Relative Strength Sentiment Index (AR)
factor.formula
AR(N) = (∑(HIGH - OPEN, N) / ∑(OPEN - LOW, N)) * 100
in:
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The lookback period parameter indicates the number of historical trading days used to calculate the AR indicator. Usually, the default value is 20, but it may also be adjusted according to different markets or trading strategies. The larger the N value, the less sensitive the AR indicator is to short-term market fluctuations, and vice versa.
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The sum function accumulates the values of X in the past N trading days. Specifically, it will count N trading days forward from the current trading day and calculate the sum of the X values of these trading days.
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The highest price of the day refers to the highest trading price reached during a specific trading day.
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The opening price of the day refers to the trading price at the beginning of a specific trading day.
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The lowest price of the day refers to the lowest trading price reached during a specific trading day.
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The highest price on the i-th trading day
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Opening price on the i-th trading day
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The lowest price on the i-th trading day
factor.explanation
The calculation principle of the relative strength sentiment index (AR) is to measure the ratio between the sum of the upward fluctuations of the stock price (the highest price of the day minus the opening price) and the sum of the downward fluctuations of the stock price (the opening price minus the lowest price of the day) in a specific period, and then multiply it by 100 for standardization. This ratio reflects the relative strength of the buyer (long side) and seller (short side) in the market. When the AR value is high, it means that the buyer's power is relatively strong and the market may be overbought; conversely, when the AR value is low, it means that the seller's power is relatively strong and the market may be oversold. This indicator is mainly used to assist in judging market sentiment and possible reversal opportunities, and is not an absolute buy or sell signal. It should be noted that the AR indicator should be used in conjunction with other technical indicators and fundamental analysis to improve the accuracy of decision-making.