Fred Shutsman (Fred G Schutzman) - the idea, DragoTrade - Programming.
This indicator is described in the book by Alexander Elder "How to play and win at the stock exchange." First, compute the exponential moving average closing price (EMA), then determined the rate of change (RoC).
MA_Period - period EMA, the default 13;
ROC_Period - rate changes, the default 21.
Although the author recommended the use of parameters 13/21 (for medium-and long-term trading in the stock market), it is desirable to optimize the use of short-term.
- If the forex - the indicator is below the zero line is set up from the trenches - buy.
- If Forex - an indicator, while above the zero line, is set down from the peak - to sell.
- Divergence between the oscillator and the price makes a particularly important signal, play direction indicator.