Cauchy Difference: Comparing Arithmetic and Geometric Price Means

Summary

The Cauchy difference indicator compares the arithmetic mean and geometric mean of a bar’s price. It first represents each bar with the average of its open, high, low, and close prices, then uses a configurable period for the indicator calculation. The document gives no explicit formula for how that period is applied or how the difference should be interpreted as a trading signal.

The description is limited to the indicator’s input and purpose. It provides no chart examples, performance evidence, parameter guidance, or rules for entries and exits. Traders would need to inspect the implementation and test it on relevant data before deciding whether the measure adds information beyond other price averages.

Key ideas

• The indicator compares arithmetic and geometric means of price.
• Each bar’s representative price is calculated from its open, high, low, and close.
• A configurable period controls the calculation.
• The document does not specify signal rules or present performance evidence.

Tags

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