Measuring Bounce Strength Around the Tango Moving Average

Summary

The Bounce Strength Indicator estimates upward reactions from lows and downward reactions from highs. Its revised calculation measures price deviation from a center line based on a moving average of the Tango Line, rather than using the width of a price range. Separate positive and negative histograms represent bounce strength in each direction. A signal line combines their difference with a scaling term based on their relative magnitude.

The display also includes averaged signal values intended to show upward and downward trend strength, plus a slower average line. Configurable inputs cover the calculation range, smoothing, averaging, tick-volume weighting, and a reversal noise filter. The document explains the indicator’s construction and visual components, but supplies no chart, trading rules, test results, or evidence that the indicator predicts returns. It is therefore a description of an indicator design, not a validated strategy; users would need to assess its behavior and settings on their own data.

Key ideas

• The indicator measures bounce size relative to a center line derived from the Tango Line moving average.
• Separate histograms represent upward reactions from lows and downward reactions from highs.
• The signal line scales the difference between the positive and negative components by their relative magnitude.
• Averaged signal values and a slower average are intended to represent trend strength.
• The document gives no trading rules or performance validation.

Tags

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