Moving average deviation
factor.formula
BIAS:
in:
- :
The closing price of the current trading day.
- :
The Simple Moving Average with a period of N represents the arithmetic mean of the closing prices of the past N trading days.
- :
The period length used to calculate the moving average is usually a short-term period of 6, 12, 24, etc. The choice of this parameter depends on the preference of the trading strategy. Shorter periods are more sensitive and can reflect faster price fluctuations, while longer periods are smoother and suitable for observing medium- and long-term trends.
factor.explanation
The Moving Average Deviation (BIAS) quantifies the volatility of prices relative to their average level by calculating the degree of deviation of the current closing price from the moving average of a specific period. A positive BIAS value indicates that the current price is above the moving average, suggesting that the market may be overbought and there is a risk of a price correction in the short term. The larger the value, the further the price deviates from the moving average, and the higher the possibility of overbought. Conversely, a negative BIAS value indicates that the current price is below the moving average, suggesting that the market may be oversold and there is a chance of a price rebound in the short term. The smaller the value, the further the price deviates from the moving average, and the higher the possibility of oversold. This indicator has reference value in judging short-term market sentiment and identifying reversal opportunities, but it should be used in conjunction with other technical indicators to improve the accuracy of judgment.