The Ergodic indicator is a Vertex FX indicator used in cycle market trading.
It is based on typical price difference between current typical price and R bars ago, which is smoothed twice. It comprises of two components, the main indicator (RED histogram) and the signal indicator (YELLOW) which is the SMOOTH period EMA of the main indicator.
We first calculate the difference in current typical price and the typical price R bars ago. Similarly, the absolute difference of the two is also calculated. This value is smoothed twice using S period EMA and then U period EMA, and the ratio of the two is calculated. This is the main (RED histogram) signal. Further, this main signal is smoothed using SMOOTH period EMA.
The concept behind this indicator is that changes in prices are captured and smoothed. In a trending market, the change in price is continuously increasing (since the market is trending). When this change reaches a peak, the market is reached end of the trend cycle.
BUY - Enter BUY when both RED and YELLOW lines have reached negative extreme and have started to rise gradually.
SELL - Enter SELL when both RED and YELLOW lines have reached POSITIVE extreme and have started to FALL gradually.
It is based on typical price difference between current typical price and R bars ago, which is smoothed twice. It comprises of two components, the main indicator (RED histogram) and the signal indicator (YELLOW) which is the SMOOTH period EMA of the main indicator.
We first calculate the difference in current typical price and the typical price R bars ago. Similarly, the absolute difference of the two is also calculated. This value is smoothed twice using S period EMA and then U period EMA, and the ratio of the two is calculated. This is the main (RED histogram) signal. Further, this main signal is smoothed using SMOOTH period EMA.
The concept behind this indicator is that changes in prices are captured and smoothed. In a trending market, the change in price is continuously increasing (since the market is trending). When this change reaches a peak, the market is reached end of the trend cycle.
BUY - Enter BUY when both RED and YELLOW lines have reached negative extreme and have started to rise gradually.
SELL - Enter SELL when both RED and YELLOW lines have reached POSITIVE extreme and have started to FALL gradually.
Aucun commentaire:
Enregistrer un commentaire