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LER - Law of Effort vs Results

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Law of Effort vs Results is a tool to find the price changes based on volume.

This tool shows that if there is a high volume occur but the price has small difference in one candle, this will trigger a 'spike'. This spike represents that a high activity has occurred but the price did not reflect as the volume changes.

The analogy of this tool can be represented as we drive a car on a steep hill: despite we hit the gas harder, the car just slightly move higher.
Nota Keluaran
New update:

The previous release had a loophole, in which the spike has not triggered if a doji has occured (a doji simply means that the open price and close price are equal in one candle).

Since this algorithm use volume / price_difference, the doji will create the price difference becomes zero and lead to the infinity value.

To fix the doji issue, a bid offset has been added with default value of 0.005 (this default value was chosen based on the counter in stock exchange of Malaysia below MYR1).

Penafian

Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.