Market Pulse4 Market Stages:
The Market Pulse indicator simplifies the market into 4 separate stages:
Acceleration - Market in confirmed uptrend
Accumulation - Market in uptrend, but moving more cautiously
Deceleration - Market in confirmed downtrend
Distribution - Market in downtrend, but moving more cautiously
Full video tutorial breaking down the 4 different market stages can be found on our website.
How Does it Work?
The Market Pulse line is plotted using a 10-period Variable Moving Average (VMA). This works as a good substitute for moving averages, and allows you to easily determine trend, in a process-driven fashion, without leaving room for over-analyzing ( ie . are these moving averages stacked, what if x is above y, but a is below b, etc.). The color of the Market Pulse line is determined by the relationship between three Volume Weighted Moving Averages ( VWMA ): 8-period VWMA , 21-period VWMA and 34-period VWMA .
The Market Pulse line will change colors, based on the following conditions:
Green line - when the 8-period VWMA is greater than the 21-period VWMA and the 21-period VWMA is greater than the 34-period VWMA (Acceleration stage)
Red line - when the 8-period VWMA is less than the 21-period VWMA and the 21-period VWMA is less than the 34-period VWMA (Deceleration stage)
Gray line - when the three VWMAs are not stacked bullishly or bearishly, and there is no clear trend clarity (Accumulation stage if close >= VMA, Distribution stage if close < VMA)
Questions?
Feel free to send us an email if you have any questions.
Special thanks to Nick (@Nick42_for_win) for the assist with translating our Market Pulse indicator for TV traders.
