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1993issue C091-9

Constructing a signed ten-point trend filter

A signed lookback score carries both direction and strength. A vertical-horizontal filter does not. A MACD reading checks whether thrust is fading. Keep the three outputs separate so trending is not treated as one blended number.

  • A trend-filter is a discrete signed rating: score plus one when the current close is at or above a lagged close, minus one when it is below, then sum ten comparisons so the total lies between plus ten and minus ten.
  • The specified lookback-block compares the current close with the closes from 11 through 20 sessions earlier, not with the most recent ten sessions.
  • A vertical-horizontal-filter carries neither the sign nor the direction of a trend, while the signed score carries both. MACD is kept as a separate check on fading thrust.
  • A pinned-extreme holds at plus or minus ten through a long trend. A shorter comparison span is more volatile, and a longer span is slower to respond.
Entries in this reading3 entries
Vertical Horizontal Filter3 readingsCurrent trackMACD115 readingsTrend filter137 readings

Three outputs, not one blended number

The archive presents a signed close-to-close rating beside other trend-strength constructions. The signed score is described as carrying both the direction and the strength of a run. A vertical-horizontal filter is described as carrying neither the sign nor the direction of a trend. A MACD reading is presented as a separate check on fading momentum as price enters a sideways range.

The signed rating is the trend-filter in this construction. The unsigned reading is the vertical-horizontal-filter. MACD is a moving-average-convergence-divergence oscillator used here only as a check on whether thrust is fading as price leaves a persistent run.

How the signed score is built

A signed trend rating can be formed by scoring plus one when the current close is at or above a lagged close and minus one when it is below. Ten such comparisons are then summed so the total lies between plus ten and minus ten.

One specified construction compares the current close with the closes from 11 through 20 sessions earlier, rather than with the most recent ten sessions. That set of lagged sessions is the lookback-block against which the current close is scored.

Length, companions, and response speed

Other trend-strength constructions discussed alongside this score include an average directional index, a linear-regression r-squared, and a vertical-horizontal filter. Each of those readings changes when the calculation length is changed.

A shorter comparison span is characterized as more volatile, with more frequent trend-change readings. A longer span is characterized as slower to respond.

Pinned extremes and sideways oscillation

The signed score is described as remaining at plus ten or minus ten through long trends. That state is a pinned-extreme: the rating stays at either bound for as long as a persistent run continues.

In sideways markets the same score is described as oscillating between those bounds, without staying at either extreme for long.

Signed trendscore on Intel, January–June 1993

A trader should see direction and strength in one signed reading: plus ten means the close beat every comparison 11 to 20 days back, minus ten the reverse. On Intel the score leaves plus ten in late January, sits there again through February into March, then pins at minus ten from 22 March through the mid-April break of 110. Points were read off the printed lower pane; the article gives no table.
A trader should see direction and strength in one signed reading: plus ten means the close beat every comparison 11 to 20 days back, minus ten the reverse. On Intel the score leaves plus ten in late January, sits there again through February into March, then pins at minus ten from 22 March through the mid-April break of 110. Points were read off the printed lower pane; the article gives no table.Intel (INTC) · Daily · 1993-01-01T00:00:00.000Z to 1993-06-13T00:00:00.000Z

Chande’s trendscore is the sum of ten +1/−1 close comparisons versus the window 11–20 days back, so the live reading is an even integer from −10 to +10. March 22 and April 15 are dates stated in the text; other dates are interpolated across the January–13 June 1993 window of the printed pane.

What the unsigned filter does not carry

A vertical-horizontal-filter is an unsigned trend-strength reading. It can rise or fall with persistence, but it does not carry the direction of the move.

The signed score is described as carrying both direction and strength. The two readings are not interchangeable, and the unsigned filter is not a signed trend rating under another name.

An illustrated companion path

On one illustrated series, a 28-session vertical-horizontal filter left its highs in early January near the same time as the signed score. The filter later formed a double bottom between February and early April and then rose, while the signed score flattened at minus ten somewhat earlier.

On that same illustrated series, a MACD reading peaked in early January and declined through April. The archive presents that path as a check on fading momentum as price entered a sideways range.

Optional construction variants

Construction variants include using fewer than 10 comparison days for a shorter horizon, 20 to 30 days for an intermediate horizon, and hourly observations instead of daily closes.

