Alexander's filter ALF Formula

Alexander's filter ALF Formula

More should be included for completeness at this point, the indicator Alexander's filter. This is not to say that this indicator would be worthless (quite the contrary), but he does not really new approaches compared to the known momentum indicators, yes even delivers an absolutely visually identical image as Momentum and Rate of Change. The optical line and thus substitutability is not influenced by the fact that the total momentum will be held at Alexander's relative as filtering, rate of change use.

These three approaches have in common indicator to measure the rate changes in relation to today's closing price. Instead of the simple difference between the current closing price and the same period as the momentum is at the rate of chance, and when Alexander's filter formed a quotient. It was expressly pointed out again that the formula technically quite different-looking approaches visually exactly (!) Lead to the result.


The formula is fairly simple and technical investigation to understand: First, the ratio of current price and price of the comparable period is formed, the result subtracted from 1 and then multiplied by 100. What is the comparable period in regards to the analysts much room left, are common approaches 10-50 trading days. The corresponding formula is as follows:

ALF = (1 - (Close (t) / Close (t-s))) * 100

What are the interpretation regards to lead in the representation of the many momentum indicators presented application concepts. As representatives, mention was the ever popular search for divergences between indicator and price action. The indicator is a measure of the force behind a movement, therefore increasing values ​​indicate an increase of this force, falling a decrease or an increase of the strength of an incipient backlash.