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The MSR is a support and resistance indicator developed by David Varadi and introduced in his website cssanalytics.wordpress.com.
This technical indicator tries to measure the support and resistance levels by calculating the middle price over a short/intermediate time frame. Data is normalized using the Percent rank indicator, which can be downloaded here: Percentile - Percent Rank of a Trading Indicator.
MSR is based on the difference between the 10-Bar median price and the 20-bar high divided by the 20-bar high. The normalization is calculated by taking the 252-bar percentile rank of the previous time-series.
A long trade is initiated when the MSR value is higher than 50% and a short trade is taken when the MSR value is lower than 50%.
Trading System Example:
- Download this indicator then use the following formula:
buy = msr() > 50;
sell = msr() < 50;
The different periods (moving average, highest high and percent rank) can be changed by updating the formula and modifying the first three lines of code.
If you want to calculate the percentile rank of the MSR indicator using the last 100 bar then change the value of the "prank" variable to 100. (Default value is set to 252 - One year approximately).
For more information regarding this function, go to: http://cssanalytics.wordpress.com/2010/10/27/a-new-trend-indicator-msr/
You can find more details and the exact formula there.
