Using an Inverted, Smoothed Phase Change Index as a Color Signal

Summary

This note describes a modified phase change index attributed to P. H. Pee. The version is inverted relative to the original: where the original indicates values associated with a phase change and the opposite of the trend, this variant reverses that presentation. It also adds an option to smooth the indicator values, which the author suggests may be useful for the original design as well.

The proposed use is to treat changes in the indicator’s color as signals. The document does not define the calculation, specify signal timing, or report tests, market context, or performance. Traders would need to inspect the indicator implementation and evaluate whether its color changes provide useful information in their chosen instruments and timeframes.

Key ideas

• The modified index reverses the original indicator’s presentation.
• An optional smoothing feature is available.
• Color changes are proposed as trading signals.
• The note supplies no calculation details or performance evidence.

Tags

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