Using the Arithmetic Mean to Measure Average Price Speed

Summary

The document introduces an indicator concept that treats price movement as speed: distance covered per unit of time. It then proposes averaging a set of speed observations with the arithmetic mean, calculated by summing the observations and dividing by their count.

This provides a basic statistical description of how a price-speed indicator might aggregate measurements. However, the material is incomplete: it does not specify how price distance or elapsed time is measured, what sampling interval is used, how many observations enter the average, or how the resulting value should inform a trade. It supplies no chart examples, empirical tests, or evidence that the indicator predicts returns. Traders would need those details before the concept could be reproduced or evaluated.

Key ideas

• Price speed is framed as price distance traveled per unit of time.
• The proposed average speed is the arithmetic mean of individual speed observations.
• The document does not define the sampling interval or price-distance calculation.
• No trading rules or evidence of predictive performance are provided.

Tags

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