{"id":1923701,"date":"2014-02-20T14:55:16","date_gmt":"2014-02-20T09:25:16","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=1923701"},"modified":"2014-02-20T14:55:16","modified_gmt":"2014-02-20T09:25:16","slug":"stochastic-macd-model-trading-nifty-stocks","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2014\/02\/20\/stochastic-macd-model-trading-nifty-stocks\/","title":{"rendered":"A Stochastic-MACD Model for Trading Nifty Stocks"},"content":{"rendered":"

Glenda Dowie has an interesting post up on investopedia<\/a>:<\/p>\n

Looking for two popular indicators that work well together resulted in this pairing of the stochastic oscillator<\/a> and the moving average convergence divergence (MACD<\/a>). This team works because the stochastic<\/a> is comparing a stock’s closing price to its price range over a certain period of time, while the MACD is the formation of two moving averages<\/a> diverging from and converging with each other. This dynamic combination is highly effective if used to its fullest potential.<\/p><\/blockquote>\n

To derive a buy signal out of these two indicators, first make sure that the MACD is trading over its signal line and then make sure that the %K crossed the %D in the last couple of days.<\/p>\n

The problem with any multi-signal approach is that it requires you to track multiple stocks:<\/p>\n

Because the stock generally takes a longer time to line up in the best buying position, the actual trading of the stock occurs less frequently, so you may need a larger basket of stocks to watch.<\/p><\/blockquote>\n

This is where you can use the StockViz API to make life simpler.<\/p>\n

The StockViz Technical API for Equities (doc<\/a>) gives you more that 50 technical stats to play with. The stochastic fields are “STOCH_FAST_D”<\/small> and “STOCH_FAST_K”<\/small> and the MACD fields are “MACD”<\/small> and “MACD_SIGNAL.”<\/small><\/p>\n

Here’s how it works.<\/p>\n

Pseudocode<\/h3>\n

In order to scan all the Nifty 50 stocks:<\/p>\n

    \n
  1. grab all the constituents of the index through the SymbolsOfIndex<\/a> endpoint<\/li>\n
  2. iterate through them and get the technicals<\/a><\/li>\n
  3. check if the MACD is over the signal line. If it is, then check if the stochastic cross-over occurred over the last couple of days<\/li>\n
  4. If both the conditions are met, then place the trade<\/a><\/li>\n<\/ol>\n

    Code<\/h3>\n

    You can find the code on GitHub<\/a>. We have extracted some shared code out into a “common” module. The main file reads much cleaner this way.<\/p>\n

    The code should be run at the beginning of the day and you can track the progress of this system through your StockViz account.<\/p>\n

    Stocks picked up today<\/h3>\n

    \"stochastic-macd<\/a><\/p>\n

    Note:<\/strong>\u00a0You have to link your Mashape and StockViz accounts for the Accounts API to work (doc<\/a>.)<\/p>\n

    Previously<\/h6>\n