What is the Ulcer Index?
The Ulcer Index is a stock market risk measure or technical analysis indicator devised by Peter Martin in 1987[1], and offered by Martin and co-author Byron McCann in their 1989 book, The Investor’s Guide to Fidelity Funds. The index is designed as a measure of volatility – but only downward volatility (the amount of drawdown or retracement occurring over a given period). Other volatility measures, like standard deviation, treat up and down market movement equally. The fact that traders welcome upward movement and dread downward shifts helps to explain the Ulcer Index’ unique name.
