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VEL on VEL
The power of using low-lag, ultra smooth indicators is that you can safely experiment with feeding one indicator to another without signal degradation. Here is an example... The "VEL on VEL" indicator feeds the output of VEL on price to another VEL and plots a blended combination of the two. This approach allows you to analyze momentum, acceleration, or some combination of both. When analyzing pure acceleration only, the indicator may appear to be moving in the opposite direction of the market. This is because acceleration is the 2nd derivative in time, and when applied to a sine wave, the 2nd derivative produces the negative sine wave. Here we see the indicator in two different display modes.
The chart below shows the VEL-on-VEL oscillator set to analyze mostly momentum. To this chart we added a simple strategy designed to enter LONG when the indicator crosses above the lower band and exits when it crosses below the upper band.
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The trading strategy shown above is NOT included with the Jurik Technical Indicator Toolset.
This was shown for demonstration purposes only.
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