The above chart presents example of negative and positive feedback applied on momentum adjusted moving average ( ) and rate of return ( RoR ).
Feedback concept in Electronic Engineering
Negative feedback (or balancing feedback) is applied to reduce the fluctuations, whether caused by changes in the source or by other disturbances. The applied negative feedback can improve performance, gain stability, linearity and reduce sensitivity to parameter variations due to environment.
Whereas positive feedback tends to lead to instability via exponential growth, oscillation or chaotic behaviour
Mathematical approach explained in description of "Rate of Return ( RoR ) by DGT" added as link to this idea, and an additional application of feedback efect presented in "Momentum adjusted Moving Average by DGT" also linked to the idea