15 Feb 2019
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This ProBuilder script is designed to estimate the close price of a stock that would result in a specified Exponential Moving Average (EMA) value. The script iteratively tests potential close prices within a defined range to find the one that most closely matches the desired EMA value.
defparam drawonlastbaronly=true
once customEMA=close
once prevEMA=close
EMALength = 10
alpha = 2/(EMALength+1)
once irange = 200 //ticks
mincalc = prevEMA*100
lasttest=mincalc
if barindex>EMALength then
CustomEMA = alpha*Close + (1-alpha)*CustomEMA[1]
for i = -irange to irange do
pricetest=(Close+i*ticksize)
calc = alpha*pricetest + (1-alpha)*CustomEMA[1]
mincalc = min(mincalc,abs(calc-CustomEMA[1]))
if mincalc<=ticksize and mincalcExplanation of the Code:
- Initialization: The script starts by setting up the EMA calculation parameters, including the length of the EMA and the smoothing factor (alpha).
- Range Definition: It defines a range (irange) of potential close prices to test, centered around the current close price.
- EMA Calculation: For each potential close price within the range, the script calculates the resulting EMA.
- Comparison: It then compares each calculated EMA to the desired EMA value. The script keeps track of the closest match and updates the result if a closer match is found.
- Output: The script outputs the estimated close price that would result in the EMA value closest to the desired one. It also displays this information graphically on the chart with the DRAWTEXT function.
This script is useful for understanding how changes in the close price can affect the EMA, which is a common indicator used in technical analysis of financial markets.
Related Post
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https://www.prorealcode.com/topic/formulation-ema/page/2/#post-96079
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Nicolas
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