Deviation Rate Oscillator
factor.formula
Bias Rate (BIAS):
Deviation Difference (DIF):
DBCD Oscillator:
Weighted Moving Average (SMA):
in:
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The closing price of the current period.
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The simple moving average of the closing price over the past $N_1$ periods is used to measure the trend and average level of the price.
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The length of the simple moving average period, the default is 5. This value determines the sensitivity of the moving average to price fluctuations. The larger the value, the smoother the moving average is and the less sensitive it is to price fluctuations.
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The deviation rate of the current period indicates the degree of deviation of the current closing price from its $N_1$ period simple moving average. A positive value indicates that the price is above the moving average, and a negative value indicates that the price is below the moving average.
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The cycle length for calculating the deviation difference is 16 by default. This value determines the sensitivity of DIF to BIAS changes. The larger the value, the smoother the DIF.
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The difference between the deviation rate of the current period and the deviation rate $N_2$ periods ago is used to capture the momentum change of the deviation rate and reflect the acceleration or deceleration of the deviation rate.
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The moving average period length for smoothing the deviation difference, the default is 17. This value determines the degree of smoothing of DBCD, the larger the value, the smoother the DBCD.
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The input value of the current period can be price, indicator or other time series data.
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The length of the moving average period indicates the size of the time window for calculating the average.
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Weight, when M is 1, it degenerates into a simple moving average, which is used to adjust the weight of the current value in the calculation. When $M=1$, it is equivalent to a simple moving average (SMA).
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Weighted moving average over the previous period.
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The weighted moving average for the current period.
factor.explanation
The Divergence-Convergence Oscillator (DBCD) is an improved oscillator that is based on the difference in the BIAS for smoothing. First, the BIAS is calculated between the current closing price and its N1-period simple moving average. Then, the difference in the deviation (DIF) is calculated by calculating the difference between the current BIAS and the BIAS N2 periods ago, thereby capturing the momentum change of the BIAS. Finally, the DIF is weighted moving averaged over the N3 period to obtain the final DBCD value, which makes the indicator line smoother. The DBCD indicator is designed to identify overbought and oversold conditions of prices. When the DBCD value reaches a high level, it may indicate that the price is overbought; conversely, when the DBCD value reaches a low level, it may indicate that the price is oversold. Compared with the simple BIAS indicator, DBCD effectively filters some market noise through double smoothing and can produce clearer trading signals. This indicator can be used to assist trading decisions, such as determining the timing of buying or selling. It should be noted that the DBCD indicator should be used in conjunction with other technical indicators and market analysis to improve the accuracy of trading decisions.