We seem to have some signal processing guys in this thread.... Take the rate of the rate of change of price which is acceleration a.k.a. gamma. An impulse spike in the rate of the rate of change indicator means that the options just got more premium injected into them.
TD ROC that I use, as recommended by Tom Demark is ratio derived meaning Close / Close [x nbr bars ago] * 100. Then my preference is to use a length of 60. For a long while I used 10 but even on a one minute basis I found 60 works well - smoother without missing signals. Long reversals when it below 100 and short reversals when it is above 100, also comparing current reading to prior swing high/low readings and highest/lowest reading overall on the session.
Which is why you should read "Whiter is Brighter." It explains why a 2 day ROC is preferred over a 1 day.
%% Good points; another big problem is most any animal has 2 or 2+ horns, not one horn Since unicorn = also slang for huge profit start up co; I avoid chasing IPOs or only one moving average = too average .Who wants to be average or less than average?? Not me
I did a little testing with various MAs and personally did not see anything a trend line won't tell...maybe just me idk idc. I do see value in things like: "desired movement to capture" and study it with the goal of predicting volatility expansion(1), and direction(2); Trend Average ($) & (duration) to give you a general idea on what to expect. If the primary instrument you play moves on average ~1.5 points per day in a micro trend like fashion...for an average duration of ~125 min...why tf are you either losing money, or barely scraping by on a few ticks a day? What generally happens before the move and why are you entering on the last 30% instead of the first thirty? Why are you normally entering AFTER vol has already expanded to probably its highest level? These types of questions I think are worth the time to answer. disclaimer: Up to this point i'm a loser on balance so there is a good chance i'm way off and have no clue wtf i am talking about.
Yeah but I asked what is a one ROC, whether or not subtraction or division is used? Because in my mind a 1 day ROC is just price compared to 1 day ago. No? And what's the use of that?
%% THAT could work well\ or study + understand movin' averages + figure out the market cycle. IF only all was like SEPT sells or buy tech ETFs in 4th quarter above 200dma
Measuring the market dominant cycle and then using that data to adjust or tune indicators is what John Ehlers was all about for the past 20 plus years. However, if you read his last interview with S&C, he basically dismisses cycle measurement. He believes cycles are too ephemeral in price data and just too difficult to measure accurately. Of course he states this after just retiring.