Understanding the B3612 indicator

What is it?

The B3612 indicator is an extension of the BIAS (Bias Indicator) and reflects the deviation between average prices, manifested as the gap between moving averages. It is composed of two lines: B36, which represents the "three-day moving average minus the six-day moving average," and B612, the "six-day moving average minus the twelve-day moving average." The value of B3612 can be positive or negative. A positive bias indicates that the short-term average is performing better than the long-term average.

How is it calculated?

To calculate B3612, subtract the n2-day moving average from the n1-day moving average, where n1 and n2 can be adjusted, with the condition that n2 > n1.

B36 = Average closing price over 3 days - Average closing price over 6 days, representing the deviation of the 3-day average from the 6-day average.

B612 = Average closing price over 6 days - Average closing price over 12 days, representing the deviation of the 6-day average from the 12-day average.

How is it used in trading?

1. The bias fluctuates above and below the equilibrium point of the bull-bear market. When the bias is positive and reaches a level where it can no longer rise, it signals a selling opportunity for bulls; conversely, it indicates a buying opportunity. In a clear bullish trend, the market usually finds support near zero on the B36 line during pullbacks, and if it dips below, it often recovers quickly.

2. A buy signal is given when B3612 crosses above the zero line; conversely, a sell signal is indicated when it crosses below the zero line.

Note: The B3612 indicator should be used in conjunction with other indicators to better assist in trading decisions.