Advanced Tools Plug-in:
10x8 MAC - Moving Average Convergence
It has often been said that prices fall faster than they rise, or simply put, it is easier to ride a bike downhill than uphill. Due to this perceived quirk in pricing, the legendary market analyst, author, and seminar speaker Jake Bernstein developed the 10x8 moving average system.
This system uses two simple moving averages, but they are calculated in a slightly different manner than those traditionally used. The first moving average is a moving average of the daily highs, as opposed to that of the daily settlement like most traditional moving averages. The second moving average is calculated using the daily lows.
Though Mr. Bernstein recommends using a 10 period moving average of the daily highs and an 8 period moving average of the daily lows based on his observation that prices tend to fall about 20% faster than they rise, any combination would do the trick. Generally though, accepting market lore that prices fall faster than they rise, the moving average of the lows should be of shorter-term duration than that of the highs.
The most basic use of the 10x8 Moving Average is to look for a breakout above the upper moving average to initiate a buy signal. When the daily settlement price exceeds the average high of the last 10 days, this indicator flashes a buy signal indicating that the trend of the market should be up.
10x8 Moving Average Convergence (10x8 MAC)
The 10x8 MAC Indicator is included with the Advanced Tools Plug-in.
To View a list of all of the indicators that are included with your purchase of the Advanced Tools Plug-in Click Here
