Good morning everyone!
A few days ago, I read again a section of John Murphy's financial markets technical analysis book, where the Demand Index indicator was mentioned.
It is an indicator based on the percentage variation of the volume according to the buying and selling pressure. acting as an oscillator.
When taking the volume as the base information, followed by the percentage variation of the price and taking into account the volatility, it makes it a fairly reliable indicator for certain analyzes, especially in the detection of depletion zones, through divergences.
It would be interesting and quite useful to have this indicator on the ATAS platform.
its formula is the following, there are variations of it but the base is the one that I show you now:
If the price Rise:
BP = V or Volume
SP = V / P where P is the percent change in price.
If the price declines:
BP = V / P where P is the percent change in price.
SP = V or Volume.
Because P is a decimal (i.e., Less than 1), P ismodified to make it greater than one by multiply it by the constant K.
For the No limit version K = (3xC) / Va
Where C is the Closing price and Va is the volatility average wich is the 10 days average of a 2 day price range (highest high minus lowest low).
Also if SP> BP then DI = -BP / SP
Atach File in PDF with more description and examples Demand Index PDF descriptions
examples of what it would look like, which could be in the form of a histogram, or areas of color above zero level and another color below level zero:
I will be pending and eager to see your answers! I hope you can add and enjoy it in your operation! As much as I want to take advantage of it in the ATAS platform and thus not resort to other platforms as I am unfortunately doing now. have a great week! Regards!!!
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