V.6:2 (77-78): Taming the indicators by Arthur A. Merrill

V.6:2 (77-78): Taming the indicators by Arthur A. Merrill
Item# \V06\C02\TAMING.PDF
Availability: In Stock

Product Description

Taming the indicators by Arthur A. Merrill

An indicator is often difficult to read because of its wild fluctuations. It may appear optimistic and then dive into bearish territory. Then it might reverse again and turn bullish. Frustrating!

A wild indicator is usually tamed by a moving average or an exponential average. These techniques "smooth" the data for us.

The most common smoothing method is a simple moving average. This method is easily described by an example: a five-week average is the average of the last five weekly data points. In the following week, a new average is calculated by deleting the first week's value and adding the new data point.

The degree of smoothing is determined by the length of the moving average. A five-week moving average has a moderate smoothing effect (Figure 1); a 52-week moving average is very sedate (Figure 2).

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order