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# Binding indicators within a range

Discussion in 'Strategy Development' started by trader#21, Aug 25, 2011.

How do I bind an indicator so that it always moves within -100 and 100? Is there a standard method, or does it depends on that indicator's actual range?

thanks!

2. ### MAESTRO

Sliding time window with the normalization by its High and Low.

Cheers,
MAESTRO

If it is not an oscillator you can't do it.

Hi Maestro! Great to hear from you.

Well, I have a set of 4 custom indicators each of which is based on a premise to measure 'trend strength' or rather where the market is headed.

Now I'm looking to standardize their scale and add up for a simple reference.

Indic1 usually takes value from -3 to +3
Indic2 usually takes value +10 to +150
and so one

Their values may fall out of range for extended & sharp movement (in the market). I would like to learn some maths for the correct way.

5. ### MAESTRO

Pick a time window with a certain length (it could be in time units of ticks). Measure the highest value of your indicator during this time window and its lowest value. Calculate the absolute value between highest and lowest points of your indicator over this time window. Divide the current value of your indicator by the abs. value of its high/low spread. Plot it using high/low scale. Increment your window every tick, bar, min or what ever you use to form your window.

Thanks... I've seen this method used most commonly, and you confirmed its the best as well. I was tempted to follow selecting constants for normalization using exponential equation (the farther the indicator moves away from mean, the smaller the multiplier fraction)

7. ### MAESTRO

Linear normalization vs non-linear is, of course, a question. It really depends on the nature of your indicator. However, i would always start with linear one as it is much easier to assess.

8. ### kut2k2

Assuming you have a bound indicator with limits max and min, the translation formula for original indicator value x is

200*(x - min)/(max - min) - 100