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Vwb Chapter 3 Study

  • #21
  • Feb 11, 2006 1:40pm Feb 11, 2006 1:40pm
Quoting HeavyJ
Hi Jotty,

I can't and won't tell you what it means. I can tell you what I see as I study and I will gladly. By all appearences the Fib Band "tension" and the WM "pressure" are 2 distinctly different "forces" which can "align with" or "oppose" each other in varying degrees. Very Dynamic! also we must remember that Weekly Momentum lags, considerably, the price action which VWB-Black Dot entries are predicated.

Still...... From my chair, WM cannot be overly discounted.

Hope this helps.

Chart below is typical for the "Cable" from my observations!

Best of Luck
HJ
Outstanding HJ !! Your analysis makes perfect sense.. As Dial said, when properly used, this will give killing advantage and provide oppurtunities to be in market all the time !!! Keep them coming !!!


Shan
  • #22
  • Feb 11, 2006 1:45pm Feb 11, 2006 1:45pm
Can you confirm that what I think is what you have found in your new research.

1) If the weekly is pointing down "Bearish" and the daily is below the channel and somewhere on the 3rd fib line, The fib line has become the rubber band that has been pulled back to the point of exhaustion.

2) When the Catapult "rubber band" goes off the chance of going past the channel is much less, because the weekly is in a downtrend and because of that better book 50% of those profits near the channel.

3) If the weekly were in a "Bullish" trend and we were at the below the channel the chances are much higher that it is going to break through the channel to the other side.

Is this thinking correct?
  • #23
  • Feb 11, 2006 2:18pm Feb 11, 2006 2:18pm
Quoting diallist
Brilliant! Absolutely brilliant! HeavyJ, your concept of marrying the two distinct directional "forces" of the WM and the VWB in either opposing or aiding blends to get a feel for the chance of bounce off the DT or penetration through it are very useful. You've struck gold with this one dude!

If this continues to be as reliable as your backtesting shows, then counter-trend trades of the V4T will add a lot to profits.

In my neck of the woods, only a guy who is built like arnold can get away with wearing a pink shirt. So, only a man who is brilliant can get away with calling himself a Bonehead! I'm not sure I'm smart enough to be a genuine Bonehead, so can I be an honorary Bonehead instead?

Dial
I can't add anything more to above. That's right, absolutely brilliant HeavyJ. I closed my longs in cable around the daily tunnel (1.7565) on Friday and was contemplating to go short before finally giving up and retiring for the weekend. If you posted your discovery on Thursday I would've gone short right were I closed longs without blinking. Weekly in cable just changed to 'down' a couple of days ago.
  • #24
  • Feb 11, 2006 2:19pm Feb 11, 2006 2:19pm
HJ,

Could you please clarify this..

How do you specify the WM trend change. Do you consider the slope change of 5 sma on weekly chart or the diff bet 5 and 21 start reducing and increasing. You have specified exact date of WM trend changes which I'm not able to figure it in weekly charts. Would greatly appreciate if you post weekly charts and put the WM trend change lines and explain how to determine the trend change dates.

Thanks !
Shan
  • #25
  • Feb 11, 2006 2:25pm Feb 11, 2006 2:25pm
Quoting lambrechtj
Can you confirm that what I think is what you have found in your new research.

1) If the weekly is pointing down "Bearish" and the daily is below the channel and somewhere on the 3rd fib line, The fib line has become the rubber band that has been pulled back to the point of exhaustion.

2) When the Catapult "rubber band" goes off the chance of going past the channel is much less, because the weekly is in a downtrend and because of that better book 50% of those profits near the channel.

3) If the weekly were in a "Bullish" trend and we were at the below the channel the chances are much higher that it is going to break through the channel to the other side.

Is this thinking correct?
LambrechtJ

Your descriptions are in line with the evidence I have seen walking through the "Cable". This could be one application as related to VWB.

If this postulate interests you, I suggest you download my chart zip in post #3 (Feb 2002 to present) and look for yourself.....derive your own conclusions...hopefully you will post variations or paradoxes here for the rest of us to see.

NOTE: While I am excited about the prospects of this study. I don't believe it to be axiomatic. Can anything ever really be.....in a marble game? But as for the Cable....It looks pretty Damn good to me.

