average EMA penetration

smborowicz · 2021-01-27T17:08:30+00:00

Hello, I am currently reading Alexander Elder’s “The new Trading For A Living” book and he describes setting a BUY target at an “average EMA penetration.” I am looking for an indicator that can give me the following value: on a daily chart, if EMA value is in an uptrend, looking back at last 40 bars: calculate an average penetration : if closing price is lower than EMA, then subtract the closing price from the EMA (average this number for the last 40 bars) estimate the EMA of tomorrow: EMA tomorrow = EMA of today + (EMA of today – EMA of yesterday) Calculate an entry point: EntryPoint = EMA tomorrow – average penetration return Entry Is it possible to program this as an indicator?

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01/27/2021 at 6:08 PM #159598 quote

smborowicz
Participant

New

Hello,

I am currently reading Alexander Elder’s “The new Trading For A Living” book and he describes setting a BUY target at an “average EMA penetration.” I am looking for an indicator that can give me the following value:

on a daily chart, if EMA value is in an uptrend, looking back at last 40 bars:

calculate an average penetration :

if closing price is lower than EMA, then subtract the closing price from the EMA (average this number for the last 40 bars)

estimate the EMA of tomorrow:

EMA tomorrow = EMA of today + (EMA of today – EMA of yesterday)

Calculate an entry point:

EntryPoint = EMA tomorrow – average penetration

return Entry

Is it possible to program this as an indicator?

01/27/2021 at 7:39 PM #159604 quote
robertogozzi
Moderator

Legend
There you go:
```
MyEma  = Average[20,1](close)
IF (MyEma > MyEma[5]) THEN
   IF close < MyEma THEN
      Diff        = (MyEma - close)
      Penetration = average[40,0](Diff)
      FutureEma   = MyEma + (MyEma - MyEma[1])
      Entry       = FutureEma - Penetration
   ENDIF
ENDIF
RETURN Entry AS "Entry"
```
I considered EMA being on an UPtrend when it’s higher than 5 bars ago, but you can change it as it best suits you.

smborowicz and willi thanked this post
01/27/2021 at 8:28 PM #159609 quote

Vonasi
Moderator

Master

This might be of interest to you:

Average Penetration Indicator

smborowicz and willi thanked this post

01/27/2021 at 8:47 PM #159611 quote

smborowicz
Participant

New

Many thanks you to you both this is perfect!
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