Tutorial 190 (based on tutorial 174) demonstrates how to write Markplex’s version of the Centered Moving Average (CMA) Envelope using TradeStation EasyLanguage. A centered moving average is placed at the center of the time period it is averaging rather than the end of it. This positions the moving average values at their central positions in time.
A disadvantage of the CMA is that because the values are displaced there are a number of bars at the end of the chart where there are not a sufficient number of future bars to calculate the average.
This tutorial demonstrates one approach to estimating the average for the last bars by replacing “missing” bars with the price of the last bar and then re-calculating and re-plotting the last few bars whenever the close is updated. The earliest bar of the estimate remains on the chart after a new bar develops.
When Length is an even number (i.e. there is a no bar that is in the center of the length) the plot is plotted one bar later. For example, if Length is equal to 10 and it is the last bar on the chart, the plot for the center moving average is made 4 bars ago and 4 estimated values are calculated and plotted
9 8 7 6 5 4 3 2 1 0
Where 0 is the last bar on the chart, 1 is the one before it etc. If the length were 11, the CMA is plotted around the center bar:
10 9 8 7 6 5 4 3 2 1 0
i.e. 5 bars on either side of the center bar.
Explanation of tutorial 190
The tutorial is compatible with MultiCharts.
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