IdeaTrend: Comparing Moving Averages of Highs, Closes, and Lows

Summary

IdeaTrend is a trend indicator based on moving averages of high, close, and low prices over a chosen period. The user selects the moving average calculation method and a threshold that separates its upward and downward readings. The indicator displays its result as a histogram, with colors indicating the direction assigned by the threshold rule.

The document gives the calculation and explains the signal interpretation, but provides no backtest, performance data, or guidance for choosing parameters. Its formula can also become unstable when the moving average of closes is equal or close to that of lows, since this makes the denominator zero or very small. The indicator is therefore a descriptive rule for classifying price behavior, not evidence of a profitable trading strategy; traders would need to define and test any entry, exit, and risk rules separately.

Key ideas

• The indicator compares moving averages of high, close, and low prices over a selected period.
• Its output is judged against a user-defined threshold to classify the trend direction.
• The histogram uses red for the document's downward classification and green for its upward classification.
• The document provides no empirical results or parameter-selection guidance.

Tags

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