Quote from momotrdr:
Harry-
I've been working on something for a while now on the side.
Funny you should post this info here now. The mathematics of which, I haven't pieced all together yet. However, the interdependancy on Time and price by which one chooses weighting has interesting implications.
Here is a snapshot of page one summary of a theoretical model I'm working on. Although bear in mind this is simply the rough draft and its original primary functionality I intended to be used by first year traders and/or complete newbies.
However, a more complex indicator can be built off the foundation.
I've marked out certain numerical values. Pls. ignore those.
TVI
Theoretical Very Strong Market Indicator
Premise: Plotting of a psychological indicator, based primarily on time-as the method to determine overbought or oversold conditions and secondly on price movement. Its main purpose being to maximize a traderâs profitability on a trade taken in a VSM, where other indicators would suggest premature exits.
Concept I: Forward movement , being defined as sideways âor- Downward/upward price action between the Lower/upper xxMA zone band, and Above/below the xxxpt. MA
Function: Increased plotting speed of the TVI, toward the O/B state, with respect to; time, cumulative length of move, and impending congestion
Concept II: Trending movement, defined as sideways âor- Downward/Upward price action outside the xxxMA
Function: Decreased Plotting speed of the TVI, toward the Overbought/Oversold state, with respect to; time, length of move, and congestion
Concept III: TVI Flat, indicator will still plot but only in a true sideways direction with flat plot I.D. marks on the indicator itself. TVI will plot flat only when price action occurs between the upper band of the xx Zone and the xxpt. MA itself.
Function: To keep the trader in the trade as long as possible, until the VSM is truly exhausted
Concept IV: Open and Close price action above or below the xx zone, a.k.a. xx Xing Marks a change in TVI direction and the ending of the VSM move
Function: confirmation to exit the trade and look for a change in the underlying trend
I'd really like to talk to you more about your theoretics background.
-momo