Identify a Trend from a Polynomial Equation

6 ott 2020

Many had asked on how i identify the trend change values

We can identify the Trend of a set of Data set using the following rules
You can pull the NIFTY close price of last 10 days and put scatter plot ,Trend line in Excel to see the Equation automatically . Set it for 2nd degree Polynomial equation

Yt = B0 + B1t + B2t^2 + Ut (2nd Degree Polynomial example).

if B1 > 0 and B2 >0 Increasing
if B1 >0 and B2<0 Inverted U Shape
if B1<0 and B2<0 Decreasing
if B1 < 0 and B2 > 0 U shape Data


I programmatically find the value of NIFTY that changes B1 and B2 to change the shape.

Hope this helps

6 ott 2020

Nota

This is just a simple way to explain the basic concept but actually the degree of polynomial needs to change to 5 or 6 for accuracy , Historical validation and standard deviation , fibonacci ratios are things i use on top of this.

6 ott 2020

Nota

Date NIFTY LTP, Equation, Inferance ,Action
8-Sep-20 11318
9-Sep-20 11334.15
10-Sep-20 11476
11-Sep-20 11475.25
14-Sep-20 11445.55
15-Sep-20 11548 Y= 74.22179x -4.54821x2+ 11,242.03000 Inverted U shape Coming Down
16-Sep-20 11628.9 Y= 40.94107x + 0.81964x2 +11,280.67857 Increasing Moving UP
17-Sep-20 11547.9 y = 73.83065x -3.87887x2+ 11,238.39196 Inverted U shape Coming Down/Trend changed to DOWN
18-Sep-20 11533.7 y = 86.82580x -5.54491x2 + 11,220.06548 Inverted U shape Observe increase in B1 and decrease in B2 Down trend
21-Sep-20 11240.55 Y= 144.14913x -12.21042x2+ 11,132.08083 Inverted U shape Observe increase in B1 and decrease in B2 Down trend
22-Sep-20 11196.9 Y= 151.27486x -12.96847x2 + 11,120.25515 Inverted U shape Observe increase in B1 and decrease in B2 Down trend
23-Sep-20 11162 Y= 138.11761x -11.67855x2 + 11,143.73182 Down trend
26-Sep-20 10840 Y= 153.29838x -13.05862x2 + 11,114.75035 Down trend
27-Sep-20 11031.9 Y= - 193.71250x+ 10.75893x2 + 11,781.52143 U Shaped Data UPTrend
28-Sep-20 11242.5 Y= -287.66042x +24.18006x2+ 11,902.31161 U Shaped Data UPTrend