Ask Colin

Some published Coppock indicator charts vary from Insight Trader. Which is correct?

There are a number of formulas for the Coppock Indicator out there.

Firstly, there is the formula that Edwin Coppock himself developed. I have a copy of his original paper and worksheet. I have reproduced it exactly in the Coppock Indicator spreadsheets on my web site www.bwts.com.au, Data Files page. I also queried Bernard some years ago and sent him Coopock's paper. He confirmed that Insight Trader uses the original formula. I have checked as best I can that Insight trader is correct by comparing its charts with my spreadsheets.

Secondly, the Coppock Indicator was popularised in the UK by Investors Chronicle. They simplified Coppock's formula. This is well documented - see Stewart How Charts Can Make You Money. This revised formula seems to give more frequent signals than the original, but I have not done any serious work on it.

Thirdly, the Coppock indicator in its original form was calculated on the monthly close. I have seen other variations based on the average closing price for the month. I have also seen it calculated on weekly closes. I am yet to see rigorous research on these variations to know if they have validity, whereas the original formula has been well researched.

Keywords: