The Ulcer Index was authored by Peter Martin in 1987. It is designed as a measure of an instrument’s volatility or risk. The user may change the input (close) and period length. This indicator’s definition is further expressed in the condensed code given in the calculation below.See also Ulcer Index.
How To Trade Using the Ulcer Index
The Ulcer Index may be used to evaluate a instrument’s volatility or risk. No trading signals are calculated.
How To Access in MotiveWave
Go to the top menu, choose Study>Performance>Ulcer Index
or go to the top menu, choose Add Study, start typing in this study name until you see it appear in the list, click on the study name, click OK.
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//input = price, user defined, default is close
//period = p1, user defined, default is 30
//index = current bar number, LOE = less or equal
//sqrt = square root
Plot: ulcer = ulcer(index, p1, input); .... Method ulcer(int index, int period, Object input) sumSq = 0, iprice = 0, dd = 0; peak = 0; for (int i = index-period+1; i LOE index; i++) iprice = price[i]; if (iprice moreThan peak) peak = iprice; else dd = (100 * (iprice/peak) -1); sumSq = sumSq + (dd * dd); endif endFor return Math.sqrt(sumSq/period); ....