How might variables, such as using high price vs low price or Simple moving average (SMA) vs exponential moving average (EMA), influence a determination of degrees of freedom or data points that are consumed by a moving crossover strategy.
How many degrees of freedom are consumed by a moving average crossover strategy in the following 4 cases?
SMA (10, high), SMA (20, high) SMA (10, low), SMA (20, low) SMA (10, high), EMA (20, high) SMA (10, high), EMA (20, low)
As defined by Pardo
degrees of freedom = whole data sample – rules and conditions – data consumed by rules and conditions
I realize that there might be different answers depending on a more conservative or liberal approach.