Basic method to see more detail about your Technical Analysis indicator

1. Microscopic Technical Analysis
MM Dandytra, CSA, CFTe

2. English Is Not My Mother Tongue
CFTe Lv.2 Exam

3. Technical Analysis
John J. Murphy
• “Technical Analysis of the Financial Markets”
• The study of market action through the use of chats for the
purpose of forecasting future price trends
Martin J. Pring
• “Technical Analysis Explained”
• The art to identify a trend reversal at a relatively early stage
and ride on that trend until the weight of the evidence shows
or proves that the trend has reversed
John D. Magee and Roberts D. Edwards
• “Technical Analysis of Stocks Trends”
• The science of recording in graphic form the actual history
of trading and then deducing from that pictured history the
probable future trend

4. Beginning

5. Who is He ?

6. One of His Important Book is ...

7. Familiar with this ?
MOVING
AVERAGE
CONVERGENCE
DIVERGENCE

8. MACD (Moving Average Convergence Divergence)
 MACD Line
 Difference between EMA12 and EMA26
 EMA12 – EMA26
 Signal Line (Trigger Line)
 Smoothing the difference with EMA9
 EMA(EMA12 – EMA26), 9 period
 MACD Histogram
 Difference between MACD Line and Signal Line
 MACD Line – Signal Line

9. MACD in JCI

10. MACD Line shows the detail differences between
two lines (indicators)
 MACD Line shows the
“Detail Movement”
between EMA12 (Short
MA) and EMA 26 (Long
MA)
 Is Short MA getting
farther to Long MA or it is
getting closer
 When does Short MA is
about to Cross Long MA
from Below or Above

11. Signal Line shows the relative direction of MACD
Line
 Signal Line informs us
the direction of MACD
Line by looking the line
from 9 periods ago
(Smoothing)
 If MACD Line is above
Signal Line, then MACD
Line is Rising and vice
versa
 Signal Line is a “Base”
to tell the relative
direction of MACD Line

12. MACD Histogram shows the more detail
differences between two lines (indicators)
 MACD Histogram
represents detail
differences between
MACD Line and Signal
Line
 MACD Histogram also
informs us when MACD
Line and Signal is about
to Cross to each other
 When MACD Line is
about to change its
Direction

13. More About MACD

14. Divergence

15. Detail Differences of Two Lines

16. Momentum #1

17. Momentum #2

18. The Root of Microscopic Technical Analysis

19. Slope

20. Which one has the strongest Uptrend and
Downtrend
Uptrend #1 – WIKA Downtrend #1 – ADRO
Uptrend #2 – WSKT Downtrend #2 – BUMI

21. When MA Rise, Price Momentum is Up and
When MA Fall, Price Momentum is Down

22. How To
Determine The
Single MA
Direction ?

23. First ...
 How do you tell a Rise or Fall ?
 By comparing Current Data with Previous Data
 If Current Data is Above Previous Data
 A Rise
 If Current Data is Below Previous Data
 A Fall
 Remember principles of :
 Black and White Candlestick
 Solid and Hollow Candlestick
 Short and Long MA
 Price and MA
 Chinkou Span of Ichimoku Kinko Hyo

24. Previous Data Line
 Current Data versus Yesterday’s Current Data
 Current Data versus 2 Previous Days
 Current Data versus 3 Previous Days
 ...
 Current Data versus 26 Previous Days (Chikou Span’s
Priciple)

25. AKRA + MA20 + Yesteday’s MA20

26. Why not Averaging with Moving Average (or
Smoothing) ?
 Previous Data Line is a different approach
 Easier to be “Understood” by common people
 Should be logically accepted
 As well as Averaging or Smoothing
 Still, Smoothing is also acceptable and can be apply
the same way with Previous Data Line
 However, in this presentation, Previous Data Line is the
only method used

27. Kairi*
.
*Bloomberg Version

28. JCI with SMA200

29. As a Matter of Fact ...

30. Re-Check More Detail ...

31. ... Then ...

32. You Should (Could) See
The Weakening of a
Trend by Measuring The
Distance between Price
and Moving Average

33. Kairi or “a Distance”
X ~X

34. Microscopic Technical Analysis Methods

35. Microscopic Technical Analysis
 MACD Concept
 MACD Line
 Signal Line
 Histogram
 Slope
 Kairi
 Bollinger Band Complete Method
 Percentage of Bollinger Band
 Bandwidth

36. Overall Microscopic Technical Analysis

37. The Modified Indicators (My Style)
 MACD Line
 Difference MA60 – MA200
 Signal Line and Histogram
 Histogram Difference MA60 – MA200
 Slope
 Slope of MA200
 Kairi
 Distance Close to MA200