At this point I consider this study extremely valuable, but look at the charts. It is also very broadstroke! Far from a Red light Green light system. Or a system at all at this point. But I believe it has the potential to strengthen the toolbox of any system!

NOTE 2: After getting a nod from wize council that I could be pursueing something positive here. I felt that I should share it with the group. I don't have a bunch of answers. Some of you will gleen far more from this than I have at this juncture.

But I owe this all to Vegas who has enriched my journey enumerally! He has asked nothing in return and continues to share! I am very greatful. I have vowed that I will make it a principle of mine to ....Pay it Forward.

I can't imagine what it means to Vegas to have made such an impact in the Bonehead community!

HeavyJ
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #26
  • Feb 11, 2006 3:13pm Feb 11, 2006 3:13pm
Quoting vishalshan
HJ,

Could you please clarify this..

How do you specify the WM trend change. Do you consider the slope change of 5 sma on weekly chart or the diff bet 5 and 21 start reducing and increasing. You have specified exact date of WM trend changes which I'm not able to figure it in weekly charts. Would greatly appreciate if you post weekly charts and put the WM trend change lines and explain how to determine the trend change dates.

Thanks !
Shan
Good point Shan,

I think it's time for the Monday morning quarterback to post his playbook!

(BTW- There's a zip file on post #3 with daily charts on the cable back to Feb 2002 including weekly momentum changes : Red vertical bar= "Bear" Green Vertical bar = "Bull")

The weekly momentum data is based on The 4hr Vegas doc. That is, as in your latter suggestion, difference in pip values from week to week based on the bars close.

Dial had asked if I did all those calcs by hand. No I used the lazyass way!

When I first approached this I used Isotonics Tunnel MacD which is very very close and allows for a graghical inteface to mark trends.

As I saw the potential I shifted to a different method.

From MT4 I downloaded OHLC data back to 1996 on the Cable and flew it into an Excel spreadsheet. I tweakd 21 and 5 MA formulas in another column set till they were spot on (EMAs are tricky for boneheads)

NOTE: I also set up another reference column for the Median (HL)/2 calc for the 21 EMA

After manually ploting the first set of EMAs the formulas took over. I then checked values at random on the chart and found the EMAs to be on the money.

For trend change I used the 21ma as a baseline. the difference provided by the 5 ma was plotted on that line (row) in it's own column.

This value was checked for difference from the prior week in it's own column.

From this column I generated a last column: As long as the value was becoming more positive for example, this collumn plots a "+" if the column turns more negative it plots a "-" and signals a WM change which lasts until the value becomes more positive from the prior week and another "+' is plotted. and so on and so forth.

I hope I got this right. You may have to speak Bonehead to understand the methods described.

I will post my spreadsheet here for you and all to review. Mayby some of you programmer types can come up with a better way. I know I would appreciate it

FYI - OHLC Data is from my server: InterbankFX. 00:00 GMT

Good Trading All!

HeavyJ
Attached File(s)
File Type: zip Cable Weekly Momentum History.zip   510 KB | 551 downloads
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #27
  • Feb 11, 2006 4:20pm Feb 11, 2006 4:20pm
Quoting HeavyJ
Good point Shan,

I think it's time for the Monday morning quarterback to post his playbook!

(BTW- There's a zip file on post #3 with daily charts on the cable back to Feb 2002 including weekly momentum changes : Red vertical bar= "Bear" Green Vertical bar = "Bull")

The weekly momentum data is based on The 4hr Vegas doc. That is, as in your latter suggestion, difference in pip values from week to week based on the bars close.

Dial had asked if I did all those calcs by hand. No I used the lazyass way!

When I first approached this I used Isotonics Tunnel MacD which is very very close and allows for a graghical inteface to mark trends.

As I saw the potential I shifted to a different method.

From MT4 I downloaded OHLC data back to 1996 on the Cable and flew it into an Excel spreadsheet. I tweakd 21 and 5 MA formulas in another column set till they were spot on (EMAs are tricky for boneheads)

NOTE: I also set up another reference column for the Median (HL)/2 calc for the 21 EMA

After manually ploting the first set of EMAs the formulas took over. I then checked values at random on the chart and found the EMAs to be on the money.

For trend change I used the 21ma as a baseline. the difference provided by the 5 ma was plotted on that line (row) in it's own column.

This value was checked for difference from the prior week in it's own column.

