Simply Advanced

Just launched...
XVI
Featuring the NEW Explorer
Discover the latest features at metastock.com/whats-new
Daily technical commentary
by expert analysts to help you
make smarter investing decisions
From daily blogs to live web shows, StockCharts.com hosts free
current market analysis and educational commentary from some
of the industry’s most distinguished technical analysts.

Free daily blogs featuring over a

John Murphy Martin Pring
dozen renowned technical commentators
StockCharts.com hosts free daily blog content from over a
dozen professional technical analysts, including prominent
names such as John Murphy, Martin Pring and Arthur Hill.
Thousands of online investors trust StockCharts.com
Arthur Hill Tom Bowley to provide the unbiased expert analysis and enriching
educational commentary they need to cut through the
noise and make smarter investment decisions.

Greg Schnell Chip Anderson

Live web shows hosted by
seasoned market technicians
Our free web shows are hosted by some of the financial
industry’s most distinguished chartists. Join these technical
titans LIVE as they put their years of experience on display
Carl Swenlin Erin Swenlin
and share invaluable insights into the tools and strategies
they use in their own trading. Visit StockCharts.com/webinars
to learn more and watch our next show.

Gatis Roze Julius de Kempenaer

and more!

StockCharts.com
© StockCharts.com,Inc. All Rights Reserved. Information provided by StockCharts.com is not investment advice. You are responsible for your own investment decisions.
Stocks & Commodities V. 1:7 (166-167): The Market Direction Indicator Anticipating Moving Average Crossovers by DONALD R. LAMBERT

The Market Direction Indicator Anticipating

Moving Average Crossovers
by DONALD R. LAMBERT

O ver the years, trading methods have evolved from the very simple (such as the CHANGCHENG
BANFA or "Great Wall Method," which dates back to the Orient of the 1700's), to Point and Figure, to
numerous modern complex calculation methods.
Despite all the modern techniques available, many traders still cling to their moving averages (and
sometimes crossover) systems, and make money doing so, but unfortunately not as much money as they
should. Since moving averages always lag behind actual price movements, devotees of the moving
average always get their signals a little late, often too late to take effective action.
Sometimes though if the trader is willing to venture a little beyond his customary technique, performance
can be improved through "anticipation calculations;" that is, computing in advance of market activity the
price that would be necessary to cause a moving average to cross the price line. The calculation for this
method is as follows:
Crossover Price =

Total of N - 1 days of prices

N- 1
where an N day moving average is being used.
Calculate the price required to cause two moving averages to cross as follows:
Crossover Price =

n • (Total of N -1 Prices) - N • (Total of n -1 Prices)

N-n
where an N and an n day average are being used.
This calculation allows the trader to gain a day's trading advantage when a crossover has occurred, since
it gives him the information needed to act at the close, rather than wait for the next day and risk possible
further profit erosion.
It's possible, of course, to plot crossover prices on the same chart as actual market prices, but in many
instances the extreme price fluctuations make such a graph impractical. A solution to this might be to
plot crossover prices only when they are near market prices (say within 20% or so).
I believe that a great deal of useful information may be obtained by plotting not crossover prices
themselves, but instead the amount of change in these prices from day to day. To make interpretation
easier I take these crossover price changes and divide each by the past two days' average price, then
multiply each by 100 to change them to a size independent percentage figure. Reversing the sign of the
percent also helps with the interpretation.

Article Text Copyright (c) Technical Analysis Inc. 1

Stocks & Commodities V. 1:7 (166-167): The Market Direction Indicator Anticipating Moving Average Crossovers by DONALD R. LAMBERT

I call the resulting percentage the "Market Direction Indicator." Its formula is:
M.D.I. =

100 (Crossover Price Yesterday - Crossover price Today )

Past Two Days Average Price

The example shown in my chart of Treasury Bond prices uses 70-day and 20-day moving averages. The
use of other time periods for the moving averages can vastly affect the shape of the resulting M.D.I. chart.
For the trader who is willing to go beyond moving averages, the M.D.I. could mean better performance,
which means higher profits.

PROGRAMMING CONVENTIONS FOR BASIC TECHNIAL ANALYSIS SUBROUTINES:

NO Input/Output routine is provided only a generic BASIC computational subroutine containing the
fundamental technical analysis is provided. This subroutine should with only minor changes work on any
computer using the BASIC language.
INPUT data (daily weekly monthly etc.) must be provided by the user (i.e. YOU,) in the following matrix
format: X(7,NUM) where
NUM = Number of days in the Matrix
X,(0,NUM) = Date Optionaly used to store the date
X(l,NUM) = Open Mean open trade price for the day
X(2,NUM) = High Highest trade price for the day
X,(3,NUM) = Low Lowest trade price for the day
X(4,NUM) = CloseLast trade or bid price for the day
X(5,NUM) = Volume Number of shares or contracts traded
X(6,NUM) = Open Interest Total contracts or optioned shares
X(7,NUM) = STUDY Last STUDY results stored here
B = Beginning First day of Matrix (usually = 1)
E = Ending Last day of Matrix ,(usualy = NUM)
OUTPUTS are usually stored in the STUDY column X(7,NUM) at the end of the subroutine. NO
printing or graphics is provided of the subroutine output.

