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Strategies & Market Trends : Technical Analysis- Indicators & Systems

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To: Harold Lanier who wrote (391)2/17/1997 11:48:00 PM
From: GW Riedeman   of 3325
 
Harold/Sam....You can use logs instead of dividing by the mov to normalize the calculation. WOW will handle logs for a number of applications

I agree fully that normalizing is essential to remove price magnitude effects.

Also, BBs don't have to be just 1 StD from the average. They can be anything (within reason). 1 StD BB will enclose about 68% of the data values, 2 StD will enclose about 95.5%, 3 StD will enclose about 99.7%. WOW will take fractional values of the StD, e.g., 1.5.

Hope this helps a little.

Bill.
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