This is a simple update to the Mayer Multiple script by Unbound, which charts an indicator created by Trace Mayer and popularized by Preston Pysh.
The original post identified any price below 2.4x the 100-day MA as the BTC buy threshold. While the logic there is historically sound, it does not account for the fact that the BTC trend is parabolic in nature. With that in mind, I've attempted to update the 2.4x multiple to react based on the moving average of the Mayer Multiple itself. To do so, I simply found the number that, when added to the MM moving average, historically hit the 2.4x multiple during periods of low volatility. This turns out to be 1.17.
The green line represents the Klahr Threshold (is it obnoxious if I call it that? I've always wanted an indicator named after me). As you can see from the above chart, it hovers around 2.4x in late 2012 to early 2013, rises above it until mid 2014, and then stays below until 2016. It then stays almost exactly at 2.4x until April 2017, when it rises significantly above it for the first time since July 2014. The convergence in late 2012 and 2016-2017 is what leads me to believe that this should be the basis for the updated threshold.
It's entirely possible that there's a more robust method of calculating a reactive threshold (or a different number that should be added to the multiple's MA), but I think this is a good first step in refining the multiple to withstand the test of time.
@jason0027, glad you enjoyed! You should be able to hit "add to favorite scripts" above, then go to the BTC chart and apply it from the favorites section under "Indicators".
@jack_denaut, my apologies. I based the indicator on Unbound's work and was not aware of yours, although they do seem to be somewhat different, I'd be glad to attribute you as well if there were any way to edit this, but I can't seem to do that
UnknownUnicorn1626617
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This is very useful. Thank you for this.
It was working fine initially, however, now it seems to be malfunctioning somewhat. The reading seem to begin form May 2014 which puts everything out of whack. Is this an issue on my end you think?