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| Added: June 14, 2008 |
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TradeStation, indicator
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Macd Relative Strength Ratio:
This is an idea created by Gilbert Raff in the Nov. 1994 issue of Technical Analysis of Stocks and Commodities. It is meant to be use on End of Day charts, for stock pickers and/or mutual funds.Essentially, it tries to pick stocks/funds that will outperform the S&P index.
Take the Close of Data1 and divide it by the Close of Data2 (which is the S&p index).
This will give you the relative strength of the stock/fund to the S&P index. It is NOT the same thing as Welle's Wilder's RSI. The idea is to see if the issue is currently outperforming the S&p or not. In a market downtrend, it only will tell you wether or not the issue is declining at a faster rate than the S&P.
Then impose the MACD on the ratio of issue divided by the S&P. Use that for your buy/sell decisions. There are many variations on what can be done. Listed below is my variation on what can be done; you can do it differently.
Code:
Type : Indicator, Name : Macd RS Ratio
Inputs:
R(12),
S(26),
Q(9),
Price(close of data1/close of data2);
Vars:
Mo(0),Avg(0);
Mo=MACD(Price,R,S);
Avg=Xaverage(MACD(Price,R,S),Q);
Plot1(Mo,"Momentum");
Plot2(Avg,"Avgerage");
Plot3(Mo-Avg,"Difference");
Source: http://www.purebytes.com
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