Happy Friday folks.
I’ve been working on an interpretation of Dennis’ algorithm. The primary benefit of the EA version is that you can visually see the tendencies over prior periods. Another benefit: you can run the exact same algorithm on the H1 time scale. We’re still measuring price to the 200SMA for the JPY pairs group, and separating exactly the same way, but just on a shorter time frame. This might be used for shorter term trades, or to double check the values on the H4 time frame.
Here I have plotted individual lines between the current value and the value 8 periods ago. I believe this is simply one of the formulas for momentum (the other uses division). The idea with S/W is to pit the strong against the weak. In this case, the “strong” is any currency that is increasing (positive slope) e.g. CAD, NZD, AUD and “weak” is any currency that is decreasing (negative slope) (e.g. GBP, USD, EUR).
Any constructive thoughts or suggestions?