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factor.formula

The calculation formula of the Mace index is:

Formula details:

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    High Price of the Day. It represents the highest price reached by the stock during the trading period of the day.

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    Low Price of the Day. It represents the lowest price reached by the stock during the trading period of the day.

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    The high and low price difference of the day reflects the fluctuation range of the stock price on that day.

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    The 9-day Exponential Moving Average is the difference between the high and low prices of the day. This moving average gives more weight to recent price changes and can reflect changes in price fluctuations more quickly.

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    9-day exponential moving average of the 9-day exponential moving average of the high and low spreads. This is equivalent to performing two exponential smoothing processes on the high and low spreads, further reducing noise and making the indicator smoother.

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    The past 25 periods of (EMA_9(HIGH-LOW) / EMA_9(EMA_9(HIGH-LOW))) are accumulated. Usually, the Mace index uses 25 periods, but of course the number of periods can be adjusted.

factor.explanation

The Mace Index finds potential trend reversal points by calculating the volatility of the high and low price difference of the stock price. Specifically, the calculation process is as follows: First, calculate the difference between the daily highest and lowest prices, then use the 9-day exponential moving average (EMA) to smooth the difference to obtain a smoothed high-low price difference value, and then smooth the smoothed difference by the secondary exponential moving average (EMA). Finally, divide the smoothed high-low price difference value by the secondary smoothed high-low price difference value, and accumulate the results of the past 25 cycles. When the accumulated Mace Index shows a specific pattern, such as the indicator value rises rapidly and then falls back quickly, and falls back to a lower level, it may indicate that the current trend is about to end and a new trend may be about to begin. This indicator can help investors identify stocks that may reverse after experiencing violent fluctuations. It should be noted that the Mace Index is best used in combination with other technical indicators and chart patterns to improve the accuracy of the signal, and cooperate with the volume indicator for judgment. This indicator has a strong reference value for judging the reversal of short-term trends

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