Rank: Newbie
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Joined: 5/27/2009(UTC)
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An increment from $1 to $2 represent 100% increase
Decrease from $2 to $1 represent %50 decrease.
In absolute term there is no change $1 to $1 but the rate of change indicator would have net +50%. How to create a true rate of change indicator so that in percentage term would tally?
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Rank: Advanced Member
Groups: Registered, Registered Users
Joined: 9/23/2009(UTC)
Posts: 51
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You would have to use the golden ratio of .618.
Multiply $1 by 1.618 to get $1.618 (61.8% increase)
Multiply $1.618 by .618 to get $1.00 (61.8% decrease)
Hope this helps,
Alan
http://www.tradersclassroom.com
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Rank: Newbie
Groups: Registered, Registered Users, Subscribers
Joined: 5/27/2009(UTC)
Posts: 2
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Would you explain more about how to derive the true roc using fibonacci ratio?
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