Stochastic indexes width Hughes

Stochastic indexes width Hughes

Many forms of the indicator area of the group anticipated decline are very similar and often differ only by calculation periods or smoothing. At least a few new leads by the stochastic index width to be developed by Hughes Trevor Chande.

The concept provides for this indicator so that a continuous summation HBI (by dividing the net change in the highest values and fell by the sum of capital gains and fell) are known, then the stochastic calculus is used . The stochastic measures by the position of the index to Hughes width in the range up to the last n days. The objective is to generate trading signals and Ersichtlichmachen concrete differences and extreme conditions. The construct:

HBIcum (t) = (AdAdv (t) - AdDec (t)) / (AdAdv (t) + AdDec (t)) + HBIcum (t-1)
HHBIcum (n) = max (HBIcum (t) .... HBIcum (t-s))
LHBIcum (n) = min (HBIcum (t) .... HBIcum (t-s))
StochHBI (t) = (HBIcum (t) - HHBIcum (n)) / (HHBIcum (s) - LHBIcum (s))


As for what the real value for the stochastic averaging five days gladly accepted, of course there are other possible values. The interpretation anbetreffend apply the basic possibilities of stochastic oscillators known. With over 80 can counter values by an oversold market and are therefore taken an expected correction. Indicator values below 20 indicate oversold conditions on the other hand, we can expect a rally. However, here, other indicators should be used to support, because states can continue in these areas rather extreme even longer.

Often used as a specific trading signals are the intersections between the signal and the line of the indicator. At an intersection between the indicator and the signal line from the bottom up can be expected from a buy signal, a cutting point below the lower end of the area has increased as the most significant signal. Similarly, a sell signal to be taken if the indicator crosses the signal line from top to bottom, a strong signal can be assumed if the event occurs in the upper extreme.


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