New York NY USA
Experience: Intermediate
Platform: esignal, thinkorswim,
Trading: Stocks
Posts: 122 since Oct 2012
Thanks Given: 63
Thanks Received: 35
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I could be wrong, but when I looked at the code for the 6.5 version of the elder script I think it had the indicator wrong. I believe that the elder is supposed to compare a 13 day EMA with a previous 13 day EMA. Then it was supposed to look at the MACD histogram. If both of these are trending positive you have a buy signal, or if both are trending negative you have a sell signal. In that script it simply compared a 13 day EMA to the MACD histogram.
I believe that what I described is what Elder originally proposed.
From "stockcharts.com"
Green Price Bar: (13-period EMA > previous 13-period EMA) and
(MACD-Histogram > previous period's MACD-Histogram)
Red Price Bar: (13-period EMA < previous 13-period EMA) and
(MACD-Histogram < previous period's MACD-Histogram)
Price bars are colored blue when conditions for a Red Price Bar or
Green Price Bar are not met. The MACD-Histogram is based on MACD(12,26,9).
I only mention this because I have seen youtube videos that also describe the indicator incorrectly.
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