Average Return

#[momentum] #[return] #[oscillator] 

Measures the average daily rate of return over a set period. It smooths out daily price changes to show the underlying direction of returns. 

Default period: 10 (Return period) 

Plotted in a separate pane below the price chart. Values above zero indicate positive average returns. Values below zero indicate negative average returns. 

Useful readings: 

Value turns positive: Average returns are now positive, bullish momentum 

Value turns negative: Average returns are now negative, bearish momentum 

Value rising from negative: Return momentum improving, possible reversal ahead 

Value falling from positive: Return momentum weakening, possible reversal ahead 

Value near zero: Returns mixed, market in balance 

Objective rules: 

Bullish: Average Return crosses above zero line. 

Bearish: Average Return crosses below zero line. 

Long setup filter: Value > 0 AND rising for 3+ bars 

Short setup filter: Value < 0 AND falling for 3+ bars 

Whipsaw filter: Skip signal if last zero-cross occurred within last 5 bars 

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.