The DMACDP is a derivative of the MACD with specific inputs. Like all DiNapoli indicators, it is a leading indicator as it places a point one period ahead of the current bar and updates in real time as market data unfolds.
It also saves real estate in that the indicator goes directly on the chart window rather than below it like the standard MACD.
Uses are many and detailed. The simplest use is as a trend indicator. Price above the DMACDP is considered to be in an uptrend while price action below it is considered to be in a down trend.
Among the more advance uses of this indicator, is it's ability to track Algos. To know ahead of time where they are likely to act. For more information go to Fibtrader.com Start with the Book "Trading with DiNapoli levels" (published in 12 languages around the world) and once studied get on the forums, free to you for 60 days.
DiNapoli MACD Predictor Parameters
•Display
•P1, P2, P3: periods
•Price: Price used to calculate study values.
•Offset: Distance in bars between the current bar and the bar to use in the calculation. A positive offset uses future bars. A negative offset uses past bars.
•OB/OS: Opens sub-window with overbought and oversold parameters:
•Color = Select a color for the line.
•Weight = Choose a thickness for the indicator.
•Type = Choose fixed or dynamic.
•Fixed = uses Level as a fixed OB/OS value.
•Dynamic = uses Standard Deviation and Lookback for a dynamic OB/OS value:.
•OB: MA(@,Sim,lookback) + factor * STDDEV(@,lookback)
•OS: MA(@,Sim,lookback) - factor * STDDEV(@,lookback)
•where @ is the study
•Std Dev = Multiplier used to calculate high and low.
•Lookback = Number of bars to compare to the current bar.
•Level = Percentage of average OB/OS used to calculate predictor Ob/OS levels.
•Display = Click this check box to display the component.
•Style = Choose a line style.