yesterday's 10% Trend value. Stated algebraically, it reads:

10%T(today) = 10%T(yesterday) + 0.1x[Price(today) - 10%T(yesterday)]

This can be further reduced to read:

10%T(today) = 0.9 x 10%T(yesterday) + 0.1 x Price(today)

The same calculation would work for a 5% Trend except that you would use 0.95 and 0.05. The reference to a set number of days (e.g. 19 or 39) refers to a formula which states that the smoothing constant can be chosen to correspond to a certain period by using the formula 2/(n+1), where n is the number of days. Thus a 19-day period would calculate out to:

2/(19+1), or 2/20, or 1/10, which is really 10%. "

And here is is in an easy to understand chart form ...

When I run those formulas, I get 2/(39+1)=2/40=5%, and 2/(19+1)=2/20=10%.

So just wondering why you have it the other way round...with 10% as 39, and 5% as 19?

The 5% being equivalent to 39 make sense, as a 5% Trend is slower changing than a 10%, and 39 is larger(slower) than 19.

Or did you just make typos on your chart?

### #28 gman

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Posted 29 August 2013 - 09:44 PM

5% components IS the 19 EMA. and 10% component IS the 39 EMA.

omg,

The 1% is the 200 day EMA, the 5% is the 39 day EMA and the 10% is the 19 day EMA.

Gman

Edited by gman, 29 August 2013 - 09:45 PM.

Everything you know is wrong.
Black is white, up is down, and short is long.
And everything you thought was just so.

Important doesn't matter.

Weird Al Yankovic

### #29 K Wave

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Posted 29 August 2013 - 10:06 PM

Sherman McClellan's Speech

The first sentence of that article brought back some old memories...used to share a green screen Quotron with Fred Meissner in another life...

Spent more hours than I care to admit watching KWHY 22 and it's cast of characters (da_cheif included)...far better quality stuff than the crap on CNBC nowadays, which I never watch.

Cant believe its been 30+ years already....

### #30 thespookyone

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Posted 29 August 2013 - 10:43 PM

Sherman McClellan's Speech

The first sentence of that article brought back some old memories...used to share a green screen Quotron with Fred Meissner in another life...

Spent more hours than I care to admit watching KWHY 22 and it's cast of characters (da_cheif included)...far better quality stuff than the crap on CNBC nowadays, which I never watch.

Cant believe its been 30+ years already....

Quotron, wow, that brings back some memories-did a bit on one myself, LOL. When I first traded commodities, I was using an FM receiver that picked up quotes off satellites -it was incredibly expensive-like 350 bucks a month-and that only covered like 4 or so live commodity feeds.

And was John Bollinger better to watch back then than the current bunch of clowns?- a "fuzz"

Edited by thespookyone, 29 August 2013 - 10:47 PM.