Range-Weighted Moving Average Using Bar High-Low Ranges
Summary
The document describes a weighted price average in which each bar receives weight according to its high minus low range. It places this method within a general weighted-average framework: price observations are multiplied by weights and divided by the sum of those weights. Familiar alternatives use equal weights, position in the lookback window, or trading volume.
Giving greater influence to wide-range bars is intended to make the indicator respond more quickly to price changes during volatile periods than a simple moving average. The suggested use is to treat changes in the indicator’s color as signals. No precise settings, trading rules, market examples, or performance evidence are supplied, so the claimed responsiveness should not be taken as proof of predictive value. The description also leaves unspecified how zero ranges, lookback length, or signal confirmation are handled.
Key ideas
- The indicator weights prices by each bar’s high-low range.
- The weighted-average framework divides the sum of weighted prices by the sum of weights.
- Wide-range bars receive more influence and are intended to speed the indicator’s response.
- Color changes are proposed as signals, but no validation or implementation details are provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.