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From: xxxx
This looks pretty interesting. However I am not familiar with the term
"XBAR" - what
is it?
Pete
Pete I am going to post my response to the forum as others may have similar
questions,
"XBAR" is a matematical term used to indicate we are referiring to some
average value of x.
XBAR indicator consists of 4 plots.
1) MyPrice2 = (OPEN+ High + Low + Close) / 4
2) AVGMyPrice2(LENGTH1)
3) AVGMyPrice2(LENGTH1) +Constant*(AvgTrueRange(LENGTH))
4) AVGMyPrice2(LENGTH1) -Constant*(AvgTrueRange(LENGTH))
Since all the plots are based on average values of price, I call it an x-bar
indicator.
Pick up any good book on statistical process control and you will get
tremendous insight as to the construction and the use of Statistics on
processes that produce measurable values through time. As a side note you will
find the constant used in the calculation in there.
It will also explain why the work of John Bollinger is close but really not
correct since the time component in his calculations is not taken into
consideration.
For those of you who have a difficult time with math, try looking for a book
called
"Understanding Chaos" by ..... (name escapes me) .
Don't think you will look at price charts the same after absorbing the
referred literature .
All the best,
Terry Quinn
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