Majority Rule (MJR)
For the Majority Rule, it is calculated on which percentage of the days within the observation period the price was rising.Calculation
For each day of the observation period, there is a so-called threshold value. This is 1 if the price has risen in relation to the previous day, otherwise it is 0. Now the sum of all threshold values is formed and divided by the number of days. The result is then multiplied by 100.
where s is as described above: either one or zero.Parameters
The parameter n characterizes the observation period. It can assume values between 1 and 500. The standard setting is n = 14.Interpretation
The Majority Rule can be used either to confirm the trend of the underlying instrument, or to signal an overbought or oversold market. An overbought market has very high Majority Rule values, whereas an oversold market has very low Majority Rule values.
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