US Market Balance of Power Heikin Ashi Swing StrategyThis is a swing strategy, using the power of correlation, mainly designed for an investment approach for the US Market.
It uses the original OBV formula, which has been adapted to monthly heikin ashi candles values, which are taken from the correlated asset, in this case we are using QQQ chart for testing, but internally we are using the logic from SPY chart for calculations.
Once we that value, we make a moving average of it with the length of half of a year to have an idea about the overall price trend during that period of time.
After that, we are going to apply a percentile formula for the OBV value, and we are going to look for the percentile near 100th rank of the entire history of that data.
Finally once we have the top percentile values, we are going to create different formulas for long and short entries:
Short Entry/ Long exit = Current top percentile is higher than the previous top percentile value
Long Entry/ Short Exit = Current obv value is negative and the top percentile is smaller than the previous one or we are near the top values for the OBV oscillators ( crossing upwards previous candle/downwards current candle)
The strategy has been tested using 25% of the entire initial capital available in order to have an idea about the compound effect over the entire history of time which was selected.
From the test which can determine, that on average when we have strong bullish trends, the initial buy n hold strategy outperforms us, however the strategy is definitely a winner when there are side market/ bearish periods of time since it will help cut losses during these periods.
If you have any questions, please let me know !
DIA
Convert ETF to Futures/IndexThis indicator is used to automatically map an ETF's VWAP and 10 levels above and below the strike of your choice, to the futures or index instrument currently being viewed/traded. This works very well when using both SPY to ES/MES/SPX or QQQ to NQ/MNQ/NDX to plot the ETF strikes and can lead to some incredible trades, especially when trading level to level. Since SPY, QQQ, IWM, and DIA have the same price action as their futures iteration, there seems to be a direct correlation between their levels and VWAP . This indicator is made to easily map these key levels to the appropriate futures instrument. If you have a way to measure GEX centered around a certain level, I recommend color coding the lines to help indicate whether the level will have strong positive or negative gamma hedging associated with it.
DOW 30 - Market BreadthDOW 30 indicator is intended for short-term intraday analysis and should not be used solely alone. Best to use this indicator in a combination with technical and fundamental analysis.
This indicator is calculated from all stocks in the DJI as of 8/9/2022;
- Evaluating VWAP,
- 9 EMA,
- 20 EMA.
Vwap Calculations;
Stock above Vwap = 1 (Vwap Bull),
Stock below Vwap = 1 (Vwap Bear),
As there are 30 stocks in the DJI, there is a max value of 30 Vwap Bulls/ Vwap Bears.
Ema Calculation;
Stock above 9 EMA = 0.5 (EMA Bulls),
Stock below 9 EMA = 0.5 (EMA Bears),
Stock above 20 EMA = 0.5 (EMA Bulls),
Stock below 20 EMA = 0.5 (EMA Bears),
For the EMA Bulls to reach 30 all stocks must be trading above both the 9 EMA and 20 EMA to reach a Max Value of 30.
The reasoning for this calculation is to suggest the current strength and speed of the current turn in the market.
Horizontal Lines:
There are three horizontal lines, MAX, MIN & Neutral;
MAX & MIN
Resides at the 30 & 0 levels suggesting the market is currently at an extreme. Representing all stocks are moving in the same direction together.
When the MAX or MIN are represented in the VWAP Line this represents directional conviction in the underlining DJI.
Neutral
Neutral resides at the 15 level and represents that the market is either about to make a decision or is choppy.
EXAMPLE
Below are some examples of how the DOW 30 indicator is able to represent the current market conditions.
Understand Current Market Conditions, either being Bullish, Neutral, or Bearish.
See live Market Mechanics, and understand the current market direction on a short-term timeframe.
DOW 30 indicator is intended for short-term intraday analysis and should not be used solely alone. Best to use this indicator in a combination with technical and fundamental analysis.
If there are any additional requests to the indicator feel free to leave a comment or privet message.
Best of luck trading.
Volatility Calculator for Daily Top and Bottom RangeWith the usage of ATR, applied on the close of the daily candle, I am calculated the volatility channels for the TOP and BOTTOM
Based on this logic, we can estimate, with a huge confidence factor, where the prices are going to be compressed for the trading day.
