How to read Speed Index and Identify Potential Reversals!
In this chart we removed all Plutus signals and we are reading just Speed Index and weighted Averaged Speed Index. The purpose is to identify a potential reversal at a significant location such as Fib.
There are two numbers visible on every price wave swing, the first one is the wave's Speed Index and the second one is the weighted average Speed Index of the 30 waves back.
What do we need to identify for a potential reversal? The answer is Abnormal Speed Index compared to the weighted average Speed Index, which means that something is cooking.
Reading the chart:
- Look at highest volume up wave hitting the Fib area, Speed Index at 6.2 while the average at 5.0 , higher than the average but not too abnormal.
- The next down wave is where it gives you an Abnormal Speed Index of 10.4 with an average of 5.2. This is what we call their first Push Down, now definitely something is cooking.
- The next up wave has a Speed Index 10.4 (Abnormal) with an average of 5.2 and that's we call a Hard to Move Up Wave (HTMU).(by coincidence these two waves have the Speed Index and average Speed Index)
- Finally to make sure that all these were sellers we need price to break these waves.
To Summarize this is how we approach this Short trade (annotations are in sync with chart).
1. Fib Location (potential sellers might enter)
2. The highest volume up wave to get to Fib
3. Placed AVWAP at the beginning of this up wave, because we will go short if price goes below AVWAP with the appropriate Speed Index justification.
4. First Push Down wave with SI 10.4 with AvgSI at 5.2
5. HTMU (Hard to Move Up) wave with SI 10.4 with AvgSI at 5.2
6. Our entry Short breaking the structure of the previous waves and cross AVWAP downwards.
I hope this helps all you Weis Wave Speed Index owners. Enjoy!!!
There are two numbers visible on every price wave swing, the first one is the wave's Speed Index and the second one is the weighted average Speed Index of the 30 waves back.
What do we need to identify for a potential reversal? The answer is Abnormal Speed Index compared to the weighted average Speed Index, which means that something is cooking.
Reading the chart:
- Look at highest volume up wave hitting the Fib area, Speed Index at 6.2 while the average at 5.0 , higher than the average but not too abnormal.
- The next down wave is where it gives you an Abnormal Speed Index of 10.4 with an average of 5.2. This is what we call their first Push Down, now definitely something is cooking.
- The next up wave has a Speed Index 10.4 (Abnormal) with an average of 5.2 and that's we call a Hard to Move Up Wave (HTMU).(by coincidence these two waves have the Speed Index and average Speed Index)
- Finally to make sure that all these were sellers we need price to break these waves.
To Summarize this is how we approach this Short trade (annotations are in sync with chart).
1. Fib Location (potential sellers might enter)
2. The highest volume up wave to get to Fib
3. Placed AVWAP at the beginning of this up wave, because we will go short if price goes below AVWAP with the appropriate Speed Index justification.
4. First Push Down wave with SI 10.4 with AvgSI at 5.2
5. HTMU (Hard to Move Up) wave with SI 10.4 with AvgSI at 5.2
6. Our entry Short breaking the structure of the previous waves and cross AVWAP downwards.
I hope this helps all you Weis Wave Speed Index owners. Enjoy!!!
Contact:info@tradethevolumeswaves.com
Site: tradethevolumewaves.com
Lesson 15: youtu.be/QPG59GWr5HQ?si=joaRCJgvyo-L2ntM
Site: tradethevolumewaves.com
Lesson 15: youtu.be/QPG59GWr5HQ?si=joaRCJgvyo-L2ntM
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Contact:info@tradethevolumeswaves.com
Site: tradethevolumewaves.com
Lesson 15: youtu.be/QPG59GWr5HQ?si=joaRCJgvyo-L2ntM
Site: tradethevolumewaves.com
Lesson 15: youtu.be/QPG59GWr5HQ?si=joaRCJgvyo-L2ntM
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.