Hello Abhijit,
To take it further lets say we choose a timeframe and time duration and we carry out this simple exercise.
Regards
Sanjay
To take it further lets say we choose a timeframe and time duration and we carry out this simple exercise.
- Find the maximum possible applitude extraction if the system catches all the tops and bottoms.
(One of the ways to do this is by ploting a zig-zag across the entire data set and measure the sum of lengths of all the legs of zigzag)
- We divide this sum with number of bars in our dataset (trend/bar).
- We get the average range (H-L) of all the bars (range/bar).
- We can also get trend noise ratio 2/3 for our choosen TF .
Regards
Sanjay