CHAPTER 12Oscillators: Trading Oscillators Systems
Section 12 continues the discussion about momentum indicators by taking a look at oscillators. These are “rate of change” indicators that evaluate how quickly trend measures, most popularly, moving averages, are moving toward or away from each other. Indicators in this class include moving average oscillators (MAOsc) of which the well-known MACD is a subset. Kase's momentum indicators, based on oscillators relating to statistical measures of trend, are also discussed. Kase also discusses new upgrades and enhancement to her divergence algorithm.
QUESTION 12.1 R US Daily MACD (12, 26, 9)
Identify at least two turns the MACD caught with momentum divergence.
Identify at least two turns the MACD missed.
Circle an instance of a plateau on the MACD.
Can you circle an instance of overbought or oversold?
QUESTION 12.2 BIDU Daily with MA Oscillator, Blue (5, 15, 1), and MACD, Green (default)
Is there an easy way to tell the MAOsc from the MACD?
Why?
On the MAOsc, identify a valid divergence with a tolerance of two bars.
On the MACD, identify a valid divergence with a tolerance of two bars.
Find an instance where there are two valid divergences with the same starting peak.
Find a divergence the MAOsc missed altogether.
Find ...
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