Optional style rules discussed include a zero-line cross, a one-to-three-session wait after a plus or minus 10 reading, a moving-average pairing, and delayed triggers when the score rises from minus ten through plus five or falls from plus ten through below 5.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
9 of 80 in the MACD track
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  2. 1989Four-span MACD lookbacks as perishable parameters
  3. 1989Weekly then daily MACD confirmation on individual stocks
  4. 1991Regime-gated MACD and stochastic rules inside a checklist
  5. 1991Constructing MACD signal lines and divergence tests
  6. 1991MACD parameter order and cycle phase lag
  7. 1992Lengthened bond MACD as an equity regime filter
  8. 1992Long-horizon MACD construction from paired exponential averages
  9. 1993Constructing a signed ten-point trend filter
  10. 1994Constructing lag-reduced double exponential averages for MACD
  11. 1994Seeding DEMA2 filters to build a MACD signal
  12. 1994Constructing MACD from lag-reduced exponential averages
  13. 1994TEMA1 from nested exponential averages, then a two-horizon MACD
  14. 1994Constructing entry and exit on a relative-strength MACD
  15. 1994Constructing a relative-strength MACD crossover spreadsheet
  16. 1995Consensus presignal filters for Relative Strength Index, MACD and the Stochastic oscillator
  17. 1997Confirm the MACD turn with price, then exit on the histogram
  18. 1997Reconstructing a stochastic oscillator, MACD, and a triple-smoothed oscillator
  19. 1997Moving-average windows before crossovers and MACD
  20. 1999Second-stage MACD on relative-strength inputs
  21. 1999Constructing MACD from exponential-average spreads for crossover and divergence
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  23. 2001Second-low confirmation with a percentage oscillator and money-flow filter
  24. 2001Constructing MACD from exponential average spreads and a signal line
  25. 2002Separate bounded and trend-following oscillator rules
  26. 2002Sort the regime before assigning MACD and stochastic jobs
  27. 2002Building classic divergence filters from RSI and MACD
  28. 2002Weekly highs and lows as trend gates
  29. 2002Constructing channel-normalized Fisher reversal signals
  30. 2002Affine-price and the Fisher transform as a constructed companion to MACD
  31. 2003Regularized EMA construction with a MACD line and a thrust oscillator
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  33. 2003MACD, moving averages, and a trend filter as one timing system
  34. 2003Fractional MACD and linear-regression reversal construction
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  36. 2004Candlestick triggers filtered by MACD divergence
  37. 2004Staging energy-complex tops with trendline, breakout, and MACD
  38. 2005Selling climax holds versus fails
  39. 2006Treat a sideways Wave as permission before a breakout
  40. 2007MACD with a Stochastic oscillator for spotting trend reversals
  41. 2007Rebuilding an S&P 500 fifth-wave count after a broken target
  42. 2007Constructing MACD, RSI, and stochastic confirmation for futures
  43. 2007MACD histogram divergence needs a confirming close
  44. 2007Write the plan as a stack: ratio, boundary, then oscillators
  45. 2008MACD divergence and Stochastic oscillator confirmation on lumber futures
  46. 2008Assign confirmation, timing, and a stop before a currency pair is tested
  47. 2008Confirm the ten-bagger launch path before the MACD exit
  48. 2008Reading the offloaded evidence file
  49. 2008A Leader companion for MACD direction warnings
  50. 2008Relative strength exits with MACD averages and RSI
  51. 2008Assign one job per indicator in a three-screens rule set
  52. 2008Sequencing RSI, MACD, and average crossovers
  53. 2010Constructing the Schaff Trend Cycle from MACD and a dominant-cycle window
  54. 2010Schaff Trend Cycle as a MACD and Stochastic oscillator combination
  55. 2010Combining Relative Strength Index, the stochastic oscillator, and MACD as slope filters
  56. 2010Short-term wave and ratio clues without direction calls
  57. 2010A precise pullback entry and an unplanned profit-protection exit
  58. 2010Filtering MACD false signals with trendline breaks
  59. 2011Vendor feeds as an input variable in a MACD evaluation
  60. 2012Out-of-the-money versus in-the-money option sensitivity to implied volatility
  61. 2012MACD window tuning as hold-time control
  62. 2012Combining a moving-average crossover with MACD and support-resistance
  63. 2012Testing a published MACD entry with a histogram and signal-line agreement filter
  64. 2012Treat sample systems as a lab before live rules
  65. 2013Constructing moving averages and MACD from one price series
  66. 2013The next-bar price that forces a MACD signal-line cross
  67. 2013Constructing next-bar MACD reversal prices
  68. 2013Constructing inverted MACD reversal prices
  69. 2014Shared-filter combinations of the stochastic oscillator, MACD, and RSI
  70. 2014Square-root lookbacks for combined MACD and RSI
  71. 2015Audit open interest and trend before trusting oscillator crossovers
  72. 2016MACD without a signal line, confirmed by moving-average trend filters
  73. 2016Use RSI, MACD, and a moving average as a market-health consensus
  74. 2016MACD line versus histogram is a display problem first
  75. 2017Weekly and daily MACD on a single daily chart
  76. 2017Weekly and daily MACD as a stacked momentum filter
  77. 2017Nested weekly and daily MACD from paired EMA spreads
  78. 2018Weekly and daily PPO scale versus MACD, with bounded RSI and stochastic readings
  79. 2018Constructing a weekly and daily percentage price oscillator
  80. 2020Constructing Wyckoff tape reading with MACD, moving-average, and RSI filters
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All 115 readings tagged MACD
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