Another EL Learning Exercise

I'm continuing down the path of learning EL, starting by exploring some of the indicators included with MultiCharts. When I saw one labeled "Elder Triple Screen", I thought "Well this might be an easier one for me to understand, since I have Elder's original book". So I started reviewing it.

While I'm thankful that MC included indicator code with the software package, I have to say that their Elder Triple Screen is, well, not really a triple screen. The original triple screen worked on three time frames, hence the name. The MC Triple Screen works on one time frame. It does use two screens, the slope of an EMA line and the slope of the MACD Histogram, to paint bars.

I'm not an expert on the history of EL by any means, but it seems to be coded with an older version of EL. I also found their variable-naming convention confusing. Here is my code, using different nomenclature that makes more sense to me.

 

Code

{ ------------------------------------------------------------------------------------------ A bit of practice here, along with "correcting" one of the existing MC indicators, which they called Elder Triple Screen. It's not - it's not even close to the original ETS. So I'm renaming it and re-coding it, using nomenclature that makes more sense to me. MC used variable names that didn't seem logical to me. I'm calling this the MACD_EMA Double Screen. One time frame, two screens. Next step will be doing a proper Elder Triple Screen that actually uses three time frames. How this works: If MACD Histogram slope is up and EMA slope is up, bars are painted green. If MACD Histogram slope is down and EMA slope is down, bars are painted red. If the slopes point in opposite directions, bars are painted yellow. ------------------------------------------------------------------------------------------- } Inputs: UpColor (Green), // Paintbar colors used DownColor (Red), FlatColor (Yellow), FastEMAPeriod (12), // Fast period used to calculate MACD SlowEMAPeriod (26), // Slow period used to calculate MACD SignalPeriod (9), // EMA period used for calculating the Signal Line EMAPeriod (26), // Exponential moving average period for calculating EMA slope MACDPrice (Close); // Closing price is used in the calculations Variables: MACDLine (0), // MACD line, also known as fast line, usually solid color SignalLine (0), // Signal line, also known as slow line, usually dashed line Histogram (0), // Histogram bars, which are MACDLine - SignalLine EMALine (0), // Exponential Moving Average PlotColor (0); EMALine = Xaverage (Close, EMAPeriod); MACDLine = (MACD (MACDPrice, FastEMAPeriod, SlowEMAPeriod)); SignalLine = Xaverage (MACDLine, SignalPeriod); Histogram = MACDLine - SignalLine; If (( EMALine > EMALine[1]) and (Histogram > Histogram[1])) then begin PlotColor = UpColor; end Else If (( EMALine < EMALine[1]) and (Histogram < Histogram[1])) then begin PlotColor = DownColor; end Else If (((EMALine <= EMALine[1]) and (Histogram >= Histogram[1])) or (EMALine >= EMALine[1]) and Histogram <= Histogram[1]) then begin PlotColor = FlatColor; end; PlotPaintBar (High, Low, Open, Close, "MACD_EMA Double Screen", PlotColor);

And here is the old code for comparison:

 

Code

{ 27499 } {Title: Alexander Elder Triple Screen: Initial Screen for Trading Prospects Description: 1. Paint the bar green when the EMA and the MACD histogram each turn up. Possible long setup. 2. Paint the bar red when the EMA and the MACD histogram each turn down. Possible short setup. 3. Paint the bar yellow when the EMA and the MACD go in different directions. No trade setup. } {Declarations} Inputs: LongColor(Green), {Paintbar color for possible long} ShortColor(Red), {Paintbar color for possible short} NoActionColor(Yellow), {Paintbar color for noaction} MACDPrice(Close), {MACD Price value used in calculation} MACDExpMALength(9), {MACD Smoothing Exponential Moving Average Length} MACDFastLength(12), {MACD Fast length value used in calculation} MACDSlowLength(26), {MACD Slow length value used in calculation} MALength(26); {Moving average length} Variables: AlertMessage(""), {Content of Alert Message} PlotColor(0), {Color to be plotted} PlotMessage(""), {Message to be plotted} MACDDiff(0), {MACD Difference used to plot MACD histogram} MAValue(0), {Current moving average value} MACDAvg(0), MACDValue(0), {Current MACD value} OldMACDDiff(0), {Prior MACD Diff Value to which current will be compared} OldMACDValue(0), {Prior MACD value to which current will be compared} OldMAValue(0); {Prior Moving average value to which current will be compared} {Procedure} OldMAValue=MAValue; {Capture old moving average value before calculating new} MAValue=Xaverage(Close,MALength); OldMACDDiff=MACDDiff; {Capture old MACD Diff value before calculating new} OldMACDValue=MACDValue; {Capture old MACD value before calculating new} MACDValue=MACD(MACDPrice, MACDFastLength,MACDSlowLength); MACDAvg=Xaverage(MACD(MACDPrice, MACDFastLength,MACDSlowLength),MACDExpMALength); MACDDiff=(MACDValue-MACDAvg); {MACDDiff is the diffe between MACD and MACD Exp Value} If ((MAValue > OldMAValue) and (MACDDiff > OldMACDDiff)) then begin PlotColor=LongColor ; AlertMessage="Long"; end Else If ((MAValue < OldMAValue) and (MACDDiff < OldMACDDiff)) then begin PlotColor=ShortColor ; AlertMessage="Short"; end Else If ((MAValue <= OldMAValue) and (MACDDiff >= OldMACDDiff)) or ((MAValue >= OldMAValue) and (MACDDiff <= OldMACDDiff)) then begin PlotColor=NoActionColor; AlertMessage="NoAction"; end; PlotPaintBar(High,Low,Open,Close, "Elder Screen", PlotColor) ; Alert( AlertMessage ) ;