Average Sentiment Oscillator: Comparing Bar-Level and Period-Level Bullishness

Summary

The Average Sentiment Oscillator estimates bullish and bearish pressure from OHLC prices. It offers two calculations: one measures sentiment within each bar and averages those readings across a chosen period; the other treats the period’s full high-low range as a single bar. A third mode averages the two approaches. The resulting bull and bear series are presented as a momentum oscillator that may be used as a trend filter or to inform entries and exits.

The document explains the trade-off between the methods: bar-level readings retain more intra-period detail but are noisier, while period-level readings are smoother and give more weight to the overall price range. It also supplies an implementation with configurable period, calculation mode, and display of bull or bear values. The source provides no performance tests or evidence that the indicator improves trading results. Its suggested uses should therefore be treated as possibilities to evaluate, and the calculations remain dependent on the selected period and OHLC data.

Key ideas

• The indicator estimates bull and bear percentages from OHLC prices.
• Bar-level sentiment captures more intra-period detail but tends to be noisier.
• Period-level sentiment uses the full high-low range and produces a smoother reading.
• A combined mode averages the two sentiment calculations.
• The document suggests trend filtering and entry or exit signals but gives no performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.