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In his book The Business of Share trading, Leon Wilson says he converts the MACD into a percentage indicator so that it is the percentage of separation that is displayed on the RHS rather than the actual dollar values between the 2 moving averages. He says this form is available in Bull Charts. Can anyone tell me how this might be done?
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There are a couple solutions for this. You can create a custom indicator using the long-form of MACD, per the example below:
{Percent MACD}
X:=Input("1st MOV:",1,999,12);
Y:=Input("2nd MOV:",1,999,26);
((Mov(C,X,E) - Mov(C,Y,E)) / Mov(C,Y,E)) * 100
Alternately, you can use the "Price Oscillator" that is already built-in to MetaStock. Simply change the values to the desired "Short-term" (i.e. 12), "Long-term" (i.e. 26), and "Method" (i.e. Exponential).
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The MetaStock MACD function uses EMA periods of close enough to 12.3333 and 25.6667. However, the exponential Mov() function is restricted to whole numbers, and using two EMAs to replicate the MACD() function will give results that are a little off. It's not really a problem but one should be aware that there will be small differences between an actual MACD and a simulated MACD.
One fix for this is to use the EMA function of the MSTT DLL as shown below. The 5th and 6th decimal places in the Input() functions are overkill as eliminating those numbers makes very little difference.
{Percent MACD}
X:=Input("1st MOV:",1,999,12.333333);
Y:=Input("2nd MOV:",1,999,25.666666);
((ExtFml("MSTT.EMA",C,X)-
ExtFml("MSTT.EMA",C,Y))/
ExtFml("MSTT.EMA",C,Y))*100;
Roy
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 1 user thanked mstt for this useful post.
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Thanks for that Roy, I get the point you are making but I don't think the differences involved are of any real value to me. I couldn't try your suggested improvement because I don't currently have access to the MSTT forum, in fact I wasn't aware of its existence but I'll certainly be having a good look at the site over the next few days.
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Hi maeday
No worries about the DLL - email me at rlarsen@quik.co.nz and I'll tell you how you can access it. I agree that the differences are very small but sometimes there are situations when "near enough" is just not good enough.
Roy
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