Kase on Technical Analysis Workbook, + Video Course

CHAPTER 12 Oscillators: Trading Oscillators Systems

ANSWER 12.1   R US Daily MACD (12, 26, 9)

1. Red divergence lines show turns caught by MACD.
2. Turns denoted by blue arrows, as well as nondivergent comparisons shown in blue.
3. Three-bar plateau on the MACD circled.
4. No, the MACD does not generate OBOS signals.

ANSWER 12.2   BIDU Daily with MA Oscillator, Blue (5, 15, 1), and MACD, Green (default)

1. No, each has a similar appearance.
2. The reason is that both are moving average oscillators; the only difference is that the MACD always uses exponential moving averages, with defaults of 12, 26, and 9, while a MAOsc is more generic and can use simple, exponential, or weighted moving averages and has no standard default.
3. Blue divergences are valid on the MAOsc.
4. Blue divergences are valid on the MACD.
5. The divergences were from the first to second and first to third peaks at area labeled 5.
6. The divergence the MAOsc missed altogether is labeled 6, as shown by the red arrow. The oscillator has a higher high, not a lower or equal high as required.
7. The MAOsc was “off tolerance” on two divergences, as shown in red, labeled 7. In both cases, momentum peaks took place three bars after the price peaks.
8. The purple divergence line labeled 8 shows an instance of bullish flat divergence on the MACD. ...