Percent Difference from Moving Average [%Diff_MA]

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The Percent Difference from Moving Average function calculates the percent difference between a value and its moving average. Parameters ------------------ Data          The data to analyze. This is typically a field in a data series or a calculated value. Period        The number of bars of data to include in the average, including the current value.                   For example, a period of 3 includes the current value and the two previous values. Function Value ------------------------ The moving average is calculated by averaging together the previous values over the given period, including the current value. The moving average at the beginning of a data series is not defined until there are enough values to fill the given period. The percent difference from the moving average is the moving average subtracted from the current value divided by the moving average. Since this function uses division, if the moving average is 0, a null value will be returned. Usage ----------- Moving averages are useful for smoothing noisy raw data, such as daily prices. Price data can vary greatly from day-to-day, obscuring whether the price is going up or down over time. By looking at the moving average of the price, a more general picture of the underlying trends can be seen. Since moving averages can be used to see trends, they can also be used to see whether data is bucking the trend. This makes the percent difference from the moving average useful for highlighting where the data is breaking away from the trend.