Weis Wave-Wave TypesWeis Wave - Waves Types indicator
The Concept
This indicator has been created based on David's Weis theory of cumulative volume histograms but this indicator has been enhanced with additional wave types to be able to identify the following:
Visually identify the Effort vs Result concept (too much volume but small pip move or small volume too large pip move). Imbalance of Supply and Demand.
Be able to monitor how volume progresses within the wave, if it is increasing, decreasing or staying steady.
Identify easily the large volume waves using the emphasized volume algorithm to analyze the price reaction afterwards following the theory that Institutions participate on large volumes
What it does
This indicator draws cumulative histograms of 5 different wave types. Up swing histogram is when price goes up and down swing histogram is when price goes down. It adds the volume of each bar within the wave swing, it adds the pips of each bar within the wave swing , it adds the time of each bar within the wave swing, it measures if the volume rate is increasing or decreasing within the wave swing and emphasizes on larger volume volume waves by increasing their size for visual purposes.
How it does it
The length of each cumulative histogram is equal to each wave price swing. The price wave sensitivity can be adjusted by AutoSensitivity parameter (min value =2 and max value=11). The larger the number the more sensitive it is, which means more wave swings will be created. The selectable values for the wave type are: Volume, Pips, Time, Progressive Volume Rate or Emphasized Volume. Furthermore the width of the cumulative histogram bars can be adjusted as well as the color of the up and the down swings. Finally divider input values are available for volume and pip to decrease large numbers on the y-axis of the histograms.
Wave Type Detailed Explanation
Volume: the indicator adds the volume of each bar within the price wave swing and creates a cumulative histogram
Pips: the indicator adds the bar distance from open to close and creates a cumulative histogram of the net pip movement of the price swing
Time: adds the time of each bar within the price wave swing and creates a cumulative histogram
Progressive Volume Rate (PVR): measures the volume rate within each wave (if volume is increasing or decreasing or staying steady as the wave progresses)
Emphasized Volume: the indicator adds the volume of each bar within the price wave swing and creates a cumulative histogram but contains an algorithm that emphasizes the large waves.
How to Use
Draw Support/Resistance and Fib - Monitor carefully the cumulative histograms at these levels. Usually supply and demand imbalance happens at this level.
First and most important of all adjust AutoSesnsitivity to get your swings correct. Getting the correct swings means waves are catching the tops and bottoms of each price wave swings.
Then identify potential trades by:
1. Comparison of cumulative Volume histogram vs Pip histogram which makes the concept of Wyckoff "Effort versus Result" identifiable, lot's of volume with small pip move = lot's of effort vs with small result. Supply and Demand imbalance.
2. Monitor Progressive Volume Rate histogram which measures if the volume rate is increasing, decreasing or remains steady within the price wave swing. This histogram indicates more or less participation as price increases or decreases within the specific wave. For example increase of volume rate as price goes up could mean more participation which could mean that sellers might be entering. Also the opposite is valid increasing volume rate as price goes down could mean that buyers are entering.
3. Emphasized Volume waves, provide a visual emphases on large volume waves only, useful for traders that like to trade with high volume trends and for traders that believe that in large volume waves large institutes participate. Trade with price trend but also with the volume trend concept.
What makes it unique
This indicator is an advance cumulative wave histogram because apart the regular volume histogram and apart form using each wave type individually to make a decision it provides more confidence and becomes more powerful when confluence is used combining the other wave types and by using the strategies mentioned above to a higher probability trade. Some examples are shown below
Example of Effort vs. Result Concept
Example of Progressive Volume Rate
Example of Emphasized Volume
Speedindex
Weis Wave With Speed Index SignalsWeis Wave with Speed Index Signals
The Concept
This indicator has been created to try to quantify "Change in Behavior" concept and provide buy and sell based on this concept. What is Change in Behavior? Price is moving at speed rate based on the trading volume direction (buyers and sellers) until there is imbalance of Supply/Demand. An algorithm has been created to identify this change of Supply/Demand behavior producing a number called "Speed Index". Abnormal Speed Index notes this change in behavior when compared with previous Speed Index numbers of the same pair and in the same timeframe. Speed Index is a relevant number and it's use is to be compared with previous Speed Index numbers and not as an absolute number. Based on Speed Index Behavior of recent waves, price and price wave structure buy and sell signals are available called Plutus.
What it does
This indicator draws a waveline of price waves swings. Up swing is when price goes up and down swing is when price goes down. It adds the volume of each bar within the wave swing, it measures the distance in pips of each swing and measure the numbers of bars of each swing. Furthermore, it creates the Speed Index of each swing, the average Speed Index of x selectable wave swings back as well as the average of Speed Index of the x up swings back and the average of the down swing. The indicator is also able to designate a Fast wave which means large pip move with small volume with the letter "F" displayed next to Speed Index and a Slow wave which small pip move with small volume with the letter "S". Finally based on price, Speed Index history and structure it creates eight buy/sell signals called Plutus.
Information available for display all selectable
For each wave swing: Total Volume, Pip Distance, Number of Bars or Total Volume + Pips or Total Volume + Pip Distance+Total Number of Bars
For each wave swing: Speed Index or Total Volume + Speed Index or Speed Index + Average Speed Index or Speed Index+(F or S).
Plutus buy and sell signals when criteria of price location, speed index comparison (abnormal speed index) and wave price structure have been met.
