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You might want to get hold of John Bollinger's new book: "Bollinger on
Bollinger Bands." It is an excellent read, and has a whole chapter on how to
normalize indicators. The gist of the chapter is that it is difficult to use
most "absolute" indicators since their interpretation depends on the range
of dates or values you choose to examine. His approach lets you normalize
almost any "absolute" indicator by wrapping it within its own set of
Bollinger Bands (i.e., bands that are X standard deviations away from a
moving average of the indicator), and then creating a relative indicator
showing where the latest value is within the bands. Typically, 1.00
represents the upper band, and 0.0 represents the lower band. This technique
is inherently self-adaptive.
CRE
----- Original Message -----
From: "Ross S Bond" <ross.bond@xxxxxxxxxxxxx>
To: "OmegaList" <omega-list@xxxxxxxxxx>
Sent: Saturday, June 08, 2002 8:56 PM
Subject: Normalize an indicator?
> Hello OmegaList,
>
> My math is more than rusty - can someone please tell me how to
> normalize an indicator so that it's values fall in a range of
> 0 - 100? TIA!
>
> --
> Best regards,
> Ross mail to: ross.bond@xxxxxxxxxxxxx
>
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