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I am trying to understand the VRI indicator
I have Wilder's book "New Concepts in Technical Analysis" and thus
understand the definition of true range.
Chucks formula (and I don't know TS language) implies we plot the the
true range until we reach "length" and then we plot the simple average
(length) of the true range
Yet Ramon Barros seems to say we plot a difference. That we plot a
momentum indicator which is usually a difference between today and some
no of periods back.
It is not clear to me whether we are plotting today's true range minus
the average of the true range over a given no of periods, today's true
range minus the true range some periods back, or the average of true
range minus the average of true range some time back ?
The first example in metastock 6.5 would be experessed as
{enter the period for the average}
periods:=input("enter no of periods",2,7,5);
{plot today's true range minus the average of the true range}
atr(1)-atr(length);
However none of these indicators seem particularly meaningful. Certainly
I can't quite see examples of it anticiating market reversals as Ramon
has suggested.
Thank you in advance for your thoughts ...
Best regards ... Martin
Phil wrote:
> A friend of mine showed me an article today out of a Fall 1992 Traders
> World Mag. The article was by R Maynard Holt and the charts showed a buy
> and sell indicator he called the Volatility/Range Index? ...
>
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