If the indicator spike corresponds to a price bar overlapping the previous one, the previous close can be used as the DPL value. Suggestions for placing these lines are the same as for the Relative Volume StDev: These highlighted bars, or "spikes", define the positioning of the DPLs.Īs it was mentioned in the Relative Volume StDev article, DPLs can be drawn using the Price Level drawing. This value is plotted as a histogram its bars are highlighted when this ratio is unusually high. In mathematical sense, the Freedom Of Movement is the ratio of relative effect (relative price change) to the relative effort (normalized volume), expressed in standard deviations. Just like in Relative Volume StDev, these points are also marked by Defended Price Lines (DPLs) the two indicators should be used together in order to adjust and refine position of the DPLs. Sharing the principle of the Relative Volume StDev, it takes into account price-volume behavior in order to detect points where movement of price is suddenly restricted, the possible supply and demand pools. The Freedom Of Movement study is a support-resistance technical indicator developed by Melvin E.
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