Measuring Price Distance from Estimated Long and Short Demand Vectors

Summary

This indicator estimates two sloping reference lines from the highest and lowest prices in a rolling lookback window. It uses the locations of those extremes within the window and the total price range to derive a vector slope. It then plots the current close’s distance from a projected line anchored at the low and a second projected line anchored at the high.

The result is an oscillator-style pair of series intended to show price relative to the estimated long-side and short-side vectors. The document provides the calculation and a brief description, but no tested signal rules, performance data, or guidance for interpreting specific values. A user comment suggests a possible reversal-detection use, but that is an individual interpretation rather than validated evidence. The lookback is configurable, and results will depend on that setting and the instrument and timeframe; the indicator alone does not define an entry, exit, or risk plan.

Key ideas

• The indicator derives a slope from the rolling price range and the positions of its highest and lowest points.
• It plots close-price distance from projected vectors anchored at the window’s low and high.
• The lookback length controls the window used for the calculation.
• The document does not establish trading rules or report evidence that the plotted distances predict reversals.

Tags

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