This indicator I came up with seems to deviate with a pattern but what the pattern is I have yet to figure out. First I constructed this indicator:
Name: HL-OC Disparity
Formula:
((OPEN+CLOSE)/2)-((HIGH+LOW)/2)
This simply calculates the difference between the range of the day from the change for the day.
Since there did seem to be a pattern, I constructed a much smoother average of the indicator:
Name: HL-OC Disparity MA11 - MA3
Formula:
Mov(
(
+Mov(Fml("HL-OC Disparity"),8,SIMPLE)
+Mov(Fml("HL-OC Disparity"),10,SIMPLE)
+Mov(Fml("HL-OC Disparity"),12,SIMPLE)
+Mov(Fml("HL-OC Disparity"),14,SIMPLE)
),
3,SIMPLE)
This is the 3-day average of several moving averages.
Backtesting the indicator I got very mixed results, but some results were outstanding. It seems to depend on the stock and the timeframe. The indicator is most similar to the CMF money flow indicator, so could probably be used in conjunction to it. Who knows, it may give the CMF at some use. |
