BTCUSDT short up-to-dateSome correlations between Fibonacci ratios on retracement and AB=CD with oscillators Ehler's Smoothed Stochastic and Even Better Cinewave . Price action below weekly Volume Weighted Moving Average (VWMA-20) is a strong bearish signal to look forward to a bear trend continuation, assuming that we have an intraday upthrust (distribution) movement and a potential bearish breakout That's a very good point of entry for shorts in the crypto market. I'm maintaining my 14.6% Fibonacci target to the expected Head and Shoulders correction.
Weightedmovingaverage
Heiken Ashi Algo Volume Scalping StrategyHeiken Ashi Algo Volume Scalping Strategy
Welcome everybody this is your Barista Eric should I be calling it a baristo cuz Barista sounds kind of effeminate and you can tell by my voice I am not a woman.
So we got something interesting.
Today I'm going to be sharing with you a volume scalping strategy that you can use with the heiken Ashi Algo.
This is a wonderful strategy because the algo has a lot of features that plot onto its oscillator and you can actually turn most of them off you only need basically three things showing up.
To do this all you need are:
Heiken Ashi Candles
The RSI Moving Average and
RSI (relative strength index line)
So let's go into the settings. I'll show you what to do and you'll be able to get started in this in just a few minutes.
Open tradingview and go to the indicators and I'm going to type in Heiken Ashi Algo. There you will see it under the Community scripts by @coffeeshopcrypto the "Heiken Ashi algo Oscillator"
Here is a link to it
(Click there)
Add it to your chart and let's go to the settings.
In the style tab of the settings You can turn off both of the stochastics.
Also you'll notice a couple of grade out boxes to things that are not selected. The RSI upper band and the RSI lower band. These print the 70 and the 30 level on your oscillator so turn them both on. If the other bands distract you you can turn them off. These would be the 40 and 60 levels.
The last thing you want to do here is change your RSI to yellow and your RSI moving average to red.
Now let's go to the inputs tab and change your RSI to 18 and RSI Moving average to 36.
If you're trading on a higher time frame than one hour you should probably change them to 21 and 50 as a maximum..
If you're trading on a 15 minute or lower time frame you should set them to about 12 and 14 or or lower.
Also change your RSI moving average type to a volume weighted moving average.
*******************Special Note******************
I want to address a couple of questions I got since the release of the Algo and one of the questions that I tried to cover in the previous couple of videos was when someone is going to ask me "what are the best settings at certain time frames?" You have to understand there are no best settings because if you're trading in crypto against the US dollar or crypto against For example another crypto then things move differently. your settings for the US dollar can be set one way but if you're trading crypto against crypto pairs you need different settings. also the settings are really tied to the market that you are in. if you are trading on the S&P or indices or Futures your settings are different for all of those things they are not the same for either one of them and once you get into crypto the markets are so volatile that you need to watch things closely/ so I cannot tell you what are the best settings because the best settings do not exist. Choose the settings that work well for you and if they are not working well it's because the market is changing just a little bit and you need to start developing additional strategies. You can not just have one strategy that you use all the time because that will not work all the time. Markets change. They have four different versions and you need to have several strategies that will be able to address each one of those types of Market.
One of the reasons that I've created this particular indicator is because it allows you to develop several different types of strategies and this particular video is one of those strategies that you can practice and you can use from time to time when you are seeing extremely changing volumes in the market that you're in. This way you have another piece of ammunition in your pocket that you can use when your current strategy or whatever you used to using isn't working as well as it should be.
05/16/2022 Pre Market ThoughtsMacro: Bearish
Micro: High Bullish Potential
I am more bullish than bearish currently.
I would like to see a start in APPL above 148.75. I think that can take us to 162 at the top. I think if Appl breaks though, we could see others like Carvana and Bill go up 30% to their respective supports.
I outline more of the specifics in the video.
I hope you all are doing well.
“HOW TO” Video Overview “Jerry J5 Dashboard & Buy Sell Strategy"Hello Investors!!!
This is a detailed video overview of the “Jerry J5 Dashboard & Buy Sell Strategy” release.
