Real Motion: Price Deviation from a Moving Average
Summary
Real Motion expresses an equity’s closing price as a percentage deviation from a reference moving average. The calculation divides the close by the average, subtracts one, and scales the result by 100. This centers the indicator at zero when price matches the average; positive and negative readings show the percentage distance above or below it. The example uses a 200-period reference average.
The provided indicator also plots faster and slower averages of Real Motion and upper and lower bands based on the fast series’ standard deviation. These additions give context for the deviation’s smoothed direction and dispersion. The document supplies default settings and a code implementation but no backtest, signal rules, or performance evidence. Results will depend on the chosen periods and instrument, and the note does not establish that a particular reading predicts a reversal or continuation.
Key ideas
- Real Motion measures closing price’s percentage deviation from a reference moving average.
- A reading of zero means the close equals the reference average.
- Smoothed fast and slow averages are calculated from the Real Motion series.
- The example adds bands based on the fast series’ standard deviation.
- The document provides an implementation but no trading rules or performance tests.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.