v2v dynamic trading system: ...Updates
Montauk Edition
v2v MomenTicks:
Now with... Tick Volume Indicator ( TVI ) by William Blau in his book "Momentum, Direction and Divergence" (1995). If you like to learn more, we advise you to read this book. His book focuses on three key aspects of trading: momentum, direction, and divergence. Blau, who was an electrical engineer before becoming a trader, thoroughly examines the relationship between price and momentum.
TVI is calculated according to this formula:
TVI = 100 x (DEMA(UpTicks) - DEMA(DownTicks))/(DEMA(UpTicks) + DEMA(DownTicks))
Typical Usage:
The TVI helps identify whether buyers or sellers are in control. If the TVI is trending up, it indicates that buyers are in control. If the TVI is trending down, it indicates that sellers are in control. If the TVI is above zero, it indicates that net buying has taken place over the time period displayed. If the TVI is below zero, it indicates that net selling has taken place over the time period displayed.
If a large number of trades are taking place at a specific price level (i.e., a flat spot forms on the tick chart) and the TVI is rising (falling), look for the price to break out on the upside (downside).