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I don't say much but do enjoy the list and the ideas presented. I haven't played
with the ROC like that but have tried this.
Input: AvgLen(13),ROCLen(21);
Plot1(RateOfChange(XAverage(C, AvgLen)[2], ROCLen),"S ROC");
It seems to require short AvgLengths but theoretically plots the rate of change
of the moving avg.. two bars back, and a divergence in price from the Roc(Avg)
seems to be a warning of a pivot.
____________________Reply Separator____________________
Subject: New version of ROC?
Author: owner-realtraders@xxxxxxxxxxxxxx
Date: 4/29/98 5:44 PM
Just wondering if anyone has seen this idea before:
Rate of Change and Momentum indicators have been around for years. A
significant problem has been their often bumpy movement due to changes
in price N days ago rather than the change in price from yesterday to
today. In other words, Momentum is
PRICE today - PRICE N days ago
As the indicator moves forward in time, Momentum can make big moves
that are caused by a new value for PRICE N days ago.
Most technical analysts know that a simple moving average has a time
lag approximately equal to ½ its time length, i.e., a 12 day SMA has
approx. 6 days time lag. Doesn't it make sense to use the value for a
simple moving average N/2 days ago in the Momentum formula, rather
than the single price n days ago?
PRICE today - N day SMA from n/2 days ago
should partially alleviate the bumpy movement in ROC or Momentum.
Obviously, this isn't a big idea. It's just that I've never seen it.
Has anyone seen or tried this version?
Just wondering.
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