PZ Lopez Impulse
PZ Lopez Impulse indicator evaluates volatility and price directionality simultaneously. It is an extremely easy to use indicator.
- The blue histogram represents the bullish impulse
- The red histogram represents the bearish impulse
- The gray histogram represents the current volatility
- The moving average is the average volatility
The trading implications are straightforward.
- You can buy when the bullish impulse exceeds the average volatility (blue histogram > moving average)
- You can sell when the bearish impulse exceeds the average volatility (red histogram > moving average)
PZ Lopez Impulse algorithm finds the following events:
- Sudden price movements which are likely to be trend changes in higher timeframes
- Large hammers and shooting stars price patterns with a lot of market participants involved
- Meaningful breakouts with a lot of market participants involved
Other usage of the indicator is to analyze and predict market volatility, which behaves in a wave fashion.
The averaging period is the volatility average to trigger a signal. All other inputs are alerts related.
Filtering of trades can be done using the following tools:
Arturo López Pérez, private investor and speculator, software engineer and founder of Point Zero Trading Solutions.