Deep dive into Acceleration / Deceleration Indicator Hello, Skyrexians!
Last time we discussed how you can use the Awesome Oscillator to create profitable crypto trading strategies and which type of signals it generates. Today we will deep dive into Acceleration/Deceleration (AC) the next Bill Williams indicator, which can also enhance your cryptocurrency trading strategy. This indicator also can be valuable not only for manual trades, but also for developing your crypto trading algorithm, crypto algo trading platform, crypto trading bot, ai trading bot or grid bot.
The main thing is to understand what is the AC indicator and which signals it generate, which signals we shall use in crypto trading like top crypto traders. Let's go!
What is Acceleration / Deceleration?
The Acceleration/Deceleration Oscillator (AC) is a technical analysis indicator developed by Bill Williams, a notable trader and author known for his work in market psychology and trading systems. This indicator helps traders identify changes in market momentum and potential trend reversals.
How the Acceleration/Deceleration (AC) Indicator Works? The AC indicator is based on the idea that the momentum of the market (speed of price movement) often changes before the price itself changes. By identifying these shifts in momentum early, traders can anticipate potential trend changes.
The AC is derived from the Awesome Oscillator (AO), another indicator created by Bill Williams, which is the difference between a 34-period and a 5-period simple moving average of the median price (the average of high and low prices).
The AC is calculated by subtracting a 5-period simple moving average of the AO from the AO itself. Mathematically, it can be represented as:
AC = AO − SMA5(AO)
Where AO is Awesome Oscillator (calculated as the difference between the 34-period SMA and the 5-period SMA of the median price). SMA5(AO) is 5-period simple moving average of the AO. Now let's consider which types of signals AC can generate.
Acceleration
MACD 1D: X, XD, XDD, and P=M(XD)Andrew M. Kempi
7 January 2023
MACD 1D Methodology:
X, XD (X•), XDD (X••), and P=M(XD)
Determine Volume psychology and volume mass.
P=Mass(Velocity), p=volume(XD), including pascal averaging.
The Volume, and price value, is dependent on Velocity (XD).
Velocity is dependent on Acceleration.
Confirm undeviated direction and trend.
Establish location: above or below directional price average.
Trend symmetrically around price average.
Confirm XDD (X••) acceleration.
Identify the Vector utilizing XD (X•).
Potential Waves/BTC Long trade.Been buying back into Waves again within the golden pocket, after having DCAed out of my position during the recent significant pump.
Price have now just broken out above the sym triangle as defined by the cyan dashed lines. Presently setting stop loss below the 65% line, just below the golden pocket.
WIll revert to a trailing stop loss strategy if the price successfully bounces off above the sym triangle, and above the ca. 0.000687 BTC range.
ACCELERATION OF A SMALL DEPOSITToday I want to talk about a topic that every novice trader has to face.
Most beginner traders save up money to make the first deposit and very often this amount is too small for trading, but the broker gives you the opportunity to trade anyway, why is that?
The fact is that the smaller the deposit, the easier it is to lose them, and the broker knows this.
Therefore, for calm trading, you need an amount greater than $100 or $500.
The optimal amount to start trading is $1000
What is the danger of a small deposit?
Beginners can be anyone from a student to a businessman.
And very often the initial funds will be small, because the reason people come to the market is to make money!
A person invests $10, not because he is greedy, but because there are simply no more free funds.
At the same time, the trader is already dreaming of millions, and his head begins to spin from such thoughts.
As a result, deals are opened for $1, then for $2, and in the end all the money is lost.
The market does not bring quick profits.
It is also impossible to deposit the last money or money borrowed.
All this will only lead to the drain of the deposit.
1000$?
Why $1000 is considered the best start?
This question can be answered by the rules of money management.
Everyone remembers the rules of risk, let's say you decide not to risk more than 5% on each trade.
When trading intraday, the position size is 20-50 pp., that is, when trading micro-lots of 0.01, the risk per trade will be $2-$5. Such a risk is acceptable for a $100 account, since then it will be 5%.
