Description:
The Coppock Curve is a long-term price momentum indicator used primarily to recognize major downturns and upturns in a stock market index. Developed by economist Edwin Coppock in the late 1960s, the indicator aims to provide a reliable tool for identifying potential buying opportunities following a significant market decline.
Input Parameters:
- Fast: A moving average that reacts quickly to recent price changes, commonly used for short-term trend analysis.
- Slow: A moving average that responds more slowly to price fluctuations, useful for identifying longer-term trends.
- WMA: Defines the window size for the Weighted Moving Average (WMA).
- Price Source: The specific data points (such as open, high, low, or close) from each candle in a financial chart that an indicator uses for mathematical computations, enabling the calculation of metrics like the average over a specified period.
Use Cases:
- Buy Signals: Buy signals are generated when the indicator crosses above the zero line, suggesting that the market is transitioning from a bearish to a bullish phase. Conversely, the indicator does not explicitly define sell signals, as it was designed primarily for identifying market bottoms.
- Applications to Different Market Types: It was initially designed for use with broad stock market indices, such as the S&P 500 or the Dow Jones Industrial Average. Using the indicator on these indices can help investors identify significant market reversals, allowing them to allocate capital more effectively and potentially benefit from market recoveries.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.
May 10, 2024