What is the deviation rate (BIAS)?
1. Introduction
Deviation rate (BIAS) is an indicator that reflects the degree of deviation between the stock price and its moving average in a certain period.It is calculated in terms of percentage difference.
When the stock price moves drastically to deviate from the trend, the possibilities for a pullback or rebound increase; When the stock price movement does not deviate from the trend, it is likely that the trend will continue.
By connecting BIAS values into a polyline, a deviation rate (BIAS) graph can be plotted to facilitate making trading decisions.
2. Formula
BIAS = [ (Closing price of the day — N-day average price) / N-day average price ] * 100%
3. Application
A BIAS value can be positive, negative, or zero.
（1）When the stock price is above the moving average, it is positive;
（2）When the stock price is below the moving average, it is negative;
（3）When the stock price is consistent with the moving average, it is zero.
To utilize BIAS, one positive and one negative parameter should be set respectively.
（1）When the BIAS is above the positive parameter, a sell signal emerges as the stock has been overbought;
（2）When the BIAS is below the negative parameter, a buy signal presents itself as the stock has been oversold.
To determine the parameters, the following factors should be considered:
1. the parameter N (as in N-day average price in the Formula);
2. the specific stock (whether it's actively traded or not);
3. the overall market sentiment (bullish or bearish).
3.1 How to access BIAS
Path: Detailed Quotes of a Stock - Chart Settings - Add Indicator - Search - Check BIAS
3.2 How to set BIAS
Path: Detailed Quotes of a Stock - Chart Settings - Indicators - Tap BIAS - Set Color and Parameters
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more
