Indicatore - ARMS Index
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Calculation ARMS Index
The ARMS index is a market breadth indicator, which can be viewed by adding it to the charts of individual stocks.
It is calculated by dividing the number of stocks with increasing price by number of stocks with decreasing price, and advancing volume by declining volume.
The first result is then divided by the latter.\nA moving average is used to smooth out the swings, the default parameter is a simple moving average on 21 bars.
Interpretation ARMS Index
If the index is above one, the average volume of stocks that fell on the market was greater than the average volume of stocks that rose and vice versa.
The indicator is most significant when it reaches extreme levels.
This indicator rises sharply when the market is most depressed and selling is climaxing, and falls to very low levels during buying frenzies.
