DEMAND INDEX

Demand Index

04/02/00 02:12:33 PM

by Jason K. Hutson

Demand Index

Security: N/A
Position: N/A

The study calculates the Buying Pressure (BP) and Selling Pressure (SP) in the following manner for the
No Limit version. If the prices rise: BP = V or Volume
SP = V/P where P is the percent change in price
If the price declines: BP = V/P where P is the percent change in price If the price declines: SP = V
Because P is a decimal (i.e., less than 1), P is modified to make it greater than one by multiplying it by
the constant K. For the No Limit version K=(3*C)/Va where C is the closing price and Va is the Volatility average which is the ten-day average of a two-day
price range (highest high minus lowest low).
Also if SP> BP then DI = -BP/SP

Jason K. Hutson

Traders.com Staff Writer. Enjoys trendlines, support and resistance, moving averages, RSI, MACD, ADX, Bollinger bands, parabolic SAR, chart formations, and volume analysis.

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DEMAND INDEX

Demand Index

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