When trading on daily timeframes, the average risk is even higher: 50-100 pp. (5-10 pp.). In this case, the account must be at least $200. As you can see, money management clearly indicates the minimum deposit size.
This is when trading micro-lots.
As a rule, traders use standard lots because they want to make quick money and it is very risky.
Therefore, you should not start trading with $10 or $200.
It is better to save and collect the required amount, or at least $500, and then it will be easier to trade.
But what if you can't wait?
How to disperse the deposit?
There are a couple of rules:
A trader must have a working trading strategy that has proven itself well on a demo account and on a real account;
Comply with risk management rules;
Provide a deposit amount of $200-$400.
Subject to these conditions, you can “softly” disperse the deposit.
Overclocking
With a quick acceleration of the deposit, the risks increase, you must understand this.
Here are three principles that make it possible:
The risk per trade is set higher than in the classic MM, and can reach 10%;
If the trade is unprofitable, the risks are not doubled;
When the deposit is broken up to the set limit (for example, from $200 to $500), the trader returns to the previous risk of 5% and trades for several months in compliance with Money Management rules. Then you can repeat the "acceleration".
pyramiding
A popular way to accelerate a deposit is Pyramiding, the meaning of which is to add positions.
Here's how it goes:
You determine the main trend on the daily timeframe and open a position following the trend.
Then wait for another signal indicating the continuation of the trend.
If there is a signal, open another position along the trend. The protective stop-loss order of the first order is transferred to the opening level of the second order, that is, to breakeven.
The size of the take profit on the second trade should be small, because the trend can change direction at any time.
It is important to remember that this strategy only works if there is a trend, so a flat or correction should be avoided.
Outcome
Trading this way is very risky.
The best way is to raise an amount equal to or greater than $1,000.
Then trading will become less dangerous for you, since you can use the standard money management rules.
Before dispersing the deposit, you must set yourself a goal, after reaching which, be ready to use the standard risk rules.
Big risks are rewarded, but even they need to be taken with intelligence and control.
Good luck!
Acceleration Bands Acceleration Bands
Serve as a trading envelope that factors
The standard setting is 20 candles.
They can be used across any time period as breakout indicators outside these bands.
Acceleration Bands are plotted around a simple moving average as the midpoint, and the upper and lower bands are of equal distance from this midpoint.
Can be used in both growth and value trading strategies to show the potential breakouts.
XAUUSD - Watch Out! - H4/H8 - NICE OPPORTUNITYThe story starts the 31st May 2021 with a M1 Force pushing the market down from 1900 to 1700.
While the M1 force is on its way, it meets a W1 force the 29th Sep. 2021 at 1724 (Thick Demand Zone on D1). The energy of the W1 force should bring the price up to 1800. Then the energy fades because M1 weakens the W1 force by 4. TP is 1800 instead of 1900.
From 1800, price is resuming its M1 direction, to target finally 1700.
Now what you should be expecting on a lower time frame: The momentum
It will happen on H8.
We are looking for either:
- H8 REJECTION CANDLE + H2 ENGULFING PATTERN OR DEPLETION CANDLE
(ENTRY JUST AFTER THE H2 PATTERN FORMED)
OR H4/H8 ENGULFING PATTERN
(STARTING WITH A REJECTION CANDLE)
(ENTRY JUST AFTER PATTERN FORMED)
OR TWO H2 ENGULGING PATTERNS
(ENTRY JUST AFTER THE 2nd PATTERN FORMED)
The more you wait for the momentum, the better your reward risk will be.
Expect minimum 7 to 10 RR for this opportunity.
EURUSD - Price Action Analysis - H4/H1Reasons for entering on this market structure:
- There is an ongoing D1 force on the way down, due to a D1 downtrend plotted in red. This force is supposed to go down for 135pips (2ATR on D1 from the red arrow).