Having said that, lets take a look at the data gathered among the most important financial markets:
SPX
TOP CROSSES : 2116
BOT CROSSES : 1954
Total Daily Candles : 18908
Occurance ratio = 0.215
NDX
TOP CROSSES : 1212
BOT CROSSES : 1183
Total Daily Candles : 9386
Occurance ratio = 0.255
DIA
TOP CROSSES : 759
BOT CROSSES : 769
Total Daily Candles : 6109
Occurance ratio = 0.25
DXY
TOP CROSSES : 1597
BOT CROSSES : 1598
Total Daily Candles : 13156
Occurance ratio = 0.243
DAX
TOP CROSSES : 1878
BOT CROSSES : 1848
Total Daily Candles : 13155
Occurance ratio = 0.283
BTC USD
TOP CROSSES : 416
BOT CROSSES : 417
Total Daily Candles : 4290
Occurance ratio = 0.194
ETH USD
TOP CROSSES : 247
BOT CROSSES : 268
Total Daily Candles : 2452
Occurance ratio = 0.21
EUR USD
TOP CROSSES : 820
BOT CROSSES : 805
Total Daily Candles : 7489
Occurance ratio = 0.217
GOLD
TOP CROSSES : 1722
BOT CROSSES : 1569
Total Daily Candles : 13747
Occurance ratio = 0.239
USOIL
TOP CROSSES : 1077
BOT CROSSES : 1089
Total Daily Candles : 10231
Occurance ratio = 0.212
US 10Y
TOP CROSSES : 1302
BOT CROSSES : 1365
Total Daily Candles : 9075
Occurance ratio = 0.294
Based on this, we can assume with a very high confidence ( 70-80%) that the market is going to stay, within the range created from the BOT and TOP ATR points.
Litt Internals ProThe Litt Internal Pro is based on the four major U.S. Equity Indexes. This is to not be used for any other markets. If you need more information on any of the indexes, you can google or watch YouTube videos on what they are. Typically if we are looking for to be long we want to see all four of the indexes green and have buy ratings. If we are looking to be short we want to see all four of the indexes red and have sell ratings. If you see Overbought or Oversold ratings it may be best to wait for a pullback to get long or not take the trade at all.
For the stocks that you trade, you should know what index they are in. The reason for this is that you can still take trades if not all four indexes are aligned the same color. For example, maybe small caps (IWM) are on a hot streak and seeing buying momentum from institutions meanwhile tech (QQQ), is being sold. If you held a long in a company that is in IWM then you could be more comfortable holding your long position. Meanwhile, if you held a long position in a stock that is in QQQ then you might want to cut your loss or take profit. There are multiple different use cases for this indicator so it is best to look for outside resources on more information on the indexes and what stocks are in each index. This can be a very powerful tool to see sector rotation by hedge funds and institutions.
Simple RSI-MA Algo Beats DOW By Huge Margin Over Past 100 Years!This simple RSI-MA long/short algorithm beats the Dow by a FREAKING HUGE margin over the past century (excluding dividends and trading costs).
The algorithm uses a fast SMA of the RSI as a buy/cover signal and a slow SMA of the RSI as a sell/short signal.
Backtest period = 09/17/1916 - 11/02/2015
Dow = 98 --> 17,830 = +18,094% = 5.38% CAGR
Algorithm = net profit + open P/L = +43,349% = 6.31% CAGR
Notice how the algorithm dodged both the 30s' Great Depression and the 2008 Crisis. Pretty cool huh? :)
ALGORITHM'S FORMULA (use weekly chart):
Buy/Cover = MA10(RSI10) cross> 50
Sell/Short = MA50(RSI10) cross< 50
STRATEGY TESTER'S SETTINGS:
- Initial cash = $10,000
- Pyramiding disabled
- Re-investment enabled (order size = 100% of equity )
- Trade re-calculations disabled
DISCLAIMER: None of my ideas and posts are investment advice. Past performance is not an indication of future results. This strategy was constructed with the benefit of hindsight and its future performance cannot be guaranteed.
