Description

• Develop by Donald Dorsey, Inertia is used to determine price trend
• Inertia means momentum or motion of a body in a direction, here it resembles stock price
• It oscillates between 0 and 100
• It uses RVI as its volatility input to measure momentum of stock price, which helps to understand pace of price trend direction

Interpretation

• If inertia is above 50, trend is upward
• If inertia is below 50, trend is downward

Default Parameters Used/Inputs

• High Line
• Low Line
• Relative Volatility Index Bars
• Bars

Returns/Output

Herrick payoff index values of stock.

Formula

Inertia = LstSqrMA (RVI)
where,
LstSqrMA (regression line) = a +b(x)
RVI (Relative Volatility Index) = RVI (input) = 100 - (100 / (1 + RV(input))) RV =(Avg_of_n_updays_standard deviation)/(Avg_of_n_downdays_standard deviation) Up days = when high > Pvs high & for low > Pvs Low
Down days = when high < Pvs high & for low < Pvs Low