Because there is also an ongoing W1 force on the way up, this D1 force will be jeopardized, and will travel 1ATR distance only (current market level)
- Price will go to the half mark and will turn up to hit the D1 players SL (1.1970). The D1 SL is also a market structure support/resistance.
Regarding the setup for the entry, once the rejection candle on H4 is confirmed, you need to look either for:
- a depletion candle on H1 or H2 (candle with long wick closing up)
- a engulfing candlestick pattern (upward engulfing, green candle closing above previous red candle high)
EUR/AUD - Price Action Analysis - D1 To interpret this situation, you need to get the concept of price action.
Market is made of forces, sometimes that are directional, without any forces coming against. Also there are forces that oppose each other at some point in time.
In this example, there is a D1 trendline plotted, which carries a D1 energy (D1 Trendline).
While D1 force is on the way up, it meets a W1 force (yellow rectangle) that is an ABA (Acceleration - Base - Acceleration), thanks to the candle structure on the way down (blue rectangle).
So we have a D1 force on the way up against a W1 force on the way down. W1 force down will win over the D1 force up.
D1 players (bulls) have set their Stop Losses ( 1.5730) at 2ATR below the level where they enter (1.5950), which is a support to the market (market structure level in green).
As a result, because this move on the way down is caused by D1 players who are panicking, you will experience only downward (red) D1 candles from now till the green support level.
EUR/USD - Prediction of price movementThere is a W1 Medium Force that is offering a chance for an entry.
This entry is a D1 game opportunity. However there is a way to get in at the market structure level in order to convert the D1 SL into a H1/H2 SL.
I am showing you that 'around' 1.1800, you need to get in a long position, and hold it till 1.1970.
This offers a Reward Risk around 10:1.
Enjin Parobola is a Screaming Buy at 1837 SatsEnjin Coin is in a parabola. Typical cyclical corrections will average around 30%. From the recent high above 2500 Sats, the current price of 1837 represents a massive BUY opportunity into this parabola. I expect somewhere around 4000 sats to be the next resistance
AUD vs. SGD to see further gains ahead (mid-term trend).
Pseudo inverse head in shoulder (re-accumulation like pattern).
AUD has broken out above the top descending trendline.
Buy signal already triggered.
Significant move higher if price manages to break above the 38.2% Fib level and retests it and successfully holds.
Measured move target to 0.084 SGD, which sets a higher high, establishing a longer-term bullish structure.
PRISM Analysis
Snap bend up sharply, which is presently pulling the AJ-ribbon (Acceneration and Jerk) higher with the lime-green Jerk oscillator leading the move (i.e. bullish). Expect momentum to see serious gains ahead.
Daily chart shows that AUD vs. SGD continues to be held up above the red 21 EMA level. Bearish if this breaks and it falls below the green 50 SMA level.
PRISM higher-differential-order oscillators looks like they are ready to curve upwards as well.
Weekly Chart
This is a continued shared/published analysis from:
BTC vs. USD confirmed support above long-term trendline.BTC retested the white long-term trendline and confirmed support, which is a very bullish sign.
Note that the daily TD-seq is approaching a 9 though. Expecting a short term (probably minor) reversal to retest the 10429 USD VPVR line.
Green Ichicloud supporting "cushion" ascending higher and appears to be in the process of broadening.
PRISM had registered a bullish reveral as well, and the acceleration/jerk (AJ) ribbon is now curving upwards.
Looking at the 3 hourly:
Price will need to break up above the thick orange 200 SMA to confirm bullishness.
Green Ichicloud have recently formed.
AJ-Ribbon looks like it is in the process of curving upwards (awaiting confirmation -- i.e. when the thick-lime snap-oscillator crosses above the thin-red acceleration-oscillator)
Previous long-term measured move target:
BNB needs to retest 21 EMA (hourly chart analysis)BNB had seen a pump after a short period of re-accumulation -- where the green w-like pattering is marked (bought earlier at breakout back over the red 21 EMA).
Cyber Ensemble SELL signal has now been triggered.
