I am glad you like it friends... I think it has a great potential because basicly it takes simple clasic concepts and takes them to the next level...
Let me continue here a little more...
So what will be our "trend definition" for this trend trades ? simple, we will take this black line (VMA) and the last Ema of the vma the Magenta line and say:
UP trend = Black > Magenta
DOWN trend = Black < Magenta
Woooow great reasoning ¡¡¡ jejejej.... but notice that thanks to the horizontal efect, the black line will have a smooth performance in relation to the magenta line and we will rarely see whipsaws going on between both...
The normal scenario on a chop situation being both average near looks like this :
Notice on the above chart how we have two chop areas going on (cyan rectangles), but look how they are in two clear trend definitions black above/below magenta... giving us some clear understanding of trend... even on this unclear (for other traders) scenario... we had a simple bias established...
So this is our trend definition, cant get more simple... and it has embeded the great advantages of noise reduction thru the "horizontal efect" of this great tool...
Tomorrow I will keep posting on momentum giving quality to our trend... (the rainbow in action ) cheers Walter.