Originally Posted by
Pascal
There is not much to write about this porosity issue. The idea is to avoid whipsaws, which occur when a reversal takes place just after a position is entered. For example, if we cross below the 0 level, the market could reverse up within minutes or hours. Without the porosity feature, we would start issuing many signals around the 0 level because it is a natural equilibrium level. The porosity feature is also used for overbought/oversold levels, but it is less useful there.
Pascal