UDP Indicator: Measuring the Share of Up and Down Candles
Summary
The UDP indicator estimates how often prices move up or down during a chosen lookback period. It classifies each observation by comparing the selected applied price with its previous value: a rise contributes to the up series, and a fall contributes to the down series. It then smooths each binary series with a simple moving average over the configured period.
The indicator has two settings: the calculation period and the applied price. The document explains the calculation but provides no empirical results, trading rules, or guidance on interpreting the readings. Equal prices contribute to neither the up nor down count under the stated comparisons, so the two percentages need not sum to 100%. It is a descriptive measure of recent directional frequency, not by itself evidence of trend strength or a profitable signal.
Key ideas
- UDP tracks the recent frequency of upward and downward price changes.
- Each observation is classified by comparing the applied price with its previous value.
- The indicator smooths the up and down binary series with simple moving averages.
- The period and applied price are configurable, and the document gives no performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.