Friday, May 17, 2013

KMACD - A variation of MACD to catch big trends



Weekend again and time for my usual post. This week I want to share a new variation of the popular MACD Indicator.
Last week we had a look at the adaptive MACD. The adaptive MACD was built on the difference of two adaptive moving averages. This time I tested with a variation of MAVD with the difference between a non adaptive moving average and adaptive moving average. One was a conventional EMA of period 14. The other was an adaptive moving average whose period is adapted to the dominant cycle. Just to differentiate we shall christen the new indicator as KMACD. During long trends the dominant cycle gets longer and the adaptive moving average period also gets longer making it much smoother however at the expense of lag. Because of this the KMACD catches the long term trends fully without the whipsaws which the conventional MACD is prone too. However there is always a price we have pay which is the lag. However with proper exit strategies one should be able to catch the big trends fully without the usual peak draw downs.


5 comments:

  1. SIR THANKS FOR PROVIDING USEFULL TECHNICALS AND AFLS .
    SIR I WANT TO KNOW MAY YOU ALSO WRITE AN AFL ACCORDING ME. I WILL TELL YOU THE REQUIREMENT WHAT I WANT .SIR IT IS VERY USEFULL FOR DAY TRADE.


    RAJESH SINGH
    9540623050.

    ReplyDelete
  2. Hi rajesh

    Normally I don't write afls for others. But if you have a good system and think you can share it with others I will definitely write the afl and share it. You can mail me details to karthikmarar@yahoo.com

    ReplyDelete
  3. Dear Karthik,
    thank you for your excellent amibroker coding. You are an inspiration for me. I have a question for you regarding the indicator in the 3rd window from the top in the above picture (the one with the magenta, blue, yellow and red dots). What is that indicator and if it is ok for you to provide us with the link to download the amibroker formula. Also i have to inform you that there is no link for downloading the 'Altr Trend' indicator for amibroker. Can you provide us with a link for downloding that indicator too? I thank you in advance.

    Kostas

    ReplyDelete