Something technical


Break it away
As a rule of thumb, "high volume" for any given market is at least 25 percent above average for the past two weeks, and "low volume" is at least 25 percent below average.
  1. High volume confirms trends. If prices rise to a new peak and volume reaches a new high, then prices are likely to retest or exceed that peak.
  2. If the market falls to a new low and the volume reaches a new high, that bottom is likely to be retested or exceeded. A "climax bottom7' is almost always retested on low volume, offering an excellent buying opportunity.
  3. If volume shrinks while a trend continues, that trend is ripe for a reversal. The reverse is untrue.
Prices represent the consensus of value, while volume represents the emotions of market participants.

On or off balance?
On-Balance Volume often rises or falls before prices - it acts as a leading indicator.
A new high in OBV shows that bulls are powerful, bears are hurting, and prices are likely to rise. A new low in OBV shows that bears are powerful, bulls are hurting, and prices are likely to fall. When the pattern of OBV deviates from the pattern of prices, it shows that mass emotions are not in gear with mass consensus. A crowd is more likely to follow its heart than its mind. This is why changes in volume often precede changes in prices. When OBV rises or falls together with prices, the trend is confirmed.

If prices reach a new high and OBV reaches a new high, the uptrend is likely to continue.

  1. When OBV reaches a new high, it confirms the power of bulls, indicates that prices are likely to rise even higher, and gives a buy signal.
  2. OBV gives its strongest buy and sell signals when it diverges from prices. If prices rally, sell off, and then rise to a new high, but OBV rallies to a lower high, it creates a bearish divergence and gives a strong sell signal. If prices decline, rebound, and then fall to a new low, but OBV falls to a more shallow bottom, it traces a bullish divergence and gives a strong buy signal.
  3. When prices are in a trading range and OBV breaks out to a new high, it gives a buy signal. When prices are in a trading range and OBV breaks down and falls to a new low, it gives a signal to sell short.
Which way is the traffic?

The Directional System is unique in telling you when a major new trend is likely to begin. It signals when a new baby bull or baby bear is being born.

The relative position of Directional lines identifies trends. When the Positive Directional line is above the Negative Directional line, it shows that bullish traders dominate the market. When the Negative Directional line rises above the Positive Directional line, it shows that bearish traders are stronger. It pays to trade in the direction of the upper Directional line.
  1. The best time to be long is when both +DI13 and ADX are above -DI13 and ADX rises.
  2. When ADX declines, it shows that the market is becoming less directional.
  3. When ADX falls below both Directional lines, it identifies a flat, sleepy market. Do not use a trend-following system but start getting ready, because major trends emerge from such lulls.
  4. The single best signal of the Directional system comes after ADX falls below both Directional lines. The longer it stays there, the stronger the base for the next move. 

When ADX rallies from below both Directional lines, it shows that the market is waking up from a lull.

Add or deduct

It was designed as a leading indicator for stocks, the unique feature of Accumulation/Distribution (AD) is that it tracks the relationship between opening and closing prices, along with volume. If prices close higher than they opened, then bulls won the day and AD is positive. If prices close lower than they opened, then the bears won and AD is negative. If pricks close where they opened, then nobody won and A/D is zero. A running total of each day's AID creates acumulative Accumulation/Distribution indicator.
The best trading signals are given by divergences between AD and prices. 
  1. A bullish divergence occurs when prices fall to a new low but AD stops at a higher low than during its previous decline. It shows that market professionals are using the decline for buying, and a rally is coming.
  2. If prices rally to a new high but AID reaches a lower peak, it gives a signal of bearish divergence, sell.
Waiting for spring or autumn
  • Screen 1: Weekly macd-histogram rising.
  • Screen 2: Use oscillator to a daily chart, find declines during weekly uptrends.
  • Screen 3: Use the trailing buy-stop technique when the weekly trend is up and the daily oscillator is down(stocastic/william%?).
Trailing buy stop technique: Place a buy order one tick above the high of the previous day.
As soon as you buy, place a stop-loss order one tick below the low of the trade day or the previous day, whichever is lower. Limit is only 2%.
Ride till price goes below 13wma or weekly stocastic going down from overbought or negative SAR begin.

Weekly Trend-Daily Trend-Action-Order:
UP-Down-Go long-Trailing buy stop

Good luck! Thanks doc.

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