Power measure oscillator displays the ratio of the price change to volatility.
It has one configurable parameter:
- Period – calculation period
Calculation:
The indicator calculates the percentage difference between the current and previous Close price:
CC = 100.0*(Close - PrevClose) / PrevClose
The percentage difference between High and Low prices is calculated as well:
HL = 100.0 * (High - PrevLow) / PrevLow
Power measure is calculated as a correlation ratio between these two flows:
PM = Sum/Sqrt(SumCC2 * SumHL2)
where:
Sum = Sum((CC - SMA(CC, Period)) * (HL - SMA(HL, Period)), Period) SumCC2 = Sum((CC - SMA(CC, Period)) * (CC - SMA(CC, Period)), Period) SumHL2 = Sum((HL - SMA(HL, Period)) * (HL - SMA(HL, Period)), Period)
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