SBV Histogram is an advanced version of the SBV Oscillator. This indicator uses
principles of the MACD calculation by applying an exponential
moving average to
the SBV Oscillator and calculating the difference between the SBV Oscillator and
its signal line. Like the MACD, the SBV Histogram is constructed by three
elements:
Blue Line - SBV Oscillator
Red Line - EMA (also called the Signal Line) applied to the SBV
Oscillator
Histogram - Difference between the SBV Oscillator and its Signal
Line (EMA applied to the SBV Oscillator) - sound and email alert
could be set to Histogram
The difference between the SBV Oscillator and the SBV Histogram is that the SBV
Oscillator uses a horizontal signal line and, as a rule, signals are generated
when the SBV Oscillator crosses a certain signal level (20% for instance). In
the case of the SBV Histogram, the signal line is an
exponential moving average
that generates a signal when the SBV Oscillator intersects the signal line (when
the Histogram = 0). The SBV Histogram allows a signal to be generated at a
certain distance from the SBV Oscillator's tops and bottoms, which may be
similar to the trailing signal.
If you compare signals generated by the SBV Oscillator and the
SBV Histogram,
you will see that, in the event of large bullish or bearish volume accumulations
(when the SBV moves far below minus 20% or far above 20%), the SBV Histogram
allows signals to be generated faster. When the SBV Oscillator moves closer to
the center, the SBV Oscillator and the Histogram generate signals at about the
same time.
As was previously mentioned, like the MACD, the SBV Histogram signals may be
generated when the histogram crosses the center line (zero line). Some traders
may prefer to use the SBV Histogram instead of the SBV Oscillator, some may
continue to use the SBV Oscillator and some may combine the SBV Oscillator and
the SBV Histogram in their analyses. On the one hand, the SBV Oscillator
provides good visual evaluation of bullish and bearish volume accumulations
(green and red SBV areas) and generates more conservative signals. On the other
hand, the SBV Histogram allows one to react more quickly to changes in money
flow and mood.
V. K.
Copyright 2004 - 2010 Highlight Investments Group. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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