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Wednesday, Apr 23rd

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Last Updated (Sunday, 22 January 2012 19:36) Written by Carl Weiss Tuesday, 28 September 2010 22:38

MacDaddy | By Far The World's Fastest Momentum Algo

MacDaddy | My Favorite Algo

MacDaddy is an Order Flow Momentum algorithm.

MacDaddy will always offer earlier and faster signals than price momentum indicators for a few simple, timeless reasons:

For a Price Momentum indicator's output to be updated there must first be a change in Price since Momentum is a function of Price.

Hence, Momentum is categorized as a 'Lagging' indicator since it lags changes in Price.

As MacDaddy deduces changes in the momentum of Order Flow, which occur prior to changes in Price, it is categorized as a 'Leading' indicator.

...sceeto - Why MacDaddy Is Always Faster Than Any Price Momentum Indicator

 

The name MacDaddy is a spoof on MACD.  Urban Dictionary defines a MacDaddy "a term used to describe a man with an unusual power over women, and is derived from the French and later Louisiana Creole patois term "maqereau", which means "pimp". Adding "daddy" makes it mean "top pimp".

You can trade MacDaddy in a similar fashion to MACD.   For instance, you can use higher highs in MacDaddy to show increasing momentum in an uptrend, or as a divergence indicator when a market is making new highs but MacDaddy is making lower highs.

Another killer use of MacDaddy is when there is a significant downtrend and MacDaddy makes massive BUY prints.   Uptrends that begin with massive MacDaddy explosions are usually sustained and very easy to trade.

If you would like to increase your edge in today's electronic markets, consider incorporating ...sceeto, which includes MacDaddy, into your your trading.

Hope this helps.