Re: ergodic indicator - text version

[Alex Matulich <alex@xxxxxxxxxxxxxx>]

Thanks Barry, for posting the text version.

After looking at the code, it seems to be one of those things that,
like any other indicator, sometimes works and sometimes doesn't.

This is nothing more than a moving average crossover, using daily
price change rather than price as the input, smoothing it with a
steep-rolloff (and high lag) lowpass filter (EMA of an EMA of an
EMA), then smoothing that result (value1) with a normal EMA (to get
value2) and indicating when value1 is higher or lower than value2.

All it seems to tell you is that closes have been higher in the
past, or lower in the past.  As such, it's good for determining if
the market has been trending up or down.

What it has to do with ergodic dynamical systems or ergodic theory
escapes me.

Replacing the TXAverage with a T3 Average might improve it somewhat.

-Alex