as posted in Renato di Lorenzo’s book ” Come guadagnare in borsa col trading intraday”
classical formula is:
// Classical ER
numerator = customclose – customclose[n]
for i =1 to n do
asssum = abs(customclose[i] – customclose[i-1])
next
denominator = summation[n](asssum)
ER = numerator / denominator
return ER
variabile: n – default n = 17
**
// ER squared (ER^”)
// in bold character the difference
numerator = customclose – customclose[n]
for i =1 to n do
asssum = abs(customclose[i] – customclose[i-1])
next
denominator = summation[n](asssum)
ER = numerator / denominator
ER2 = ER * EXP(2) * customclose
// the addition of *customclose gives you the opportunity to compare ER with prices or any moving average.
return ER2