38. Difference MA60 – MA200

39. Difference MA60 – MA200
 Why MA60 and MA200
 MA60 : 3 Months Average or Quarterly Average or
Quarter on Quarter (QoQ)
 MA200 : A Year Average or Yearly Average or Year on
Year (YoY)
 The Formula
 Main Line : MA60 – MA200

40. Copying MACD Line Style (With Signal Line)
 MACD Signal Line :
 Smoothing or Averaging The MACD Line with 9 periods of
average (9 Candles – Moving Average)
 But this time, I prefer to use Previous Data. So the
Lines are :
 Difference MA60 – MA200 Line
 The Previous Data Line of “Difference MA60 – MA200”
 The Previous Data use 3 periods ago
 1 or 2 periods are still make so much Whipsaw

41. Difference MA60-MA200 (AFL)
 _SECTION_BEGIN("Difference MA60-MA200");
 Difference = (MA(C,60))-(MA(C,200));
 Previous = Ref(Difference,-3);
 Plot(Difference, "MACD 60-200", colorBlack,
styleLine);
 Plot(Previous, "MACD 60-200 Line", colorBlack,
styleDashed);
 Plot(0, "Nol", colorBlack, styleDashed|
styleNoLabel);
 _N(Title = StrFormat("- Difference MA60-MA200 -"));
 _SECTION_END();

42. JCI with Difference MA60 – MA200 (and Signal
Line)

43. Histogram Difference MA60 – MA200

44. Is That Bullish / Golden Crossover ?

45. See More Detail with Histogram

46. Histogram
 Difference between MACD Line and Signal Line
 Formula : MACD Line – Signal Line
 Histogram in the previous slide :
 Difference between “Difference MA60 – MA200” and
Previous Data Line of “Difference MA60 – MA200”

47. Histogram MA60-MA200 (AFL)
 _SECTION_BEGIN("Difference MA60-MA200");
 Difference = (MA(C,60))-(MA(C,200));
 Previous = Ref(Difference,-3);
 Histogram = Difference - Previous;
 Plot(Histogram, "Hist. MACD 60-200", colorBlack,
styleHistogram);
 Plot(0, "Nol", colorBlack, styleDashed|
styleNoLabel);
 _N(Title = StrFormat("- Histogram Difference MA60-
MA200 -"));
 _SECTION_END();

48. Slope of MA200

49. AKRA + MA20 + Yesteday’s MA20

50. Slope and Previous Data Line (AFL)
 _SECTION_BEGIN("Slope and Previous Data
Line");
 MovAvg = MA(C,20);
 Previous = Ref(MovAvg,-1);
 Plot(MovAvg,"MA20", colorBlack, styleLine);
 Plot(Previous,"Previous", colorBlack, styleDashed);
 _SECTION_END();

51. Can Histogram Be Applied ? Can …
 _SECTION_BEGIN("Histogram Slope and Previous
Data Line");
 MovAvg = MA(C,20);
 Previous = Ref(MovAvg,-1);
 Histogram = MovAvg - Previous;
 Plot(Histogram, "Histogram", colorBlack,
styleHistogram);
 Plot(0,“Nol", colorBlack, styleDashed);
 _N(Title = StrFormat("- Histogram Slope and
Previous Data Line -"));
 _SECTION_END();

52. With Histogram …

53. … Or with Line …

54. Slope and Previous Data Line with “Line”
 _SECTION_BEGIN("Histogram Slope and Previous
Data Line");
 MovAvg = MA(C,20);
 Previous = Ref(MovAvg,-1);
 Histogram = MovAvg - Previous;
 Plot(Histogram, "Histogram", colorBlack, styleLine);
 Plot(0,“Nol", colorBlack, styleDashed);
 _N(Title = StrFormat("- Histogram Slope and
Previous Data Line -"));
 _SECTION_END();

55. Distance Close to MA200

56. Stocks Above MA200 (Kairi MA200 = Positive)

57. Stocks Below MA200 (Kairi MA200 = Negative)

58. JCI Target with Kairi MA200

59. Distance Close to MA200 (AFL)
 _SECTION_BEGIN("Distance Close to MA200");
 MA200 = MA(C,200);
 KairiMA200 = ((C - MA200)/C)*100;
 Plot(KairiMA200 , "MACD 60-200", colorBlack,
styleLine);
 Plot(0, "Nol", colorBlack, styleDashed|
styleNoLabel);
 _N(Title = StrFormat("- Distance Close to MA200 -
"));
 _SECTION_END();

60. Further Application

61. MACD Line Concept
 Any Moving Average to another Moving Average :
 EMA 12 and EMA 26
 MA 60 and MA 200
 MA 5 and MA 8
 MA 13 and MA 21