I will post the link to the strategy within a few minutes after this video goes live on TradingView in either the Related Ideas, or as a comment below with the link.
This is my first idea post and hopefully I set it up correctly.
Thank you for your support and patience.
A Deep Dive Into Moving AveragesMoving averages are inherent in the world of technical analysis and are present in the core calculations of many technical indicators. In this post, we take a deep dive into 3 types of moving averages used every day by traders: the Simple Moving Average (SMA), Exponential Moving Average (EMA) and the Weighted Moving Average (WMA).
The topics covered below can have practical applications while others are solely informative.
1. Introduction
Moving averages are trend indicators commonly used to smooth the closing prices by removing or attenuating certain variations and are able to estimate underlying trends. Their usage can be recorded as early as 1829 by John Finlaison for smoothing mortality rates (1).
In technical analysis moving averages are often essential for traders and can be found in every technical analysis software. However, they are not specific to this field as they often appear in Time Series Analysis and Digital Signal Processing (DSP).
Moving averages possess a single user setting that generally determines the degree of smoothness. This setting is often referred to as the moving average "length", "period" or less commonly "window size".
2. Curiosities About The Simple Moving Average
The Simple Moving Average abbreviated to "SMA", also known as the "Arithmetic Moving Average" or "Moving/Rolling Mean/Average" is certainly the most well-known moving average due to its simplicity and numerous applications in other domains. The SMA with period length is commonly calculated as follows:
SMA = (SUM C )/length, for i = 0 to length-1
= (C + C + ... + C )/length
Here all the weights w would be equal to 1/length (which is why we often state that a SMA has uniform weights).
2.1 Relationship With The Momentum Oscillator
Changes in a simple moving average with period length are equal to a momentum oscillator of the same period divided by length , that is:
SMA - SMA = (C - C )/length
This can be explained from the calculations of the changes in a Simple Moving Average:
change(SMA ) = SMA - SMA
= (C + C + ... + C )/length - (C + C + ... + C )/length
= (C - C )/length
The closing prices with the same lag cancel each other out, leaving only C(t) and C(t-length) divided by length in the final calculation.
As such you could tell whether a moving average of period length is rising or declining by simply comparing the current closing price to the closing price length bars ago. If the current closing price is higher; then the moving average is rising, else it is declining.
This relationship allows us to efficiently compute the SMA, allowing us to obtain a computation time independent of the moving average period which is very important for real-time high-frequency applications of the SMA.
2.2 Lag Of The SMA
Lag is defined as the effect moving averages have to return past price variations instead of new ones. For most moving averages this amount of lag can be quantified as the weighted sum between the moving average weights w(i) and the time lag associated with them. Higher weights given to more recent values would return a moving average with less lag.
All the weights of a simple moving average are equal to 1/length . The lag of a Simple Moving Average is thus given by:
Lag = SUM(1/length × i), for i = 1 to length-1
= 1/length + 1/length × 2 + ... + 1/length × (length-1)
= (length-1)/2
As such, the lag (in bars) of a Simple Moving Average is equal to its period minus 1, divided by 2.
Offsetting an SMA Lag bars in the past allows us to have it centered with the price.
2.3 Cascaded SMA's
Using an SMA as input for another SMA would return a smoother output; this process is known as cascading. In the case of the Simple Moving Average, cascading many SMAs of the same period would converge toward a Gaussian function.
The Irwin–Hall Probability Density Function can describe the result of cascading multiple SMAs using an impulse as input.
3. Curiosities About The Exponential Moving Average
The Exponential Moving Average; abbreviated as "EMA", also known as an "Exponentially Weighted Moving Average" or "Exponential Average" is a recursive moving average. That is, it uses a previous output for its computation.
This moving average is slightly more reactive than the Simple Moving Average due to its lower degree of filtering.
An EMA of period length is calculated as follows:
EMA = a × C + (1-a) × EMA
or:
EMA = EMA + a × (C - EMA )
with smoothing constant a = 2/(length+1) .