From this column I generated a last column: As long as the value was becoming more positive for example, this collumn plots a "+" if the column turns more negative it plots a "-" and signals a WM change which lasts until the value becomes more positive from the prior week and another "+' is plotted. and so on and so forth.

I hope I got this right. You may have to speak Bonehead to understand the methods described.

I will post my spreadsheet here for you and all to review. Mayby some of you programmer types can come up with a better way. I know I would appreciate it

FYI - OHLC Data is from my server: InterbankFX. 00:00 GMT

Good Trading All!

HeavyJ
Hey HJ, first, thanks for the detailed info... I think you have sharper bone in your head ;-)

Now, let me talk in the bonehead language.. (my bone is still pretty blunt and working hard on sharping that..)

I have serious problem in understanding the trend direction you have derived in the excel col L of 'All data' sheet. What I understand from vegas 4Hr doc statement is :

<<<<<<<<<<
"Create a weekly chart [bar or candle] of a currency pair. On this chart overlay a 21 EMA [(H + L)/2], and a 5 SMA [(H + L)/2]. Note that the 21 period is an exponential moving average and the 5 period is a simple moving average.

Now, look at the difference between the two. As a market rises over time on the weekly chart, the 5 will rise faster relative to the 21. As the market goes down, the 5 will lose faster relative to the 21. The difference, in pips between the two, measures relative momentum of the market in real time. Each week, as long as the number of pips keeps rising [SMA 5 – EMA 21] from the previous week, the market continues in a bull run. Once a bull run loses pips [SMA 5 – EMA 21] from the previous week, it signals a medium-term top in the market. Conversely, once a bear run loses pips [EMA 21 – SMA 5] from the previous week, it signals a medium-term bottom in the market."
>>>>>>>>>>

When pip value of 5 is greater than 21,

If the absolute delta (absolute diff bet 5 and 21 leaving the minus sign) increases then weekly charts showly UP trend. If abs delta decreases, then we have weekly DOWN tread.

When pip value of 5 is less than 21,

If the absolute delta (absolute diff bet 5 and 21 leaving the minus sign) increases then weekly charts showly DOWN trend. If abs delta decreases, then we have weekly UP tread.

My above understanding does not go hand in hand with your calculation in Column L. Please rub my bone so that I could sharp it a bit.

Thanks,
Shan
  • #28
  • Edited 6:29pm Feb 11, 2006 6:28pm | Edited 6:29pm
Hi HeavyJ
Quoting HeavyJ
I hope I got this right. You may have to speak Bonehead to understand the methods described.

I will post my spreadsheet here for you and all to review. Mayby some of you programmer types can come up with a better way. I know I would appreciate it

FYI - OHLC Data is from my server: InterbankFX. 00:00 GMT
Thank you for posting your spreadsheet.

I've been trying to duplicate your results and this is what I've found.

1. There is a data gap between 2004.12.27 and 2005.02.21

2. The original 4 hr tunnel uses the 5 SMA (Simple Moving Average) and your column J calculates 5 EMA.

In your excellent example here, on '2' where the weekly momentum changes to 'up' was on 25/7/05.

3. The row in the spreadsheet with the date of 25.7.2005 has high of 1.7661 and low of 1.7330. That corresponds with the high and low of the week ending 31/7/05 so the weekly momentum figure for 25.7.2005 would not be available until 31/7/5 and would only be able to trade with that figure on following starting 1/8/05 and not on 25/7/05 as marked on the chart.

It appears that the numbers as being used are currently 'predicting' the future weekly trend by one week. Please let me know if this is not the case.

4. Your calculations use 5EMA rather than 5SMA which puts more emphasis on recent values making it more sensitive to short term trends, which means that the weekly momentum calculation 'swings' quicker than using the 5SMA. Using the 5 SMA, the weekly momentum would turn up at the close of the week of 12/8/05 and the weekly momentum would be up from 15/8/05 onwards.

Let me know if there are any errors in my findings.

Late here so I haven't had time to look at 5EMA versus 5SMA.

