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Alexander's Filter (ALF)

Description
This indicator shows the growth or decline of the price.

Calculation
The ALF is defined as being the percentage change in the price over the last n periods:

Formula
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where C(t) is the closing price.

Parameters
n characterizes the observation period and can assume values between 1 and 500. The standard setting is n = 12.

Interpretation
A sufficiently strong growth can be interpreted as a buy signal, and a strong decline as a sell signal.

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