"Market Breadth Primer" Posts
Market Breadth Primer: VIX Phenomenon 2017 Edition
By Lawrence
I wrote about the Volatility Index (VIX) several years ago explaining why it behaves the way it is. I also presented the idea that understanding the players in the trading game is more important than focusing just on the technical details like the Greeks in option trading. And here we are, in year 2017 where […]
Market Breadth Primer: Market Breadth Analog Forecasting Method
By Lawrence
Classic approaches to the interpretation of market breadth data are mainly based on signal generation and recognition of outlier events. The reason for market participants to do that is obvious – the indicator got to produce something of immediate value to be considered as useful to the creator. What can be more convincing than having […]
Market Breadth Primer: Advance / Decline Ratio and Advance Issues Percentage Conversion
By Lawrence
Different data feeds offer different favour of the advance decline data to their customers. However, not all trading platforms are capable of letting the users to conduct calculations directly from multiple data series. Hence, odd combinations of the advance decline data are often provided as a workaround for the traders. These vendor provided ratios may […]
A Robust Method To Interpret Advance Decline Issues
By Lawrence
Advance Decline Issues, by its very natural, is noisy. Its values can be jumpy from day to day making it hard to interpret the information offered by the market breadth data. I am going to demonstrate a neat way to utilize the data that overcome the weaknesses in classic advance decline issues based indicators. This […]
Market Breadth Primer: Advance Decline Line Explained
By Lawrence
Many traders have heard of Advance Decline Line. It is even reported in major financial news media. Most of the time, people focus on the divergence of the index levels against the Advance Decline Line as signals to potential trend change. This is not quite what the breadth indicator is designed for. I will explain […]
Market Breadth Primer: Advance / Decline Issues Bear Strike (Signal ID: AD Bear Strike)
By Lawrence
Advance / Decline Issues Bear Strike is a day trading model based on real-time advance / decline issues. It is a very consistent mechanical trading model and a useful trading setup for discretionary traders. Similar to the Advance / Decline Issues Bull Charge signal, AD Bear Strike takes advantage of the leading nature of the […]
Market Breadth Primer: Advance / Decline Issues Bull Charge (Signal ID: AD Bull Charge)
By Lawrence
Advance / Decline Issues Bull Charge is a day trading model based on real-time advance / decline issues only. It is not only a very consistent mechanical trading model. It is also a very useful trading setup because it helps the traders to realize that the day is different which requires special attention and considerations. […]
S&P500 20 Days New Low Bullish Reversal
By Lawrence
Here is a breadth driven trading model based on S&P500’s 20 days new low market breadth data. It is not something complex and everyone can follow easily. It performs very well with reasonable drawdown. For those who are not familiar with the concept of market breadth, please read my article series, Market Breadth Primer. 20 […]
Market Breadth Primer: Forex Majors And Their Surprising Correlations With Historical Volatility
By Lawrence
Traders often talk about volatility. Many brokerages even offer volatility reports on various timeframes across all the forex pairs as a service to their clients. People talk about volatility because they think that if they know something about the volatility they can find better trading opportunities when the volatility picks up. They also like to […]
Market Breadth Primer: The VIX Phenomenon
By Lawrence
Majority of option traders who understand options tend to focus on the mathematics of VIX while the chart traders who trade S&P 500 Index futures tend to focus on the chart patterns and confirmation signals from VIX. Who is right? Who understand VIX better? Here is a short piece on the VIX Phenomenon that no […]
