An Interesting Mathematical Observation

As we've observed here and in the previous chapter, when fitting a topfinder to an accelerated uptrend, a smaller value of D raises the curve, while a larger value lowers it. (The converse applies to bottomfinders fitting to accelerated downtrends.) It's interesting to examine how far down the TF curve can be driven by increasing D. Look at the formula for e in the previous chapter. In the limit when D becomes infinitely large, the denominator of the formula becomes 1, and e becomes d. This means the TF curve becomes S1 (assuming, of course, you start both curves from the same point with the same price data). So, the lowest you can push the TF curve is to make it coincident with S1; it can never be any ...

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