Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Complete where it say #TODO Q4: The MACD Indicator The Moving Average Convergence Diverge(MACD) Indicator is a trend-folowing momentum indicator that shows the relatanship between

Complete where it say #TODO image text in transcribed
image text in transcribed
Q4: The MACD Indicator The Moving Average Convergence Diverge(MACD) Indicator is a trend-folowing momentum indicator that shows the relatanship between two moing averagea ot a stocks pnce To calculate he MACD of a slock, we first have lo understand a new kind of meving average, called he Exponena soving Average (EMA) What we did in Qu ust on 3 known as an Simple Moving Average (SMA)-all points are given equal weght An EMA cn the other hand. plaus a greater weight, and herefore significance, on te most recent data points. The benefit cf the EMA over the SMA is tha: the EMA reacts faster to recent price changes. Le's take a look at how the ENA works. e can express the EMA using the following LCCDE: Where in] is the EMA at day , and xn is the stock price at day . Now, whry is this an 'exponential" movirg average? It might not be obvious when we state it in this form because it is a recursive LCCDE. Let's try to write It out step by step to try to unravel the recursion Assuming thaty is zero Vn

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Beginning C# 2005 Databases

Authors: Karli Watson

1st Edition

0470044063, 978-0470044063

More Books

Students also viewed these Databases questions