Very interesting similarity between the ES1! and YM1!I was recently watching a video in the ideas section of trading view and I notice this person speculates that the price will drop lower in the Dow Jones. Interestingly enough, this also lines up quite well in my charts. It's important to notice that many differences exist between these two tickers. The fluctuations of the CBOT_MINI:YM1! and the CME_MINI:ES1! are quite different. I had to adjust the n data previous points in the short term mean return indicator to 20 as well as set the sensitivity to 2. This way the chart was not overcrowded and easier to read. As well as larger short term MA and distribution was needed.
I'll take advantage of this difference to explain what happens when the parameters in the indicator change. There are two factors to the sensitivity of the indicator. One is the number of previous days considered (parameter n). The higher this value is, the less sensitive the indicator is, therefore it's better at detecting longer term trends. This is the reason why I include 2 in the indicator. One to see the short term trend and one for the long term trend. This in addition to knowing where we are in the distribution help me for a hypothesis of what is most likely to happen next.
One key factor of my strategy when trading is to never go short unless you are absolutely sure you are correct, always look for discounts and take profits. It's better to buy at discounted prices than trying to catch both waves of the market. You already know the market did one wave, what do you think will happen next? Of course, the next wave! I personally trade with no stop loss to not materialize erroneous entries and look to buy even more as prices continue to drop and are at attractive levels. Unless there is a clear possible break of market structure like it's visible here, as the 200MA has been used in the past as strong points of support and resistance. If this structure is broken, then it's quite possible that price will trend even lower, so this trade does require a stop loss.
When I was more of an intermediate and unprofitable trader, I relied a lot on two indicators, which did give me the ability to make somewhat accurate predictions. Since tradingview has kept increasing the restrictions on free accounts, I had to choose between two of my favorite indicators. The RSI and the MACD. I chose to keep the MACD as it's visible on previous trades. Mean Returns offers the value of these two indicators into one, plus tests out a new hypothesis that I've been testing so far with great success.
The basic premise of this indicator is to chart the market cycles in terms of average returns generated in the n periods before and the current one. Additionally, it creates the supposition that the market has inertia and therefore is likely to continue doing what it's already doing (aka: the trend is your friend)
I hope the original posters of the video @AdvancedPlays gets to see this and find it to be of value.
Always remember there are no certainties in the markets, only probabilities
Returntomean
ELAN reverse to mean tradeDespite negative analyst reviews, ELAN managed to beat EPS and Revenue expectations and prove again that it will fight for market share.
Demand in the stock picked up for the last 2 weeks and a return of the stock price to its 200ma has a high probability to happen.
Do your homework and watch your risk.
Bitcoin: Correlation between NVT and the All-Time Mean Today I want to look at the bigger picture to put in context the recent Bitcoin move.
In the weekly chart, we see that the bias is bearish. The lows at 3100 fail to qualify as a THE BOTTOM by any sort of crypto standard:
a) Lack of volume
b) Lack of strong bounce
c) Lack of institutional blueprint
d) NVT still optimistic
Now, I want to look it from the perspective of the All-Time historical Mean for Bitcoin.
The bottom would be more credible if it coincides with a test of this line, as happened in 2015.
I'm plotting Bitstamp and BNC series, and we can see there a huge void between the current price location and the place where the All-Time Mean sits.
At Bitstamp, Bitcoin consolidated above the All-Time mean during 8 months before confirming the bull trend.
At the BraveNewCoin series (which is the longest one available in Tradingview), we see that the $150 spike bounced from the All-Time Mean.
Therefore, this is a legit line to be taken into consideration to prove the bottoming. Most of the assets have a natural tendency to revisit this line along high time frame cycles (unless they are heavily manipulated).
Additionally, the NVT is sitting at a similar range level (80-100) than did at 2015 before crashing below 50 and signal the low.
Will bitcoin test the All-Time Mean during this cycle? Well, we don't know that for sure but certainly the chances are there.
Bitcoin has been unable to fulfill any solid bottoming criteria and this one looks like could be the missing one that could trigger heavy volume and flash crash action.