average EMA penetration

• 01/27/2021 at 6:08 PM #159598
  smborowicz

  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?

  

  smborowicz

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

  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"

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  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.

   

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  willi, smborowicz

  

  robertogozzi

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  01/27/2021 at 8:28 PM #159609
  Vonasi

  This might be of interest to you:

  https://www.prorealcode.com/prorealtime-indicators/average-penetration-indicator/

  2 users thanked author for this post.

  willi, smborowicz

  

  Vonasi

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

  Many thanks you to you both this is perfect!

  

  smborowicz

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