Microscopic technical analysis

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Basic method to see more detail about your Technical Analysis indicator

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Microscopic technical analysis

  1. 1. Microscopic Technical Analysis MM Dandytra, CSA, CFTe
  2. 2. English Is Not My Mother Tongue CFTe Lv.2 Exam
  3. 3. Technical Analysis John J. Murphy • “Technical Analysis of the Financial Markets” • The study of market action through the use of chats for the purpose of forecasting future price trends Martin J. Pring • “Technical Analysis Explained” • The art to identify a trend reversal at a relatively early stage and ride on that trend until the weight of the evidence shows or proves that the trend has reversed John D. Magee and Roberts D. Edwards • “Technical Analysis of Stocks Trends” • The science of recording in graphic form the actual history of trading and then deducing from that pictured history the probable future trend
  4. 4. Beginning
  5. 5. Who is He ?
  6. 6. One of His Important Book is ...
  7. 7. Familiar with this ? MOVING AVERAGE CONVERGENCE DIVERGENCE
  8. 8. MACD (Moving Average Convergence Divergence)  MACD Line  Difference between EMA12 and EMA26  EMA12 – EMA26  Signal Line (Trigger Line)  Smoothing the difference with EMA9  EMA(EMA12 – EMA26), 9 period  MACD Histogram  Difference between MACD Line and Signal Line  MACD Line – Signal Line
  9. 9. MACD in JCI
  10. 10. MACD Line shows the detail differences between two lines (indicators)  MACD Line shows the “Detail Movement” between EMA12 (Short MA) and EMA 26 (Long MA)  Is Short MA getting farther to Long MA or it is getting closer  When does Short MA is about to Cross Long MA from Below or Above
  11. 11. Signal Line shows the relative direction of MACD Line  Signal Line informs us the direction of MACD Line by looking the line from 9 periods ago (Smoothing)  If MACD Line is above Signal Line, then MACD Line is Rising and vice versa  Signal Line is a “Base” to tell the relative direction of MACD Line
  12. 12. MACD Histogram shows the more detail differences between two lines (indicators)  MACD Histogram represents detail differences between MACD Line and Signal Line  MACD Histogram also informs us when MACD Line and Signal is about to Cross to each other  When MACD Line is about to change its Direction
  13. 13. More About MACD
  14. 14. Divergence
  15. 15. Detail Differences of Two Lines
  16. 16. Momentum #1
  17. 17. Momentum #2
  18. 18. The Root of Microscopic Technical Analysis
  19. 19. Slope
  20. 20. Which one has the strongest Uptrend and Downtrend Uptrend #1 – WIKA Downtrend #1 – ADRO Uptrend #2 – WSKT Downtrend #2 – BUMI
  21. 21. When MA Rise, Price Momentum is Up and When MA Fall, Price Momentum is Down
  22. 22. How To Determine The Single MA Direction ?
  23. 23. First ...  How do you tell a Rise or Fall ?  By comparing Current Data with Previous Data  If Current Data is Above Previous Data  A Rise  If Current Data is Below Previous Data  A Fall  Remember principles of :  Black and White Candlestick  Solid and Hollow Candlestick  Short and Long MA  Price and MA  Chinkou Span of Ichimoku Kinko Hyo
  24. 24. Previous Data Line  Current Data versus Yesterday’s Current Data  Current Data versus 2 Previous Days  Current Data versus 3 Previous Days  ...  Current Data versus 26 Previous Days (Chikou Span’s Priciple)
  25. 25. AKRA + MA20 + Yesteday’s MA20
  26. 26. Why not Averaging with Moving Average (or Smoothing) ?  Previous Data Line is a different approach  Easier to be “Understood” by common people  Should be logically accepted  As well as Averaging or Smoothing  Still, Smoothing is also acceptable and can be apply the same way with Previous Data Line  However, in this presentation, Previous Data Line is the only method used
  27. 27. Kairi* . *Bloomberg Version
  28. 28. JCI with SMA200
  29. 29. As a Matter of Fact ...
  30. 30. Re-Check More Detail ...
  31. 31. ... Then ...