How it does it
This indicator draws a wave-line of price waves swings. Wave Sensitivity can be adjusted by AutoSensitivity parameter (min value =2 and max value=11). The larger the number the more sensitive it is, which means more wave swings will be created. All calculations are based on each wave swing. The code calculates all the above mentioned on the "Information available for Display" section. Based on price, Speed Index history, Speed Index ratio and structure Plutus buy and sell signals are created. The default value of Speed Index ratio is 2. Decreasing Speed Index ratio will create more signals while increasing it will create less signals.
Note: last wave re-paints and no information is displayed on the forming wave, but the whole trading methodology is based on reading previous waves information.
Technical Information
Speed Index
High Speed Index number means a slow wave "S" = Abnormal Speed (high volume small pip move)
Low Speed Index number means a fast wave "F" =Anormal Speed (small volume large pip move)
Normal Speed Index number (are the more frequent numbers seen in the chart which means that the market agrees with the move).
Plutus Signals
PL - Plutus Long, this is when the price will follow in the same direction of the wave with the High Speed Index. When signal is generated we enter when price close breaks the previous two wave structure Resistance Level
PS - Plutus Short, same as above, this is when the price will follow in the same direction of the wave with the High Speed Index. When signal is generated, we enter when price close breaks the previous two wave structure Support Level
PRL - Plutus Reversal Long, this is when the price will go in the opposite direction of the wave with the High Speed Index.
PRS - Plutus Reversal Short, same as above, this is when the price will go in the opposite direction of the wave with the High Speed Index.
PFL - Plutus Fake Long, this when price will do a fast break of the previous down swing bottom and then comes back within the previous swing range (fake break)
PFL - Plutus Fake Short, this when price will do a fast break of the previous up swing top and then comes back within the previous swing range (fake break)
WU - Wyckoff Upthrust plutus (short signal)- this is when the last two swings resemble(are) Wyckoff's UpThrust pattern price swings. This resemblance together with Speed Index criteria and price break of structure create this signal.
WS - Wyckoff Spring plutus(long signal)- this is when the last two swings resemble(are) Wyckoff's pattern price swings. This resemblance together with Speed Index criteria and price break of structure create this signal.
How to use it
Draw Support/Resistance and Fib - usually supply and demand imbalance happens at his level
First and most important of all adjust AutoSesnsitivity to get your swings correct, meaning that are catching the tops and bottoms of each price wave swing.
Monitor Speed Index behavior. Be alerted from Abnormal Speed Index number. You can also set using the Extreme Threshold parameter that provide you an alert if the current Speed Index is above or below average Speed Index of x waves back and also meets the min and max bar criteria. For example if we would like to be alerted for a an Abnormal Speed Index of a Slow wave of at 3 bars then we have set the Min Slow Bar parameter to 3, the Extreme Threshold parameter to 0.5 (50%) and the Avg Waves back to 8 then an alert will be produced if the wave before the forming has at least 3 bars and the Speed Index of the wave is 50% higher than the Average Speed Index calculated from 8 waves back. For a Fast wave we can set the Min Fast Bars to 1, Extreme Threshold to 50% and Avg Waves back to 8 which means that we will get an alert if the wave before the forming one has at least 1 bar and it's Speed Index is at least 50% less than the Speed Index Average of 8 waves back.
Plutus signals provide buy and sell entries after specific criteria have been met. These signals have a higher success rate when price is exiting a range or when price is leaving from Support/Resistance or Fib. Consider Plutus signals invalid within a range unless is the exit of the range (Range Break)
What makes it unique
The ability to identify, quantify and be alerted of the Change in Behavior of waves swings when compared with recent previous wave swings making it easier for the trader to be notified about Supply / Demand imbalance. Furthermore, another unique point of this indicator is the Plutus signals providing buy and sell entries. Plutus entries take into consideration this Abnormal Behavior, the wave swings structure and price location.
Example Trades
Wyckoff Up- rust formation strategy- Reading the chart
1. We have broken a Resistance Level with a Fast Speed Index of 0.7F
2. Abnormal Speed Index of 2.3 provides the alert for abnormal Speed Index behavior. There is not a high Speed Index like that in all the up wave swings which automatic makes it abnormal Supply Demand imbalance.
3. WU - Wyckoff Up-trust plutus signal has been created, which means Short.
4. PRS - Plutus Reversal Short also created at the same location which makes the Short even a higher probability trade
5. Entry: We enter Short on the close of the bar
Exit from Range Strategy - Reading the chart
1. We are in a Ranging environment
2. PS and PRS are invalid signals because according to the rules mentioned previously we do not trade any signals created within the range when the price does not break the range.
3. PRL - Plutus Reversal Long which means that price will move in the opposite direction of the High Speed Index (the 2.2) is a valid signal since price breaks the top of the range
4. Entry Long after breaking the top of the range
PRL after Support hit Strategy and Exit from Range Strategy - Reading the chart
In this we have two different strategies available. The first one is Plutus Reversal Long signal after hitting support and the second on an Exit from Range.
The Story:
1. We have hit support (double bottom)
2. Speed Index 2.2 at the bottom is on the High side, not too extreme but on the high side.
3. A PRL long signal is generated which means that price will move in the opposite direction of the 2.2 Speed Index
4. Entry Long on the close of the bar- This trade has provided 482 pips of profit
5. Price goes into Range
6. Classic textbook strategy Exit from Range with Plutus. We get a PL Plutus Long signal which means price will follow the directions of the high Speed Index wave and in this case is the 2.7 wave
7. Entry Long after the range break. This trade provided 384 pips up to now.
