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Hi,
I'm looking for code that I can utilise to try build a velocity /
acceleration type indicator in MS. I've been searching the web and I
can find generic algorithms but little code to adapt. Kaufman in
"Trading systems & methods" p151 explains the calculation and I'm
sure if I pondered long enough I could work it out but I can't help
feeling I'm reinventing the wheel and someone must have done this
before and applied the concept to securities trading.
All I've come across so far is
http://www.purebytes.com/archives/omega/1998/msg13228.htm
A proprietary indicator I've come across is called VellAcc in
Primechart's Market Master (using defaults of 5,8) but they give no
hint as to how it is constructed. A quick explanation is:
"The Vellacc (velocity acceleration) indicator can significantly
improve trading efficiency. Velocity/Momentum by itself works well
with long trending markets, while acceleration is suited for
undulating trading markets. The combination may work uniformly well
in both markets, producing small profitable trades and few (equally
small) losses in trending and trading markets. The net effect could
be a steady, consistantly lower risk growth of trading capital.
The idea of this indicator is to many two methods that work well
individually, but have weak points. Acceleration and velocity can
supplement each others' weaknesses and together produce a smoother
performance. Theoretically, profits should increase over the
performance of each separately. Acceleration basically tips off that
prices are potentially
ready for reversal, while velocity confirms that the action is going
to take place. Acceleration alone may give many potential turns which
do not carry through and are false (they are just plateaus in the
current trend). Likewise, velocity could turn sharply or could just
be profit taking in the current trend, without any groundswell in the
new direction (acceleration is non-existant or not strong in the new
direction)."
Any other ideas/sources anyone has come across on this topic?
Thanks
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