mrtools wrote: ↑
Sat May 12, 2018 3:51 pm
This is Pdf Ma with floating levels , indicator is mtf with alerts. Color choices are on slope, levels cross, or on mid level cross. Floating level choices are quantile bands, deviation bands,regular floating levels, or no levels. Also have the 33+ price options along with the filter options.
Mladen on probability density function(Pdf):::::
In short, this is a kind of weighted average (or a digital filter, depends how somebody prefers to call it) that is using probability density function to calculate the coefficients and the average. The short description of PDF is :
In probability theory, a probability density function (PDF), or density of a continuous random variable, is a function, whose value at any given sample (or point) in the sample space (the set of possible values taken by the random variable) can be interpreted as providing a relative likelihood that the value of the random variable would equal that sample. In other words, while the absolute likelihood for a continuous random variable to take on any particular value is 0 (since there are an infinite set of possible values to begin with), the value of the PDF at two different samples can be used to infer that, in any particular draw of the random variable, how much more likely it is that the random variable would equal one sample compared to the other sample.
More information here : https://en.wikipedia.org/wiki/Probabili ... y_function
many thanks to MrTools, Mladen etc for many good ideas of indicators.
This pdf ma is another excellent indicator.
However, even an excellent indicator does not help if we don't know how to use it in trading. I find this lack of information on uses of indicators widespread in this forum. Even a very simple indi such as RSI has many dozen possible uses in trading, not all traders are aware of them.
I want to use few indis in my trading, but I want to understand them well.
Some indis have many parameters, and we can't guess the meaning of many of them.
Could anybody explain how to use pdf ma?
Pdf is of a random variable, what is the random variable shown by the indi?
Is the main signal of the indi the mean value of the pdf?
Why are the levels mostly on the opposite side of the price, unlike bollinger bands where you have x standard deviation on both side?
The link to the wikipedia article is too general.