FM Demodulator is a technical indicator that singles out the frequency modulation component out of market data cycles. It does so by applying a hard limiter that eliminates all amplitude information from the market data spectrum. Based on signal processing techniques, this indicator can help detect potential turning points in market data.
FM Demodulator is calculated as follows:
- Hard limiter is applied to the difference between the close and open for each bar during the indicator period: the difference is multiplied by the specified factor and the results are cut off to fit the -1 to +1 range.
- The Super Smoother filter is applied to the result.
The resulting indicator can help detect major price swings. Peaks and valleys of the indicator plot can be used for confirmation of the price action.
||The length to calculate the cutoff filter with.|
||The factor to multiply the difference between close and open by. Used in the calculation of hard limiter.|
||The FM Demodulator plot.|
||The zero level.|
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.