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cinar / indicatorts

IndicatorTS - Stock technical indicators and strategies in TypeScript for browser and server programs.
MIT License
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[Question] What determines the `period`? #419

Open valjusha opened 8 months ago

valjusha commented 8 months ago

Hi all. Thank you very much for this great solution! I have a question: How to use period arguments correctly?

I'm reading the documentation and many indicators require a period. I can’t understand what it should be like ((

For example, to calculate ATR or VWAP, what parameter should the period be? I understand they should depend on the duration of the candles, but how exactly?

cinar commented 8 months ago

Hi,

The indicators use periods to look back at price history. Like zooming in or out on a picture, the period affects how sensitive the indicator is to price movements.

Shorter periods react faster to price changes but can be jumpy due to random noise. Longer periods smooth out fluctuations but take longer to signal trends.

The best period to use really changes based on what you want to achieve.

Per a quick web search, for ATR, https://www.investopedia.com/terms/a/atr.asp suggests 14 for example. Other sources may have different suggestions. I would suggest trying a few to see which period works the best for your analysis and data to be sure.