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No matter what your bias, no matter what the pattern you see, no matter what your indicators say --- when a market has formed a tight equilibrium at the VWAP level: once a market has broken away from this level, keep your trades in the direction of the coil break. |
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Sorry to have to disagree with you on this Dogpile, but there is more to it than just a break away from the
VWAP, tight coil or otherwise. You would be correct if the
skew was in the same direction as the breakout, that is < 0 for a short or > 0 for a long. Under any other conditions (skew =0 or breakout in the opposite direction to the
skew) you could be in deep doo doo. I've have yet to discuss either of these two other situations, but they will be discussed in future threads of "Trading with Market Statistics"