Using spreadsheet to produce PSY indicators (Psychological Line)

Stock Exchange and Market Analysis

Technical Analysis (19)

Psychological line (PSY), also known as the Majority Rule ( MJR), is an emotional indicator that studies the investor's psychological reaction to stocks' ups and downs , and can be invested people tend to buyer or mental fluctuation seller converted to be measurable value for reference , PSY is the use of a specific number of days (N) over a period, rise a few days prices for N ratio values of the calculated trend line. According to the PSY formula , we can see this indicator implying buying the strength of the atmosphere , supplemented by investors to buy low and sell high as the nature of the stock market and out of reference , is a very popular indicator with a reference value . According to PSY 's mathematical formula, let us import it into the Excel spreadsheet :

PSYN is _t : N daily psychological line of Day t ( expressed as %)
  PSYN_t = UPN_t / N*100
  N = cycle defined by PSY
  UPN _t = number of days for the market to rise within N days
Date Days Typically N is generally set to 12, the long period places 24 for Sunday . From the above equation , PSY value will be between 0 and 100, normally distributed generally falls from 25 to 75 between , when PSY than 75 when Then it will enter the overbought area , and the market may reverse at any time . Otherwise , when PSY is lower than 25 , it will fall into the oversold area , and the rebound probability will increase greatly . In addition, the PSY indicator will be in the oversold area before the market starts a wave of rising prices . appears twice lows , usually this approach is seen as the beginning of the signal . Instead of the current market to reverse decline , in the overbought zone will appear twice intensive high point , represents the opportunity to opportunistic appearances . Since A single technical indicator is more risky than distortion .It is recommended to use the VR, Volume Ratio ( Ref. 1 ) to find the high and low points of the band , and the counterclockwise curve (described later in detail ) can improve the accuracy . Clearly pointed out the head and bottom . Although the above is the general rule of entering and exiting stocks , due to the different stock attributes , it is better to observe the stock price candlestick chart , RSI indicator, etc. of the subject matter for at least one year , and then compare the technical indicators. It is advisable to make a moderate correction . Finally, in order to facilitate the reader to use the PSY index , the author still uses the model of Juyang (template) to continue to produce analytical samples in Excel format for readers' reference :

template19.xlsx

This sample in addition to the " Historical Prices " provide spreadsheet 12 days and 24- day PSY reference indices outside , and in the second spreadsheet "stock chart " to provide the candlestick diagram , volume , PSY psychological chart for readers Reference . If you find any mistakes, please correct me . Thank you !
In addition , the author made EXCEL spreadsheet for various indicators (moving average , RSI, BIAS, Stochastic KD line, William indicator , MACD, CDP and Bollinger band) for stock analysis , and further produced candlestick charts and other technical indicators on the same chart , interested readers can refer to Ref.2.
Reference (Ref):
1. Using spreadsheet to produce VR indicator (Volume Ratio)
2. Investment Financial Notes - Stock Technical Analysis