New script in FXApps: [Indicator] Rank Correlation Index Spearman (RCI)

Posted By Admin Wednesday, November 05, 2014
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New script in FXApps: [Indicator] Rank Correlation Index Spearman...

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Admin
 Posted Wednesday, November 05, 2014
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Rank Correlation Index Spearman (RCI)

http://va112.sysfx.com:8080/images/products/large/RCI_ind.png

The indicator Spearman Rank Correlation Index's (RCI) is a statistical oscillator based on the correlation model provided by the mathematician Charles Spearman.
The indicator shows statistical relations between date and price as a correlation without the relationship between the two variables is of affine type. The idea is to find correlation between the ranks of values instead of the values themselves.
  • The RCI value of 100 shows the positive correlation between the rising Price and Date.
  • On the other hand the value of -100 indicates negative correlation (the Price falls continuously while the Date continues to rise (falling dates are not possible))
Trading signals:
  • When the RСI crosses Zero line from below – it is considered a buy signal;
  • When the RСI crosses Zero line from above – it is considered a sell signal;
In some sources the signals should be confirmed when indicator reaches the oversold/overbought levels:
If RCI is higher than 80 lvl (overbought), then it’s time to sell, and if RCI is lower than -80 lvl (oversold) – it’s time to open a buy position.


Best regards

-ACTFX© Forum Administrator

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