Best regards
Alan
  • #29
  • Feb 11, 2006 7:56pm Feb 11, 2006 7:56pm
Hi to all!
I'm newbie(start to study forex 3-4 month ago). Not so far find vegas methods.
I from russia and have some problems in english... its very hard to me to understand posts from forums and study vegas methods. But i'm sitting with dictioanary 12-16 hours in day. Because its the most interesting information, that i can find in my little experience.
Guys, you are GODS! Thanx much!
  • #30
  • Feb 11, 2006 8:02pm Feb 11, 2006 8:02pm
Heavy J,


Maybe I'm wrong, but it seems to me that you are plotting the week before to the momentum change. In other words the momentum change haven't happened yet on the vertical lines on your charts. This is based on a 21EMA (median) and a 5EMA (close).

I created a trade station indicator for the momentum change base on your same parameters ( 21EMA (median) and a 5EMA (close)) and the results don't look to good.

But don't get discourage and keep the good work, i think you are on the right track to find something interesting.

Kester




Kester
  • #31
  • Feb 11, 2006 9:54pm Feb 11, 2006 9:54pm
Quoting HeavyJ
Part 2

When the “Black Dot” & “Weekly Momentum” is aligned the VWB entry tends to cross completely to the opposite extremes. Sometimes a Change in Weekly Momentum will change while a “Black Dot” trade is in progress and further affect the outcome “mid move”

When I explained this to Dial he likened it to a mental image of “opposing winds in the dessert.”
HeavyJ's technique of blending Weekly Momentum (WM) and Black Dots (BD) needs a handle, a moniker, a NAME!!!!

When HeavyJ and I discussed this on the phone last week, I was reminded of opposing winds in the desert pushing a tumbleweed, first one direction, then another. There is a prevailing wind (WM) and a periodic counter wind (BD).

Therefore, I'd like to coin a name for HJ's technique and call it:


"The Wind Tunnel"

sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #32
  • Feb 11, 2006 9:55pm Feb 11, 2006 9:55pm
CAn i get a link to a place where i can download the weekly momentum change?
I tried calculateing it, and it seems the GBP/USD is stil in an up trend
Saw someone posting on here that says it changes to a downtrend on thursday.
Can someone clarify how do you do this please..
thanks
  • #33
  • Feb 12, 2006 12:14am Feb 12, 2006 12:14am
Quoting raczekfx
I can't add anything more to above. That's right, absolutely brilliant HeavyJ. I closed my longs in cable around the daily tunnel (1.7565) on Friday and was contemplating to go short before finally giving up and retiring for the weekend. If you posted your discovery on Thursday I would've gone short right were I closed longs without blinking. Weekly in cable just changed to 'down' a couple of days ago.
Can anyone explain how the weekly in cable just changed to "down" please
thanks, sorry if i ask too many questions but Im still learning
  • #34
  • Feb 12, 2006 2:32am Feb 12, 2006 2:32am
Quoting jotty
CAn i get a link to a place where i can download the weekly momentum change?
I tried calculateing it, and it seems the GBP/USD is stil in an up trend
Saw someone posting on here that says it changes to a downtrend on thursday.
Can someone clarify how do you do this please..
thanks
Jotty,

Since you are a member of the private forum, please read post 4 thru 7 of the Knife - System Description in the Sundial Systems forum. These four posts explain in minute detail how the weekly momentum is calculated and when a change in trend occurs. You have the resources, but it is up to you to study them, practice them and apply them. No one can do that for you, since that responsiblity belongs to you.
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #35
  • Feb 12, 2006 2:44am Feb 12, 2006 2:44am
Quoting diallist
Jotty,

Since you are a member of the private forum, please read post 4 thru 7 of the Knife - System Description in the Sundial Systems forum. These four posts explain in minute detail how the weekly momentum is calculated and when a change in trend occurs. You have the resources, but it is up to you to study them, practice them and apply them. No one can do that for you, since that responsiblity belongs to you.
I did went and look through them carefully, but when i plot the MAs, they got bigger instead of smaller.
  • #36
  • Feb 12, 2006 3:05am Feb 12, 2006 3:05am
Quoting jotty
I did went and look through them carefully, but when i plot the MAs, they got bigger instead of smaller.
Okay Jotty. If you will post in the private forum, in the Knife - Discussion thread exactly how you are doing your calculation, then I'll be able to better see it from your perspective and will be in a better position to help you understand. Try to post a chart example if you can.

