Dimitri wrote: Fri Aug 10, 2018 6:29 am Dear Krelian,
Thank you for your prompt and clarifying answer ...
There is also an ambiguous point within the file you have attached ... if you have the experience and knowledge to give the correct "rule" it would be of great help avoiding misunderstandings ... Thank you again for all ... (i am attaching the related picture ...)
Best Regards
Dimitri

Oh, I didn't read it to the end. Good you did
There is a saying: "Markets take the stairs up and the elevator down." That's the idea behind it. The volatility is bigger at bullish markets. For me and in the sense of the paper the pic description must be changed into:

Most of the market lows come when the stochastic of the WVF posts a reading above 80 percent while most of the market highs come when the index is below 20 percent.

Mostly, the saying is correct for FX, but we have a double-sided auction. That means a Buy of the base currency is a Sell of the quote currency at the same time. The rule to use the VIX has a problem when the price takes the elevator up (elevator for the quote currency). The VIX measures the volatility, up and down. In relative terms there is a smoothing to avoid that problem but not all events can be avoided. That must be the moments when guys say: "Today I lost the earnings of a half year." That's why it's always good to use a SL and one or two confirmations for your trading idea. The EMAs filter quiet well, IMO. Intraday you have those events more often, of course and there are nice Buy opportunities with raising VIX. As we always say: Make your own trading rules and only get inspired by others