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

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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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