62. MA5 and MA8

63. MA5 and MA8 (AFL)
 _SECTION_BEGIN("Difference MA5-MA8");
 MA5 = MA(C,5);
 MA8 = MA(C,8);
 Difference = MA5-MA8;
 Plot(Difference, "MA5-MA8", colorBlack, styleLine);
 Plot(0, "Nol", colorBlack, styleDashed|
styleNoLabel);
 _N(Title = StrFormat("- Difference MA5-MA8 -"));
 _SECTION_END();

64. Signal Line & Slope Concept
 Slope of Moving Average
 MA50
 MA100
 MA200
 Slope of Middle Band of :
 Bollinger Band
 Donchian Channel
 Keltner Band
 Slope of Tenkan Sen

65. Slope of Middle of Bollinger Band

66. Slope of Middle of Bollinger Band (AFL)
 _SECTION_BEGIN("Slope of Middle of Bollinger
Band");
 MidBoll = MA(C,20);
 Previous = Ref(MidBoll ,-1);
 SignalLine = MidBoll - Previous ;
 Plot(SignalLine, "Slope of Middle of Bollinger Band",
colorBlack, styleLine);
 Plot(0, "Nol", colorBlack, styleDashed|
styleNoLabel);
 _N(Title = StrFormat("- Slope of Middle of Bollinger
Band -"));
 _SECTION_END();

67. Histogram Concept (with Signal Line)
 Stochastic Oscillator + Histogram between %K and
%D
 RSI + Smoothing RSI or Previous Data Line of RSI +
Histogram between RSI and Additional Line
 Apply as well as William’s %R
 Percentage of Bollinger Band (%B)

68. Stochastic Oscillator + Histogram between %K
and %D

69. Stochastic Oscillator + Histogram between %K
and %D (AFL)
 _SECTION_BEGIN("Stochastic Oscillator %K");
 periods = Param( "Periods", 15, 1, 200, 1 );
 Ksmooth = Param( "%K avg", 3, 1, 200, 1 );
 Dsmooth = Param( "%D avg", 3, 1, 200, 1 );
 K = StochK( periods , Ksmooth);
 D = StochD( periods , Ksmooth, DSmooth );
 Plot( K, _DEFAULT_NAME(), ParamColor( "Color
%K", colorBlack ), ParamStyle("Style %K"));
 Plot( D, "Stochastic %D", ParamColor( "Color
%D", colorBlack), ParamStyle("Style
%D",styleDashed));
 Plot(80 ,"Overbought Level",colorBlack,0 |
styleNoLabel);
 Plot(20 ," Oversold Level",colorBlack,0|
styleNoLabel);
 _N(Title = StrFormat("- Stochastic Oscillator
(15,3,3) -"));
 _SECTION_END();
 _SECTION_BEGIN(“Histogram Stochastic
Oscillator %K");
 periods = Param( "Periods", 15, 1, 200, 1 );
 Ksmooth = Param( "%K avg", 3, 1, 200, 1 );
 Dsmooth = Param( "%D avg", 3, 1, 200, 1 );
 K = StochK( periods , Ksmooth);
 D = StochD( periods , Ksmooth, DSmooth );
 Histogram = K - D;
 Plot(Histogram, "Histogram", colorBlack,
styleHistogram);
 Plot(0, "Nol", colorBlack, styleDashed |
styleNoLabel);
 _N(Title = StrFormat("- Histogram of
Stochastic Oscillator (15,3,3) -"));
 _SECTION_END();

70. Kairi Concept
 Price with any Middle Bands :
 Bollinger Band
 Donchian Channel
 Keltner Band

71. Kairi of Middle of Donchian Channel

72. Kairi of Middle of Donchian Channel (AFL)
 _SECTION_BEGIN("Kairi of Middle of Donchian
Channel");
 Highest20D = HHV(H,20);
 Lowest20D = LLV(L,20);
 MidDonchian = (Highest20D + Lowest20D ) / 2 ;
 Kairi = ((C - MidDonchian )/C)*100;
 Plot(Kairi , "Kairi Mid Donchian", colorBlack, styleLine);
 Plot(0, "Nol", colorBlack, styleDashed| styleNoLabel);
 _N(Title = StrFormat("- Kairi of Middle of Donchian
Channel -"));
 _SECTION_END();

73. Any Questions ?

74. Muhamad Makky Dandytra, CSA, CFTe
Working Experiences
 Currently as Junior Investment
Manager at Mandiri Healthcare
 3 year as Technical Analyst at
Trimegah Securities, AmCapital
Indonesia and Anugerah
Securindo Indah
 1 year as Equity Sales at
Danareksa Sekuritas
Certifications
 Certified Financial
Technician (CFTe) from IFTA
 Bronwen Wood Award 2011
from IFTA
 Certified Securities Analyst
(CSA) from SASB Indonesia
 mmdandytra@gmail.com
 (+62) 813 145 45 317
Contact Information