Discussion of article "Price velocity measurement methods"
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New article Price velocity measurement methods has been published:
There are multiple different approaches to market research and analysis. The main ones are technical and fundamental. In technical analysis, traders collect, process and analyze numerical data and parameters related to the market, including prices, volumes, etc. In fundamental analysis, traders analyze events and news affecting the markets directly or indirectly. The article deals with price velocity measurement methods and studies trading strategies based on that methods.
Trading strategy 1
To test the first method based on measuring velocity as a number of passed points per unit of time using Average Speed indicator, the filter showing a trend direction should be added to the tested strategy since the indicator displays the number of points per unit of time regardless of the trend direction.
I decided to use Coordinated ADX and MACD (CAM) indicator as such a filter. The trading strategy will look like this:
Fig. 6 visualizes opening long and short:
Fig. 6. The trading strategy's entry conditions
Author: Alexander Fedosov