NVT Golden Cross (NVT_GC) is a Bollinger-band-like signaling indicator based on NVT, defined as the following equation.
NVT Golden Cross targets to generate short or long signals by comparing the short-term trend of NVT and the long-term trend of NVT. If the short-term trend is way greater than the long-term trend is, the network can be interpreted as overpriced and will soon revert to mean value, meaning short signal. Similarly, the opposite case may imply a long signal.
We set the upper threshold as 2.2 and the lower threshold as -1.6 for detecting locally overpriced and underpriced network status. This leading indicator predicts the appearances of local tops and bottoms, which helps traders to take their short or long positions.