Tuesday, April 06, 2010


As promised last Thursday, here's a peek at what I call the PP+ indicator. It tracks the baseline pivot PP against the R1-S1 daily range and therefore provides a daily update of how volatility is fluctuating in the face of either rising or falling PP momentum. And, as expected from those who've followed me for a while, I've added a few nuances to the algorithms to smooth the indicators and enhance signal reliability.
The utility of this indicator is very straightforward. Think of the PPP (yellow line) as a signal line for PP momentum. When the PPR (white line) signal line crosses the PPP the odds of a successful trade in the direction of the signal line slope increase substantially. I've annotated a few bullish and bearish signals on the chart above. The crossovers are clear in most cases although there are incidents of congestion as seen around Dec 1st.
I've considered that problem a bit and the result is a confirming indicator that is also shown on the chart (the cyan line), which I've termed the BZV (I'm trying to get as much mileage out of this BZB thing as possible), which is really a derivative of the QQV (in the case of the Qs) and is still a work in progress.
Meanwhile, I consider the PP+ to be a tradeable daily indicator in much the same manner as my ole reliable VIXEN daytrading setup, although the signal confirmation indicators are a little different. That's a topic for additional research but I'll touch on a few of my favorites later in the week.
The TS2000i code for the PP+ is shown below. Astute readers will notice some realignment of the code language as well as a smoothing factor for the range differential that has not been applied to the PP calculations. The zero line function has also been deleted since the focus of our attention is only the signal line crosses.

1 comment:

forex-cat said...

Your article is always useful.