☑Limitations of Using Volume Weighted Average Price (VWAP)
While some institutions may prefer to buy when the price of a security is below the VWAP, or sell when it is above, VWAP is not the only factor to consider. In strong uptrends, the price may continue to move higher for many days, without dropping below the VWAP at all, or only occasionally. Therefore, waiting for the price to fall below VWAP could mean a missed opportunity if prices are rising quickly.
☑Other VWAP trading methodologies
With the above limitations, you may use some other VWAP trading methodologies being used by other traders to minimized missed opportunities or even better... a high probability setup.
✦ MIDAS approach by Dr. Paul Levine
Use the VWAP approach by Jperl (If I'm not mistaken, his name is Jerry Perl), together with Volume Profile indicator.
Others use the anchored approach (sometimes using two VWAP indicators) wherein it anchored the VWAP based on the last significant move or based on sessions (NY session, London session, Asian session...)
※Traders Dynamic Zones (TDZ)
This indicator is a TDI variation known as Traders Dynamic Zones (TDZ)
✔ Fused functions & features below:
☛ Dynamic Zones by Leo ZamanskyPhd. and David Stendahl
☛ Jurik filter - phase, smoothing and
☛ RSI-Trend Strength Index (RSX) by Mark Jurik.
☛ Better & Best Formula (Better & APB calculation)
☛ Uses Hull MA (by Allan Hull) but this one is a variation from Low lag to zero-lag
☛ With Ehler's Deviation-Scaled Moving Average (DSMA)
☛ Divergence - Regular & Hidden divergence (shows inside the indicator window only)
☛ Work speed or update control ─ update on a new bar or use timer control
☛ Smart MTF Mode - update speed feature is not activated while on MTF mode
☛ Recommended TF: H4 & D1 TF
☛ Now, best use with Volumes on Main Chart indicator - recommended for indicator trigger/update action
✔ Dynamic Zones─ The Dynamic Zone indicator is best explained by describing how it solves a common trading problem.
Extreme investing employs the use of oscillators to exploit tradable trends in the market. This style of investing follows a very simple form of logic: only enter the market when an oscillator has moved far above or below traditional trading levels. However, these indicator driven systems, lack the ability to evolve with the market because they use fixed buy and sell zones. Traders typically use one set of buy and sell zones for a bull market and substantially different zones for a bear market.
Herein lies the problem. Once traders begin introducing their market opinions into trading equations, by changing the zones, they negate the system's mechanical nature. The objective is to have a system automatically define its own buy and sell zones and thereby profitably trade in any market -- bull or bear. Dynamic Zones offer a solution to the problem of fixed buy and sell zones for any indicator driven systems.
✔ Jurik Filters, Phase, and Smoothing
This TDI version uses JMA's (Jurik Research Moving Average) phase and smoothing calculation. Have you noticed how moving averages add some lag (delay) to your signals? ... especially when price gaps up or down in a big move, and you are waiting for your moving average to catch up? Wait no more! JMA eliminates this problem forever and gives you the best of both worlds: low lag and smooth lines.
Ideally, you would like a filtered signal to be both smooth and lag-free. Lag causes delays in your trades, and increasing lag in your indicators typically result in lower profits. In other words, latecomers get what's left on the table after the feast has already begun. The JMA's improved timing and smoothness will astound you.
JMA is a powerful adaptive tracker that can smooth time series data with a very small lag, no overshoots and no oscillations. The algorithm is stable and avoids the complexities of neural networks. JMA delivers the best all-around performance for smoothness, accuracy, and timeliness.
✔ Hull Moving Average
There are many types of moving averages, the most basic being the Simple Moving Average (SMA). Of all the moving averages the SMA lags price the most. The Exponential and Weighted Moving Averages were developed to address this lag by placing more emphasis on more recent data. The Hull Moving Average (HMA), developed by Allan Hull, is an extremely fast and smooth moving average. In fact, the HMA almost eliminates lag altogether and manages to improve smoothing at the same time.
WithTDZindicator combined with Hull MA variation with Jurik filters, and phase & smoothing that ultimately eliminates lagging.
✔ RSI-Trend Strength Index (RSX)
RSI is a very popular technical indicator because it takes into consideration market speed, direction, and trend uniformity. However, its widely criticized drawback is its noisy (jittery) appearance. The RSX retains all the useful features of RSI, but with one important exception: the noise is gone with no added lag.
✔ Vertical Horizontal Filter (VHF)
Vertical Horizontal Filter (VHF) was created by Adam White to identify trending and ranging markets. VHF measures the level of trend activity, similar to ADX in the Directional Movement System. Trend indicators can then be employed in trending markets and momentum indicators in ranging markets.
✔ Deviation-Scaled Moving Average (DSMA)
The new DSMA made by John Ehlers and featured in the July 2018 issue of TASC magazine. The DSMA is a data smoothing technique that acts as an exponential moving average with a dynamic smoothing coefficient. The smoothing coefficient is automatically updated based on the magnitude of price changes. In the Deviation-Scaled Moving Average, the standard deviation from the mean is chosen to be the measure of this magnitude. The resulting indicator provides substantial smoothing of the data even when price changes are small while quickly adapting to these changes.
✔ RSI & RSX haDelta
haDeltais a simple formula originally developed and published by Mr. Dan Valcu. The idea behind haDelta is to quantify HA candles. By doing this, one can measure momentum and this is very important when you use haDelta for reversals. It measures the difference between HA Close and HA Open. Caution: High sensitivity if used.
✔ Divergence - Regular & Hidden divergence
☛ Don't trade with divergence alone... You may need to validate this with your own proven trading edge.
※Volumes on Main Chart indicator
This indicator is a Fused version of the following indicators... initial version of volumes on the main chart bymladenand Paul Hayes Scalper volatility indicator ported from cTrader platform.
Added Fused functions & features:
☛ volumes & volatility alerts with optional user-defined values.
☛ auto-adjusted zoom in/out for volume bars and location
☛ automated average volume bars based on daily, weekly and yearly with optional user-defined values
☛ auto-adjusted volume bars thickness
☛ with a hidden navigational switch to hide/unhide volume bars and
☛ added extra .wav alert sound files
Most of these indicatorsrequirethe Volume on Main Chart indicator wherein it acts like the global control center (indiON & OFF). Sorry, that is what it is, designed to work with each other. Like for exampleTDZindicator... the Volume on Main Chart trigger the update process once the volatility spikes up based on the last average pip count (e.g. from three previous bars ─ set TF or example 1-minute candle). And this besides from the normal trigger of set time in minutes or on a new bar.
☝ If v2v system/indicators don't seem to work on your end or found it useless, simply move on as there are literally thousands of other systems/indicators out there . . . and this may not be ready for you or is not for you!
✌ On how to use the system effectively will depend on your own utmost keen observation (or greater experience), due diligence, understanding, and prerogative. Hence, this may not be recommended for noobs... especially when using the VWAP &TDZindicator, and even more with Pivot Fibs plus.
