One thing that has always stumped me with ROC style indicators, is at what point in time do you start the calculation from? Traditionally this is the beginning of the daily candle (or when LIBOR is set 11am London time), but this is really just an arbitrary point. In saying that, choosing another point is also just as likely to just be arbitrary too.
Good point! Let me extend that question of yours a bit: what’s the point about ‘traditional’ daily candles anyway? In a 24/5 market, wouldn’t session candles be more useful? Look at my latest pic: one candle for London/New York, and another one for Sydney/Tokyo, both of them watched through an M5 microscope. To be honest: until two or three days ago, when I followed G’s and Balrog’s suggestions to reset CS values per session, I completely underestimated the quality of this kind of view. It clarifies what’s happening inside a trading session, which until now is a ‘natural’ rhythm of the markets. Doesn’t mean that daily rhythm will last forever, though.
Is there a better way to show ROC by not zeroing?? How about a rolling period i.e. calcs are always made from a start point of N bars earlier.
A combination of both might be the best solution. I’m trying to explore this … s.
BIG YES and TRUE. Bars or candles are just a “time-lapse” representation of market action and there is no other meaning to their “patterns” and “rules”… I know that this seems and sounds a very un-orthodox statement, but that’s the fact. For every bar/candle “pattern rule” I can show you two that the “rule” is not valid. Those candle/bar pattern are “borrowed” from the Stock and Commodities markets, and not relevant to the very different Forex auction market. simplex: The MA per session request is related to the Volume indicator and not the CS – if there is some misunderstanding here. G.
True Bars/Candles and Market Sentiment
The attached screenshot is a true bar/candle representation of market movements, regardless of time.
As you can see, from the leftmost blue “candle” the market sentiment is DOWN.
Each UP (blue candle) didn’t succeed to move beyond ~half (or 50%) of the previous major move.
Market setiment is regarded as changed if it breaks that ~50% level.
Finally, the current UP range was broken down, giving two early “warnings” (wicks breaking out first).
(rightmost bar is not finished, just drawn till breakout).
G.
Edit: The DOWN market sentiment continue… added _result real-time result screenshot.
