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The Coppock indicator, developed by Edwin Coppock, is used as a technical analysis tool to detect the beginning of bullish periods. Initially confined to the Dow Jones Industrial Average, it is also appropriate for use with other indices.
The Coppock indicator, also called Coppock curve, is generally used by long-term stock market traders, its calculation formula is quite simple: for monthly signals, it takes the 10-month weighted moving average of the sum of a 14-month and an 11-month rates of change. For daily bars, the periods are respectively of 294, 231 and 210 days.
Theoretically speaking, Coppock indicator turn-up from zero indicates the commencement of a bull market, that is, a buy signal is generated when the indicator is below zero and then crosses the zero line from below. The particularity of this indicator is that it does not generate any sell signals.
The Coppock indicator function I have created in QuantShare is named 'coppock_indicator'. It takes as argument the weighted moving average period. The Rate of change periods are fixed within the script, but you can easily extract them and set them as additional parameters to the Coppock function.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.