Kosta Ouzas explains how to normalize market data by dividing values by a decay term, making all peaks the same height. He then scales the result to an index from 0 to 100, with 0 marking the bottom and 100 the top, so you can compare peaks across different time periods.
I calculate this decay that I just showed you, and then I account for it. So it's basically a normalization I basically eliminate by dividing by the decay, right Mathematically. So the result of that is that it's basically every peak seems the same. You see, they look the same height. Because I took away that decay, every peak looks exactly the same height. And that is cool, because then you can actually, instead of expressing this deviation in terms of percentage, you can create an index right between 0 and 100. 0 is when we reach a bottom and 100 when we reach the top.
