Vertical Horizontal Filter

 

I normally do not use this indicator for signals. Instead I am using this to recognise the trend as a confirmation for my signals.

• Rising values confirms continuation of a trend. (Uptrend or downtrend)
• Falling values indicate a ranging market.
• High values: Potentially end of a trend.
• Low values: Maybe start of a trend.

A volatility indicator can help you in interpreting this indicator as in a more volatile market the range will be wider!

Ultimate Oscillator

 

Buying Pressure (BP) = Current Close – Minimum (Current Low or Previous Close)

 

Ultimate Oscillator = 100 x [(4 x Cycle1) + (2 x Cycle2) + Cycle3] / (4 + 2 + 1)

 

Calculation

If:

·         Cycle 1=7

·         Cycle 2=14

·         Cycle 3=28

Then:

Ultimate Oscillator = 100 x [(4 x Average7) + (2 x Average14) + Average28] / (4 + 2 + 1)

 

Overbought and oversold signals:

In an uptrend:

Buy when the indicator rise above oversold line.

In a downtrend:

Sell when the indicator falls below the overbought line.

Divergence signals:

Buy signal normally at the end of a downtrend: Wait for the bullish divergence in the market. This means, the price should make a lower low, but the indicator should display a higher low.

Sell signal normally at the end of an uptrend: Wait for the bearish divergence. This means, the price should make a higher high, but the indicator should display a lower high.

Asset allocation

Is diversification enough to achieve the investment/trading goals?

No! You should not go and invest in a 1000 different stocks and think thus is the best approach. 

Asset allocation is another important part of a good strategy. 

To allocate your money towards different assets, you should consider the following:

   Your risk tolerance 

   Targeted performance 

   Meeting your investment wealth objects.( maybe more money in your pocket)

Strategically you should think long term : 

This means you should decide which asset classes you want to invest in and how much.

Example:

You may have 50% Stocks 

40% bonds and 10% cash long term

Tactically you may change the allocation to meet short term goals. These can be achieved by taking advantage of temporary market situations. 

Example:

Asset manager may realise that stock will underperform in short term then changes the allocation in short-term to achieve wealth objectives. 

They may decide to change the allocation in short term to 30% Stocks 

50% bonds and 20% cash(Or Cryptocurrencies or FOREX)

#forex 

#gold