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#1 Posted : Tuesday, November 2, 2004 5:21:23 PM(UTC)

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The MetaStock Formula for MACD is: Mov(C,12,E)-Mov(C,26,E) Note that here we use periods 12 and 26 and not a percentage value. The formula to calculate the number of periods for an Exponential Moving Average from an exponential average percentage value is as follows: % = 2 / (t+1) t = the periods of the EMA The following is an example of how to solve for “t”, using a value of 10% or 0.1: 0.1 = 2 / (t+1) 0.1 (t+1) = 2 (t+1) = 2 / 0.1 or 20 t = 19 So for 12 we are using : Percentage=2/(12+1) Percentage=2/13 Percentage=0.1538461 We round this number to say 15% or 0.15 For 26 we have 0.075 Now let's assume we decompose the MACD formula using these values. Here is what it would look like: Our first average is : Mov(C,12,E) Which is : (C*0.15)+(Prev*(1-0.15)) (C*.15)+(prev*.85) Our second average is : Mov(C,26,E) Which is : (C*0.075)+(prev*(1-0.075)) (C*.075)+(prev*.925) MA1:=(C*.15)+(prev*.85); MA2:=(C*.075)+(prev*.925); Ma1-MA2
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