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Author Topic: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD  (Read 1853 times)

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nasigoreng

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Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« on: February 17, 2012, 04:33:30 PM »
[Stock quote not displayed : No stock code provided or invalid stock code]

What is Wahsei's stock screener ?

A Stock screener is a tool to help you to search, screen &  identify stocks that meet certain criteria.

Wahsei Stock Screener is specifically designed to use technical analysis tool/method such as MACD (Moving Average Convergence & Divergence), Stochastic & Bollinger Band.

I was told that more tools will be added to the list. Personally I feel that its meeting 75% of my needs. Trending, Volume, Fundamental Analysis such as EPS, PE, NTA etc need to be consider for longer term investment.

By selecting the criteria you want, eg : stock  with uptrend momentum ( will be explained later ) the screener will return stock that match that criteria. You can combine criteria for macd/stoch/bollinger the screening.

How do use The Stock Screener ?

Before I explain what criteria to input let me briefly go thru what are the technical  tools  & what are they for.

MACD ( From  Wikipedia )

MACD (moving average convergence/divergence) is a technical analysis indicator created by Gerald Appel in the late 1970s. It is used to spot changes in the strength, direction, momentum, and duration of a trend in a stock's price.
The MACD is a computation of the difference between two exponential moving averages (EMAs) of closing prices. This difference is charted over time, alongside a moving average of the difference. The divergence between the two is shown as a histogram or bar graph.
Exponential moving averages highlight recent changes in a stock's price. By comparing EMAs of different periods, the MACD line illustrates changes in the trend of a stock. Then by comparing that difference to an average, an analyst can chart subtle shifts in the stock's trend.

Since the MACD is based on moving averages, it is inherently a lagging indicator. As a metric of price trends, the MACD is less useful for stocks that are not trending or are trading erratically.

Please take note of the last sentence which is very important

Interpretation (From NasiGoreng )

There are 3 meaningful signals generated by the MACD indicator.

a) MACD line crosses the signal line
b) MACD line crosses zero
c) Divergence between the MACD line and the price of the stock or between the histogram and the price of the stock

Wahsei's Stock Screener capable of interpreting the a) & b).
for b) it's only avaialble for member with 50post & above..



Screening using MACD Criterias

MACD  -  Below Zero
MACD = EMA[stockPrices,12] – EMA[stockPrices,26]
meaning short term exponential moving average minus long term moving average
is zero meaning EMA for pervious 26 days = 12 days  --> stock hasnt changed much.
if below zero meaning short term is lower that longer term price -> price is lower now compared previously. smaller  the value means much more attractive is the stock

MACD Vs Signal
Signal = EMA ( 9 days )
If  MACD cross over ( larger than ) Signal --> uptrend momentum - bullish is indicated,
When MACD cross above Signal = Buy Call
When MACD Cross below Signal = Sell Call

My advise is not to just look at MACD only. need to refer to others for confirmation

« Last Edit: April 21, 2013, 04:19:55 PM by wah-sabi »
Disclaimer : Analysis is based of historical data, trend & tools. It was meant to provide additonal information for investor's before making any decision to invest. This does not consider other factors eg: natural disaster, political..etc. Pls use your own discretion in making decision to invest.

JustRich

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #1 on: February 17, 2012, 04:47:39 PM »
i hv to slowly digest bro nsgr tutorial....hehe.  thumb up for nsgr   :ok: :ok:

shahnd

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #2 on: February 21, 2012, 11:38:30 AM »
i see i see, that's how to use it.....need to continue reading...

dogdog

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #3 on: February 21, 2012, 12:08:42 PM »
Thanks. sounds interesting and confusing. any simpler method to digest the powerful and technical words? :ok: :ok: :ok:

cdpp76

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #4 on: March 06, 2012, 11:30:56 AM »
Good explaination.... :clap: :clap:

philipt

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #5 on: August 22, 2012, 03:33:28 PM »
great. easy to understand. :clap:

shing1987

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #6 on: August 25, 2012, 12:58:09 AM »
Thumbs up for Nasi Goreng~! THanks for the useful infos~ =)

snowberry

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #7 on: August 30, 2012, 06:44:46 PM »
only available to 50posts forumers....i still need to gambateh! :muscle:

junior10

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #8 on: August 30, 2012, 10:46:23 PM »
Thanks...working hard to reach 10 posts

newbird

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #9 on: August 31, 2012, 04:29:27 PM »
Thanks for the info.  Good. :ok:
May i ask, is EMA=Estimate Moving Average (just wild guess from me)?

wah-sabi

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #10 on: August 31, 2012, 05:27:38 PM »
This is what I learned when developing TA for this kopitiam

Exponential Moving Average

Exponential moving averages reduce the lag by applying more weight to recent prices. The weighting applied to the most recent price depends on the number of periods in the moving average.

Some actually used EMA & SMA understand the current trend or price moving. Moving averages lag because they are based on past prices

Formula :-
SMA ( Simple Moving Average ) : 10 period sum / 10

Multiplier: (2 / (Time periods + 1) ) = (2 / (10 + 1) ) = 0.1818 (18.18%)

EMA: {Close - EMA(previous day)} x multiplier + EMA(previous day).

newbird

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Re: Tutorial : Wahsei's Stock Screener for Dummies Part 1 - MACD
« Reply #11 on: September 01, 2012, 12:35:11 PM »
Many thks to Wahgor for the detail explaination, can I further confirm with you 2 things?
Coffee on me ;-)  :coffee: :coffee: :coffee:

1. How to derive the initial EMA eg EMA(previous day)
2. EMA(9  days) means calc base on 9 days period?

EMA: {Close - EMA(previous day)} x multiplier + EMA(previous day).

 

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