Support Board
Date/Time: Wed, 27 Nov 2024 09:39:54 +0000
Disparity Index
View Count: 459
| [2023-09-08 03:35:23] |
| User347452 - Posts: 2 |
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Can we please have this indicator called "Disparity Index" in our Sierra Chart? From the web: What Is Disparity Index? The disparity index is a technical indicator that measures the relative position of an asset's most recent closing price to a selected moving average and reports the value as a percentage. KEY TAKEAWAYS The disparity index is a momentum indicator used by technical analysts that indicates the direction an asset is moving relative to a moving average. Large moves in either direction for the index may foreshadow that a price correction is ahead. Akin to Rate of Change (ROC) and other similar indicators, the disparity index is best used in conjunction with other tools. Understanding Disparity Index The introduction of the disparity index—at least to European and American traders—is attributed to Steve Nison, who discussed it in his book Beyond Candlesticks: New Japanese Charting Techniques Revealed (John Wiley & Sons, 1994). "A widely used Japanese tool is the disparity index," he wrote. 1 Steve Nison said the disparity index is "similar to Western dual moving averages, but this technique allows for better market timing.” 1 As a formula, the equation for the disparity index would be expressed as: Disparity Index = ( Current Market Price − � -PMAV) � -PMAV × 1 0 0 where: � -PMAV = � -Period moving average value Disparity Index = n-PMAV × 100 (Current Market Price − n-PMAV) where: n-PMAV=n-Period moving average value A value greater than zero—a positive percentage—shows that the price is rising, suggesting that the asset is gaining upward momentum. Conversely, a value less than zero—a negative percentage—can be interpreted as a sign that selling pressure is increasing, forcing the price to drop. A value of zero means that the asset’s current price is exactly consistent with its moving average. Similar to the Rate of Change (ROC) indicator (another momentum indicator), the disparity index generates important signals when it crosses over the zero line because it is an early signal of an imminent rapid change in the trend, and therefore the price. Extreme values in either direction may indicate that a price correction is about to occur. |
Attachment Deleted.  Disparity Index.jpg / V - Attached On 2023-09-08 03:31:23 UTC - Size: 458 KB - 111 views |
| [2023-09-08 14:45:10] |
| John - SC Support - Posts: 36309 |
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This does not require a special study to implement, it's just simple arithmetic, so it can be done with the Arithmetic Studies or the Spreadsheet Formula or Spreadsheet Study (just depending on which you prefer to use). The only trick is what asset is being compared (what is the Moving Average of)? From what we see, it looks like it's itself, which would make the formula for a Spreadsheet Formula (for example) the following: =(L - ID1.SG1) / (ID1.SG1 * 100) Where ID1 is the Moving Average study. For the most reliable, advanced, and zero cost futures order routing, use the Teton service: Sierra Chart Teton Futures Order Routing |
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