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MarkF2 wrote:
> Fred- If you want simplistic, I'll give you simple and simpler :-)
>
> 1. Simple. Apply Eckhardt's c-Test for dimensional coherency:
> "In essence, the c-test transforms relevant formulas in an indicator
> or system by multiplying every price term by a positive constant c (c
> not equal to 1), while leaving nonprice terms the same. If the
> transformed indicator or system gives the same indications or signals
> as the original, then it has passed the c-test. If not, the
> formulation in question is incoherent and depends unacceptably on the
> units chosen."
Mark,
put in mathematical terms it means that the indicator is a linear function of Price.
I = f(P) [I is the indicator]
if f is linear
f(a*P) = a*f(P) = a*I
It means that the derived indicator a*I mimics in an amplified way the indicator
I but does not modify its behaviour. It would be different for non linear relations.
--
Franco Gornati <fgornati@xxxxxxxxxxx>
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