  32. 32. You Should (Could) See The Weakening of a Trend by Measuring The Distance between Price and Moving Average
  33. 33. Kairi or “a Distance” X ~X
  34. 34. Microscopic Technical Analysis Methods
  35. 35. Microscopic Technical Analysis  MACD Concept  MACD Line  Signal Line  Histogram  Slope  Kairi  Bollinger Band Complete Method  Percentage of Bollinger Band  Bandwidth
  36. 36. Overall Microscopic Technical Analysis
  37. 37. The Modified Indicators (My Style)  MACD Line  Difference MA60 – MA200  Signal Line and Histogram  Histogram Difference MA60 – MA200  Slope  Slope of MA200  Kairi  Distance Close to MA200
  38. 38. Difference MA60 – MA200
  39. 39. Difference MA60 – MA200  Why MA60 and MA200  MA60 : 3 Months Average or Quarterly Average or Quarter on Quarter (QoQ)  MA200 : A Year Average or Yearly Average or Year on Year (YoY)  The Formula  Main Line : MA60 – MA200
  40. 40. Copying MACD Line Style (With Signal Line)  MACD Signal Line :  Smoothing or Averaging The MACD Line with 9 periods of average (9 Candles – Moving Average)  But this time, I prefer to use Previous Data. So the Lines are :  Difference MA60 – MA200 Line  The Previous Data Line of “Difference MA60 – MA200”  The Previous Data use 3 periods ago  1 or 2 periods are still make so much Whipsaw
  41. 41. Difference MA60-MA200 (AFL)  _SECTION_BEGIN("Difference MA60-MA200");  Difference = (MA(C,60))-(MA(C,200));  Previous = Ref(Difference,-3);  Plot(Difference, "MACD 60-200", colorBlack, styleLine);  Plot(Previous, "MACD 60-200 Line", colorBlack, styleDashed);  Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);  _N(Title = StrFormat("- Difference MA60-MA200 -"));  _SECTION_END();
  42. 42. JCI with Difference MA60 – MA200 (and Signal Line)
  43. 43. Histogram Difference MA60 – MA200
  44. 44. Is That Bullish / Golden Crossover ?
  45. 45. See More Detail with Histogram
  46. 46. Histogram  Difference between MACD Line and Signal Line  Formula : MACD Line – Signal Line  Histogram in the previous slide :  Difference between “Difference MA60 – MA200” and Previous Data Line of “Difference MA60 – MA200”
  47. 47. Histogram MA60-MA200 (AFL)  _SECTION_BEGIN("Difference MA60-MA200");  Difference = (MA(C,60))-(MA(C,200));  Previous = Ref(Difference,-3);  Histogram = Difference - Previous;  Plot(Histogram, "Hist. MACD 60-200", colorBlack, styleHistogram);  Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);  _N(Title = StrFormat("- Histogram Difference MA60- MA200 -"));  _SECTION_END();
  48. 48. Slope of MA200
  49. 49. AKRA + MA20 + Yesteday’s MA20
  50. 50. Slope and Previous Data Line (AFL)  _SECTION_BEGIN("Slope and Previous Data Line");  MovAvg = MA(C,20);  Previous = Ref(MovAvg,-1);  Plot(MovAvg,"MA20", colorBlack, styleLine);  Plot(Previous,"Previous", colorBlack, styleDashed);  _SECTION_END();
  51. 51. Can Histogram Be Applied ? Can …  _SECTION_BEGIN("Histogram Slope and Previous Data Line");  MovAvg = MA(C,20);  Previous = Ref(MovAvg,-1);  Histogram = MovAvg - Previous;  Plot(Histogram, "Histogram", colorBlack, styleHistogram);  Plot(0,“Nol", colorBlack, styleDashed);  _N(Title = StrFormat("- Histogram Slope and Previous Data Line -"));  _SECTION_END();
  52. 52. With Histogram …
  53. 53. … Or with Line …
  54. 54. Slope and Previous Data Line with “Line”  _SECTION_BEGIN("Histogram Slope and Previous Data Line");  MovAvg = MA(C,20);  Previous = Ref(MovAvg,-1);  Histogram = MovAvg - Previous;  Plot(Histogram, "Histogram", colorBlack, styleLine);  Plot(0,“Nol", colorBlack, styleDashed);  _N(Title = StrFormat("- Histogram Slope and Previous Data Line -"));  _SECTION_END();
  55. 55. Distance Close to MA200
  56. 56. Stocks Above MA200 (Kairi MA200 = Positive)
  57. 57. Stocks Below MA200 (Kairi MA200 = Negative)
  58. 58. JCI Target with Kairi MA200
  59. 59. Distance Close to MA200 (AFL)  _SECTION_BEGIN("Distance Close to MA200");  MA200 = MA(C,200);  KairiMA200 = ((C - MA200)/C)*100;  Plot(KairiMA200 , "MACD 60-200", colorBlack, styleLine);  Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);  _N(Title = StrFormat("- Distance Close to MA200 - "));  _SECTION_END();
