THE TREND IS OUR FRIEND         PRICE & VOLUME ARE KEY

 

We need to be mindful of the long term trend, The VIV & The Fear & Greed indicator.

Also consider, before & during the trade session, The Bear/Bull Ratio & the SPY Relative & current volume.

Markets tend to trend higher or lower about 25 percent of the time in all holding periods

and get stuck in sideways trading ranges the other 75 percent of the time. (Bill Williams claims 15%-30%)

 

INDICATORS usually fall into two types LEADING & LAGING

I’M ONLY INTERESTED IN LEADING

 

I have tested many of these indicators, for their accuracy & ease of use.

Tradingview offer excellent free charts BUT only allow the use of two indicators.

They also feature many user defined indicator.

All indicators are purely a guide & must be used in conjunction with other trend confirmations.

 

KISS

 

ADX  DI                                 The wider the D+/D- are the stronger the trend is

OBV                                       Excellent

RSI                                          Good for reversal but not so good for continuation

Williams% &R                     Looking for better version

Williams A/D                      Very helpful for trend continuance

EFI                                          A definite favourite as SIMPLE   measures force of movement + above/ – below zero line

VIX FIX                                  In crazy times its wise to keep an eye on this indicator

PVT                                        Works well with other favourites

OSMA                                   Similar signals to ADX but I prefer the later.

 

 

Elder’s Force Index (EFI) measures the power behind a price movement using price and volume. The indicator can also be used to identify potential reversals and price corrections. The EFI is an oscillator that fluctuates between positive and negative values, above and below a Zero Line. Alexander Elder, the indicator’s creator, believed that there are three components to a security’s price movement. Those three components are: direction, extent and volume. All three of these components are combined by the EFI to generate the oscillator.

 

The Relative Vigor Index (RVI) is based on the likelihood of prices closing higher than the open in market uptrends, and similarly, closing lower than the open in downtrends. The Relative Vigor Index compares the closing price of a security or asset to its trading range.    Limitations:    The RVI tends to work better in markets that are trending as it seems to generate false signals and data when applied to range-bound markets. One way a trader can aim to improve their RVI results is to set long-term lookback periods. This will reduce the impact that short-term countertrends have on the overall data and takes out short-term changes from data readings.

 

The Price Volume Trend indicator (PVT) is a momentum based indicator used to measure money flow. PVT is similar to another technical analysis tool; On Balance Volume (OBV) in that it is an accumulation of volume. While the OBV adds or subtracts total daily volume depending on if it was an up day or a down day, PVT only adds or subtracts a portion of the daily volume. The amount of volume added or subtracted to/from the PVT total is dependent on the amount of the current day’s price rising or falling compared to the previous day’s close. Price Volume Trend (PVT) can primarily be used to confirm trends, as well as spot possible trading signals due to divergences.

 

The Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI) are derived from smoothed averages of these differences and measure trend direction over time. These two indicators are often collectively referred to as the Directional Movement Indicator (DMI).

 

The Average Directional Index (ADX) is in turn derived from the smoothed averages of the difference between +DI and -DI; it measures the strength of the trend (regardless of direction) over time.

 

Using these three indicators together, chartists can determine both the direction and strength of the trend.

 

Williams %R (%R) is a momentum-based oscillator used in technical analysis, primarily to identify overbought and oversold conditions. The %R is based on a comparison between the current close and the highest high for a user defined look back period. %R Oscillates between 0 and -100 (note the negative values) with readings closer to zero indicating more overbought conditions and readings closer to -100 indicating oversold. Typically %R can generate set ups based on overbought and oversold conditions as well overall changes in momentum.