It is inevitable that today's technician will encounter steps to calculating an indicator that uses standard
mathematical symbols that appear to be beyond simple arithmetic. In reality, these symbols are simply
shorthand notation for no more than basic arithmetic. The following is a guide and interpretation to
mathematical symbols commonly seen in STOCKS & COMMODITIES.
By convention, the first few lowercase letters of the Roman alphabet (a, b, c) are used to denote constant
terms or coefficients. A constant is simply a value that does not change. For example, if a formula states
that a = 1.5, then whenever you see the a in the formula you know that you can substitute 1.5. A
coefficient is a factor in a product. If you see bx in a formula, then you know that the variable x is
multiplied by the coefficient b. Variables are typically denoted by the last few letters of the Roman
alphabet (x, y and z). A variable can be any observed value such as today's closing price of the stock
market. Statistics will use capital letters of the alphabet (X, Y and Z) as variables.
A subscript is used with the variable to define a list of differing values from the same set of values. A set
of values could be the last month's daily closing prices of a stock. The daily closing price of a stock could
be assigned the variables x1, x2, x3, x4, x5 ... xi for each individual day. The notation for the subscript
value is identified by the letter i. Sometimes, a formula will instruct to use a specific quantity of observed
values — for example, the last five days' closing prices . The notation for the number of variables is the
letter n. In the previous example, therefore, n = 5.