Have patience, and I'll help you figure this out in the PF.
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #37
  • Edited 9:03am Feb 12, 2006 8:58am | Edited 9:03am
Quoting jotty
Can anyone explain how the weekly in cable just changed to "down" please
thanks, sorry if i ask too many questions but Im still learning
Jotty, in the pf here you'll find step by step instruction. On the 4hr chart, weekly trend value is calculated dynamically.
Attached Image
  • #38
  • Feb 12, 2006 9:25am Feb 12, 2006 9:25am
Hi HeavyJ

After looking at your spreadsheet a few more times, it's finally dawned on me that you're using 5 EMA Close and not 5 EMA (H+L)/2 as per the original 4 hr tunnel which makes the EMA more sensitive to the 'close' of the week rather than using the high and low of the week.

I've run the formulas through my program and have generated results for the same weeks as you have.

Due to the fact that you are missing data in the spreadsheet from in between the dates of 2004.12.27 and 2005.02.21, it will affect the 21 week ema results. If we assume the effects will last '21' weeks (a mathematician can step in here!) then you can only rely on the results from 2005.07.11 onwards.

In my additions to the spreadsheet, I've used the shorter weekly average - the longer weekly average so if it is higher then the previous week, it means the trend is upwards and vice versa.

From 2005.07.11 onwards the results for the trend direction match exactly except for
1. the start of the week date gave you the data for the end of the week letting you have the impression you can use the weekly trend 1 week in advance.
2. your 2005.12.26 shows a continuing down trend whereas I have on the following week changing to an uptrend. For all the other weeks you've led consistently by 1 week so I can't quite figure out why it didn't happen on this particular week. I've uploaded the spreadsheet as 'work in progress'.

Best regards
Alan
Attached File(s)
File Type: zip Cable Weekly Momentum History-firehorse.zip   523 KB | 443 downloads
  • #39
  • Feb 12, 2006 9:30am Feb 12, 2006 9:30am
Quoting firehorse
Hi HeavyJThank you for posting your spreadsheet.

I've been trying to duplicate your results and this is what I've found.

1. There is a data gap between 2004.12.27 and 2005.02.21

2. The original 4 hr tunnel uses the 5 SMA (Simple Moving Average) and your column J calculates 5 EMA.

In your excellent example here, on '2' where the weekly momentum changes to 'up' was on 25/7/05.

3. The row in the spreadsheet with the date of 25.7.2005 has high of 1.7661 and low of 1.7330. That corresponds with the high and low of the week ending 31/7/05 so the weekly momentum figure for 25.7.2005 would not be available until 31/7/5 and would only be able to trade with that figure on following starting 1/8/05 and not on 25/7/05 as marked on the chart.

It appears that the numbers as being used are currently 'predicting' the future weekly trend by one week. Please let me know if this is not the case.

4. Your calculations use 5EMA rather than 5SMA which puts more emphasis on recent values making it more sensitive to short term trends, which means that the weekly momentum calculation 'swings' quicker than using the 5SMA. Using the 5 SMA, the weekly momentum would turn up at the close of the week of 12/8/05 and the weekly momentum would be up from 15/8/05 onwards.

Let me know if there are any errors in my findings.

Late here so I haven't had time to look at 5EMA versus 5SMA.

Best regards
Alan
Alan & Shan,

Thanx for posting your concerns Both are valid.

As Alan pointed out my calcs were skrewed in my spreadsheet.

The reason they were "spot on" with my charts is because......you guessed it they were skrewed on my charts as well. <Bonehead>

I think Shan had a different concern which I could address but I will wait to see if it is related to the data set.

Am updating now....will post new spreadsheet and charts when completed.

Alan- This definately makes a difference, still too early to judge the impact.

Thanx again for bringing this up

I would rather know the truth than be right.

Film at 11..........................................

HeavyJ
HeavyJ -"Posterboy for Spellchecker!" "Will work for pips!"
  • #40
  • Feb 12, 2006 10:04am Feb 12, 2006 10:04am
Quoting firehorse
Hi HeavyJ


2. your 2005.12.26 shows a continuing down trend whereas I have on the following week changing to an uptrend. For all the other weeks you've led consistently by 1 week so I can't quite figure out why it didn't happen on this particular week. I've uploaded the spreadsheet as 'work in progress'.

Best regards
Alan
Sorry Firehose, I didn't dnld your spreadsheet to check but the date you mention just jumps out at me as boxing day [holiday]. Could that be affecting your Calcs?

B
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