yeah it basically subtracts the price difference from the
closing price of the previous day from the opening price, and then
adjusts the equations for this in the MA's and PSAR. What
this does is to make the indicators seamless and not affected by
the gaps. If you really think about it, gaps really mess up
all indicators, sometimes it takes hrs for gaps to be worked out of
the indicators, but if you remove them, then it's a seamless
system.
Futures don't have this proplem since they trade 23 hrs a
day, however individual stocks do, and especially the ETFs and
ultra and triple ETF's, they gap huge up or down several times a
week, when that happen
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yeah it basically subtracts the
since a few of you asked, here's some examples of ...
Posted by matt on 10th of Mar 2009 at 01:43 pm
yeah it basically subtracts the price difference from the closing price of the previous day from the opening price, and then adjusts the equations for this in the MA's and PSAR. What this does is to make the indicators seamless and not affected by the gaps. If you really think about it, gaps really mess up all indicators, sometimes it takes hrs for gaps to be worked out of the indicators, but if you remove them, then it's a seamless system.
Futures don't have this proplem since they trade 23 hrs a day, however individual stocks do, and especially the ETFs and ultra and triple ETF's, they gap huge up or down several times a week, when that happen