Article Text Copyright (c) Technical Analysis Inc. 2

Stocks & Commodities V. 1:7 (166-167): The Market Direction Indicator Anticipating Moving Average Crossovers by DONALD R. LAMBERT

1100 REM "MARKET DIRECTION INDICATOR"

BY JACK K. HUSTON
COPYRIGHT (C) 1983 BY TECHNICAL
ANALYSIS OF STOCKS AND COMMODITIES
1105 LET T$ = "M.D.I":
REM STUDY TITLE
1110 LET P(6) = 1:
LET P(7) = 0:
REM DRAW A REFERENCE BASE LINE AT
ZERO
1120 LET P$ = "SHORT MOVING AVERAGE (DAYS): ":
GOSUB 1998:
LET K = ABS ( INT (N))
1130 LET P$ = "LONG MOVING AVERAGE IN DAYS: ":
GOSUB 1998:
LET T = ABS (INT (N))
1140 LET U = 0:
LET W = 0
1150 FOR I = B TO T - 1
1160 LET W = X(1,I) + X(2,I) + X(3,I) +X(4,I) + W
1170 NEXT I
1180 FOR I = T - K + 1 TO T -1
1190 LET U = X(1,I) + X(2,I) + X(3,I) + X(4,I) + U
1200 NEXT I
1210 FOR I = B + T - 1 TO E
1220 LET Z = (K * W - T * U) / 4 *
(T - K)
1230 LET X(7,I) = 100 * (Y - 2) / (
X(1,I) + X(2,I) + X(3,I) + X(4
,I) + X(1,I - 1) + X(2,I - 1)
+ X(3,I - 1) + X(4,I - 1)) /
8
1240 IF (I = B + T - 1 OR I = B + T
) THEN
LET X(7,I) = 0
1250 LET Y = Z:
IF I > E THEN
GOSUB 1280
1260 LET W = (X(1,I +1) +X(2,I +
1) + X(3,I + 1) + X(4,I + 1)
- X(1,I - T) - X(2,I - T) - X
(3,I - T) - X(4,I - T)) / 8 +

Article Text Copyright (c) Technical Analysis Inc. 3

Stocks & Commodities V. 1:7 (166-167): The Market Direction Indicator Anticipating Moving Average Crossovers by DONALD R. LAMBERT

W
1270 LET U = (X(1,I + 1) +X(2,I +
1) + X(3,I + 1) + X(4,I + 1)
- X(1,I - K) - X(2,I - K) - X
(3,I - K) - X(4,I - K)) / 8 +
U
1280 NEXT I :
LET B = T + 2:
RETURN
1998 VTAB 2:
HTAB 1:
PRINT P$;:
INPUT " ";N:
RETURN
END OF LISTING
PROGRAM LEGHTH: 21 LINES / 846 BYTES

Article Text Copyright (c) Technical Analysis Inc. 4

 Traders take many paths to reach their destination.
Can your platform get you there?

Search apps and services to personalize the

NinjaTrader platform to meet your requirements.
Indicators, automated strategies, free tools & more.

Explore now at ninjatraderecosystem.com

Futures, foreign currency and options trading contains substantial risk and is not for every investor. Only
risk capital should be used for trading and only those with sufficient risk capital should consider trading.
 How much is your
broker charging you?

US Margin Loan Commission Rates

Rates Comparison Comparison
Equity Options1 Base
$300K Trades per contract
no base cost
Interactive Brokers2 3.36%3 $2.23
$0.67 per contract4
$6.95 base
E-Trade 8.75% $6.95
+ $0.75 per contract
$4.95 base
Fidelity 7.82% $4.95
+ $0.65 per contract
$4.95 base
Schwab 7.82% $4.95
+ $0.65 per contract
$6.95 base
TD Ameritrade 8.50% $6.95
+ $0.75 per contract
Each firm’s information reflects the standard online trades pricing obtained from the respective firm’s
websites as of 12/5/18. Pricing and offers subject to change without notice.

To see the full comparison visit:

ibkr.com/iwantmore

Interactive Brokers Rated #1

Best Online Broker 2018 by Barron’s*

Trading on margin is only for sophisticated investors with

high risk tolerance. You may lose more than your initial investment.
Member - NYSE, FINRA, SIPC – Supporting documentation for any claims and statistical information will be provided upon request. Services vary by firm. *Interactive
Brokers rated #1, Best Online Broker according to Barron’s Online Broker Survey 2018: All Together Now, March 26, 2018. For more information see, ibkr.com/info -
Barron’s is a registered trademark of Dow Jones & Co. Inc. [1] Options involve risk and are not suitable for all investors. For more information read the “Characteristics
and Risks of Standardized Options”. For a copy, call 312 542-6901. [2] The IB commission rates shown are the average of the client commissions for trades executed in
November 2018 and are subject to minimums and maximums as shown on the IB website. Some of the firms listed may have additional fees and some firms may reduce
or waive commissions or fees, depending on account activity or total account value. Under some commission plans, overnight carrying fees may apply. [3] IB calculates
the interest charged on margin loans using the applicable rates for each interest rate tier listed on its website. For additional information on margin loan rates, see ibkr.
com/interest. [4] $1.00 commission minimum.
02-IB19-1167CH1165
subscribe or renew today!
Every Stocks & Commodities subscription
(regular and digital) includes:
• Full access to our Digital Edition
The complete magazine as a PDF you can download.
• Full access to our Digital Archives 8999
1 year.................
$
That’s 35 years’ worth of content!

2 years............ 149
• Complete access to WorkingMoney.com $ 99
The information you need to invest smartly and successfully.

3 years............ 199
• Access to Traders.com Advantage $ 99
Insights, tips and techniques that can help you trade smarter.

PROFESSIONAL TRADERS’ STARTER KIT

A 5-year subscription to S&C magazine that includes
everything above PLUS a free* book, Charting The Stock
Market: The Wyckoff Method, all for a price that saves
you $150 off the year-by-year price! *Shipping & han-
dling charges apply for foreign orders.

5 years..........
$
29999
That’s around $5 a month!

Visit www.Traders.com to find out more!

Email: Circ@Traders.com • Phone: 206-938-0570 facebook.com/STOCKSandCOMMODITIES @STOCKSandCOMM