  60. 60. Further Application
  61. 61. MACD Line Concept  Any Moving Average to another Moving Average :  EMA 12 and EMA 26  MA 60 and MA 200  MA 5 and MA 8  MA 13 and MA 21
  62. 62. MA5 and MA8
  63. 63. MA5 and MA8 (AFL)  _SECTION_BEGIN("Difference MA5-MA8");  MA5 = MA(C,5);  MA8 = MA(C,8);  Difference = MA5-MA8;  Plot(Difference, "MA5-MA8", colorBlack, styleLine);  Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);  _N(Title = StrFormat("- Difference MA5-MA8 -"));  _SECTION_END();
  64. 64. Signal Line & Slope Concept  Slope of Moving Average  MA50  MA100  MA200  Slope of Middle Band of :  Bollinger Band  Donchian Channel  Keltner Band  Slope of Tenkan Sen
  65. 65. Slope of Middle of Bollinger Band
  66. 66. Slope of Middle of Bollinger Band (AFL)  _SECTION_BEGIN("Slope of Middle of Bollinger Band");  MidBoll = MA(C,20);  Previous = Ref(MidBoll ,-1);  SignalLine = MidBoll - Previous ;  Plot(SignalLine, "Slope of Middle of Bollinger Band", colorBlack, styleLine);  Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);  _N(Title = StrFormat("- Slope of Middle of Bollinger Band -"));  _SECTION_END();
  67. 67. Histogram Concept (with Signal Line)  Stochastic Oscillator + Histogram between %K and %D  RSI + Smoothing RSI or Previous Data Line of RSI + Histogram between RSI and Additional Line  Apply as well as William’s %R  Percentage of Bollinger Band (%B)
  68. 68. Stochastic Oscillator + Histogram between %K and %D
  69. 69. Stochastic Oscillator + Histogram between %K and %D (AFL)  _SECTION_BEGIN("Stochastic Oscillator %K");  periods = Param( "Periods", 15, 1, 200, 1 );  Ksmooth = Param( "%K avg", 3, 1, 200, 1 );  Dsmooth = Param( "%D avg", 3, 1, 200, 1 );  K = StochK( periods , Ksmooth);  D = StochD( periods , Ksmooth, DSmooth );  Plot( K, _DEFAULT_NAME(), ParamColor( "Color %K", colorBlack ), ParamStyle("Style %K"));  Plot( D, "Stochastic %D", ParamColor( "Color %D", colorBlack), ParamStyle("Style %D",styleDashed));  Plot(80 ,"Overbought Level",colorBlack,0 | styleNoLabel);  Plot(20 ," Oversold Level",colorBlack,0| styleNoLabel);  _N(Title = StrFormat("- Stochastic Oscillator (15,3,3) -"));  _SECTION_END();  _SECTION_BEGIN(“Histogram Stochastic Oscillator %K");  periods = Param( "Periods", 15, 1, 200, 1 );  Ksmooth = Param( "%K avg", 3, 1, 200, 1 );  Dsmooth = Param( "%D avg", 3, 1, 200, 1 );  K = StochK( periods , Ksmooth);  D = StochD( periods , Ksmooth, DSmooth );  Histogram = K - D;  Plot(Histogram, "Histogram", colorBlack, styleHistogram);  Plot(0, "Nol", colorBlack, styleDashed | styleNoLabel);  _N(Title = StrFormat("- Histogram of Stochastic Oscillator (15,3,3) -"));  _SECTION_END();
  70. 70. Kairi Concept  Price with any Middle Bands :  Bollinger Band  Donchian Channel  Keltner Band
  71. 71. Kairi of Middle of Donchian Channel
  72. 72. Kairi of Middle of Donchian Channel (AFL)  _SECTION_BEGIN("Kairi of Middle of Donchian Channel");  Highest20D = HHV(H,20);  Lowest20D = LLV(L,20);  MidDonchian = (Highest20D + Lowest20D ) / 2 ;  Kairi = ((C - MidDonchian )/C)*100;  Plot(Kairi , "Kairi Mid Donchian", colorBlack, styleLine);  Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);  _N(Title = StrFormat("- Kairi of Middle of Donchian Channel -"));  _SECTION_END();
  73. 73. Any Questions ?
  74. 74. Muhamad Makky Dandytra, CSA, CFTe Working Experiences  Currently as Junior Investment Manager at Mandiri Healthcare  3 year as Technical Analyst at Trimegah Securities, AmCapital Indonesia and Anugerah Securindo Indah  1 year as Equity Sales at Danareksa Sekuritas Certifications  Certified Financial Technician (CFTe) from IFTA  Bronwen Wood Award 2011 from IFTA  Certified Securities Analyst (CSA) from SASB Indonesia  mmdandytra@gmail.com  (+62) 813 145 45 317 Contact Information

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