Just do a Google search or read the info below
Adapting Moving Averages To Market Volatility by Tushar S.
Chande, Ph.D.
If a market is active, it has volatility: that cannot be avoided. And because
the market is continuously changing, an indicator that attempts to predict
market activity must itself adapt and change. How? Tushar Chande presents a
dynamic—not static—indicators: a variable-length moving average,
which adapts to the volatility in question by exponentially smoothing data
based on standard deviation.
Technicians can be trend followers or contrarians. Trend followers use
price-based indicators, such as moving averages, while contrarians prefer
oscillators such as overbought-oversold indicators. But the market never does
quite the same thing twice, and so no indicator works all the time. The market
is dynamic, adjusting rapidly to information: a continuous tug of war between
greed and fear, fact and fiction. Technical indicators, on the other hand, are
static, mechanically applying the same formula to the relevant data. What is
needed is a combination, dynamic indicators that will automatically adapt to
the changing nature of markets, a new class of dynamic indicators that combine
exponential moving averages with other technical indicators to adapt
automatically to changing price behavior. What is needed is an exponential
moving average with a continuously variable smoothing index that adjusts
rapidly to changes in price behavior. The smoothing index can be tied to any market
variable. It is the continuous, not discrete, changes in the smoothing index
that increases the sensitivity of these moving averages to changes in price
behavior. These new dynamic exponential averages can be referred to a variable
index dynamic average (VIDYA).
From: jism1992
[mailto:gdihia@xxxxxxxxxxx]
Sent: Saturday, 22 January 2005
2:11 PM
To: amibroker@xxxxxxxxxxxxxxx
Subject: [amibroker] Re: Tushar
Chande Vidya
Can someone explain how to use this indicator? is
it
oversold/overbought indicator? Thanks
--- In amibroker@xxxxxxxxxxxxxxx, Natasha M S
<dynomitedoll_ddd@xxxx> wrote:
>
>
> Eugene <eugenecpinto@xxxx> wrote:
>
> Has anyone coded this indicator and would
like to share?
>
> Thanks
>
>
***************************************
>
>
Code for Vidya:
>
> Length=21;
> Smooth=5;
>
> Change = C - Ref( C, -1 );
> SU = Sum( C - Ref( C, -1 ) > 0, Length );
> SD = Sum( C - Ref( C, -1 ) < 0, Length );
> CMO = 100 * ( SU - SD ) / ( SU + SD );
>
> AbsCMO=( abs(CMO) )/100;
>
> SC=2/(Smooth+1);
>
> VIDYA=AMA( C, SC*AbsCMO );
>
> Plot( Close, "Price", 4, 64 );
> Plot( VIDYA, "Vidya", 5 );
>
>
> Just for your info: Vidya in our lang means
" Knowledge ".
>
>
and Tushar means "fountain"
>
> Have fun.
>
>
>
>
>
>
>
>
>
>
>
> Warm regards,
> Natasha !
>
>
>
>
>
> ---------------------------------
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