3.1 Traders Prefer The EMA Over The SMA
The trading community seems to have developed a preference for the EMA over the SMA. This might be explained by the superior reactivity of the EMA over the SMA.
The EMA is also more commonly used in the creation of technical indicators, sometimes for its superior reactivity, its computational efficiency, or sometimes simply by preference.
Several studies attempted to indicate which moving average (between the EMA and SMA) provided better performances. The conclusion can vary depending on the markets and methodology used. Dzikevičius & Šaranda found superior results of the EMA over the SMA (2), while Predipbhai found better results from an EMA-based MACD over an SMA-based one (3).
3.2 The EMA Helps Avoiding Division By Zero
In scenarios where we are required to perform a division with a moving average applied to a denominator, the EMA can help to avoid division by 0 as long as the smoothing factor is lower than 1 (EMA period superior to 1)
For a < 1, the EMA has an exponentially decaying infinite impulse response. The impulse response converges towards 0 but never reaches it.
This can be useful if we want to obtain the ratio between the average upward variations and average downward variations. In the event where there is a significant number of upward variations, an SMA of the downward variations might eventually be equal to 0; the EMA prevents this.
3.3 The EMA Has The Same Lag As An SMA
We previously mentioned that the EMA is more reactive than the SMA, but quantifying the lag of an EMA from the weighted sum between the EMA weights and their associated lag gives the same results as the lag of an SMA.
The weights of an EMA can be obtained from its impulse response, which is described as:
h = a × (1-a)^n, n ∈
The lag is then calculated as follows:
Lag = SUM i × (a × (1-a)^i), for i = 0 to infinity
= (1 - a)/a
= (1 - 2/(length+1))/(2/(length+1))
= 2/(length+1)
4. Curiosities About The Weighted Moving Average
The Weighted Moving Average; abbreviated as "WMA", also known as a Linearly Weighted Moving Average (LWMA), is the most reactive moving average when compared to the SMA and EMA. The WMA uses linearly decaying weights for its calculations, giving higher weights to more recent prices.
The WMA can be calculated as follows:
WMA = (SUM (length-i) × C )/(length*(length+1)/2), for i = 0 to length-1
4.1 Relationship With The SMA
It's interesting to observe how certain moving averages are related to each other. In the case of the WMA and SMA, the change of a WMA of period length can be given by the difference between the price and an SMA offset by 1 bar, divided by (length+1)/2 .
This equality is described as follows:
change(WMA ) = (1 - SMA )/((length+1)/2)
This also shows that the changes in a WMA with a period length-1 can indicate if the price is above or below an SMA of period length .
Like with the SMA, this relationship allows the calculation of the WMA efficiently allowing us to obtain a computation time independent of the moving average period.
4.2 Relationship With The Linear Regression
It can seem extremely surprising, but it is indeed possible to compute a simple Linear Regression of the price using linear combinations between a WMA and an SMA (under certain conditions).
The first point of a simple Linear Regression with coordinates (X1,Y1) fitted through the most recent length price observations can be obtained as follows:
X1 = t - length + 1
Y1 = 4 × WMA - 3 × SMA
While the last point with coordinates (X2,Y2) is given by:
X2 = t
Y2 = 3 × WMA - 2 × SMA
The periods of the WMA and SMA are both equal to length . Drawing a line using the above coordinates would return the simple Linear Regression fitted to the most recent length price observations. The slope of the linear regression is equal to:
m = ((3 × WMA - 2 × SMA ) - (4 × SMA - 3 × WMA ))/(length-1)
= 6*(WMA - SMA )/(length-1)
References
(1) Hoem, J. M. (1984). A contribution to the statistical theory of linear graduation. Insurance: Mathematics and Economics, 3(1), 1-17.
(2) Dzikevičius, A., & Šaranda, S. (2010). EMA Versus SMA usage to forecast stock markets: the case of S&P 500 and OMX Baltic Benchmark. Business: Theory and Practice, 11(3), 248-255.
(3) Predipbhai, N. P. (2013). Comparison between exponential moving average based MACD with simple moving average based MACD of technical analysis. International Journal of Scientific Research, 2(12), 189-197.