Acceleration / Deceleration - AC
Such factors as acceleration and deceleration play an important role in the functioning of the market. The driving force of the market, changing its direction, slows down to zero and accelerates moving to the opposite direction; at this moment the price itself changes.Acceleration/Deceleration Technical Indicator (AC) measures acceleration and deceleration of the current driving force. This indicator will change direction before any changes in the driving force, which, in its turn, will change its direction before the price.
Acceleration/Deceleration Oscilator (AC) is designed to measure current driving force of acceleration and deceleration. This indicator is used as a signal of earlier warning as it changes direction before any changes in the driving force, which, in its turn, will change its direction before the price.
If indicator is higher than nought, then the acceleration continues the upward movement (or downward movement if it is below nought). The crossing of the nought is no regarded as a signal. To control the market and make decisions using this indicator it is necessary to watch for changes in color. It is not recommended to buy when the indicator is colored red and sell when it's green.
If you enter the market in the direction of the driving force two green columns should be higher than nought and two red columns - lower than nought, depending on the opening position. If the driving force is directed against the position to be opened three red columns over the nought line are needed for a short position and three green columns below the nought line for a long position.
Calculation
AC bar chart is the difference between the value of 5/34 of the driving force bar chart and 5-period simple moving average, taken from that bar chart.MEDIAN PRICE = (HIGH + LOW) / 2
AO = SMA(median price, 5)-SMA(median price, 34)
AC = AO-SMA(AO, 5)
Where:
HIGH - maximum price;
LOW - minimum price;
SMA - Simple Moving Average;
AO - Awesome Oscillator.
No comments:
Post a Comment