EMA in alerts

A doubt about how an alert on ema on a server works: EMA (and many other indicators) in reality is influenced by all data available of the timeseries being measured - so maybe while I am watching a chart I have downloaded 4000 datapoints, but that might change, maybe I will download more, which will (slightly, OK!) influence the EMA..........

My question: if on a trading platform (like eSignal or ProRealTime or similar) I set an alert on an EMA - then how many periods will this alert "look at"? The problem I have with this is that I do not want to set up a tech alert, have it triggered, and then when I go to the chart i see it was triggered because on the server they were observing a different number of datapoints to what I was looking at in the chart.

Does that make sense and does anybody have comments? Is there a "standard practice" for how server side alerts on EMA (and others) are set up?

http://stockcharts.com/school/doku.p...oving_averages

Moving averages generally use the number of bars in the period parameter for the calculation of the MA value.

You cannot set an EMA or other MA indicator without setting the period parameter. Use the same parameters on your various platforms and you should get similar results. Any variations will depend on the values the datafeed provides, and there is usually some small variation between the data from different liquidity providers.

Hi Xaphod,

thanks for your reply - but there is a fundamental difference betwen a 20 period Simple Moving Average and a 20 period Exponential Moving Average.


In case of a 20 period SMA the calculation is done on exactly the preceding 20 candles like you say.


In the case of the 20 period EMA, however, the final value of the EMA is influenced by the ALL the data available in the timeseries, not just the last 20 datapoints - so it becomes important how much data is actually downloaded in the chart.


Now - if an EMA is set as an alert, and the alert is monitored and calculated on the server side, then there are thorny issues: how much preceding data is each EMA point calculated on on the server side and how can it be ensured that it is calculated on the same amount of data on the client side (where you are looking at the charts) when you open your platform and look for the triggered event.

Claudio,

Time to hit the math books and find out how a moving average is actually calculated. A 20 period EMA uses exactly the same data as a 20 period SMA or a 20 period weighted MA. The difference of course is in how the calculation is done.

Yes, it appears you are right, Claudio. However, the weight attached to previous bars diminishes successively and exponentially: (k-1)^n. k is often set to 2/(N+1). I do not think the 4000th bar will have any significant effect on the final value.

Mathematically, I guess one could say there is a maximum limit to the value of the EMA as the nr of bars approaches infinity. You could calculate the minimum nr of bars you need before you have reached the limit within the pairs nr of digits and see to it you have a minimum of that nr of bars on your chart.

Ref:
http://en.wikipedia.org/wiki/Moving_...moving_average

I've searched everywhere for a MA coss alert that incorporates the shift part of the MA setting - see attached.
Does anyone know of one and if so could it be posted?
Many thanks
George