PRISM oscillators looking bearish in the short term as well -- overbought (red background), and with the AJ-Ribbon falling with widening gab between the limegreen jerk-line below from the red-acceleration-line above, pulling momentum down. The middle Snap-like had already plunged negative.
BNB will need to drop at least to the 38.2% Fib level, where the red 21 EMA is at. This is also roughly where the previous local high was at as well as where the green Ichicloud is approaching.
If the 21 EMA fails to hold, expect to drop down to 61.8% Fib level where the green 50 SMA is also at.
Bearish if 50 SMA fails to hold and bearish target is at thick orange 200 SMA line.
BTCUSD Outlook -- Bearish Slant on the short-to-mid-term
Orange 200 SMA sloping negative.
Thick bearish Ichicloud.
Appears to be rejected by 10429 USD VPVR level.
Bullish slant if red 21 EMA continues to hold it up.
TD approaching a 9, another bearish sign (flipping between a green 9 and a red 1 during posting) .
Continue to be supported above the white long-term trendline. Will be really bad for the bulls if the price even goes below this line.
Blue VPVR support line at 9621 USD just under the white long-term trendline though, and strong purple VPVR support at 8732 USD.
Bullish with opportunity to retest the 11141 VPVR level, if it can close above the 10666 USD base of the daily Ichicloud.
PRISM
Stochs of pRSI indicates overbought. AJ-Ribbon relatively sideways with a bearish slant atm.
RSI/Stochs
Classical Stochs(RSI) coming down.
Daily Chart View
FUSIONGAPS V4 {50/15} series
Not good for the bulls.
However, looks like Altcoins (collectively) vs. BTC still have some steam.
KUSAMA (KSM:BTC) broke back up above 200 SMA on the 30 mins ...KUSAMA (KSM:BTC) broke back up above 200 SMA on the 30 mins after period of continued rejection..
Kusama was originally planned as a testnet for Polkadot, but from what I am hearing so far, it could become its own independent chain in its own right (at the same time as functioning as a test net for Polkadot too) -- where certain projects (that were not successful with securing a Polkadot slot) will instead run exclusively on the Kusama platform rather than migrating onto the Polkadot network.
(Correct me if I am wrong on the fundamentals side of things, I'm focused mainly on TA). :)
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TA
KSM now supported above orange 200 SMA on the 30mins
Need to wait to see if it will continue sideways, continuing to be supported above the 200 SMA, to eventually turn the bearish Ichicloud bullish again, before a recovery can be expected.
Bullish wicks and 21EMA/50SMA bullish cross registered (circled in main chart) on the 30 mins.
PRISM Oscillators Analysis
Hidden Bullish Divergence adhered.
Transparent blue Volume falling off significantly as price increase though.
Acceleration heading up, pulling up Momentum
Still waiting patiently for confirmation for a suitable entry as a long-term investment, with a couple of small stop-limit buys modulated by a combination of Cyber Ensemble and PRISM Oscillators Set, and Ichicloud state, set for now.
BTCUSD - More downside in the short-term (30mins chart analysis)More downside to come for BTC in the short-term. Perhaps relative sideways.
BTC remains below thick orange 200 SMA, and continue to be rejected by the green 50 SMA.
50/200 SMA deathcross registered not too long ago.
Rejected by bearish Ichicloud that appears to still be thickening.
For the bulls, will need to wait for:
For price to first head back above the 200 SMA to advert 50/200 SMA deathcross (DX) on the higher timeframe.
Ichicloud to turn positive again on the higher time frames.
Watching how the weekly candle closes too vs. the trendlines.
PRISM Oscillators Analysis.
Stochs in a downward corrective trajectory..
Negative Snap-Oscillator, which is still heading downwards.
Momentum is accelerating downwards (AJ-ribbon heading sharply down), pulled lower by negative snap-oscillator.
See also my long-term analysis/target:
Zooming Out: BTC is still looking pretty bullish..
Will be healthier if Stoch resets downwards a little, either correction by price or through time (i.e. painfully going sideways, liquidating longs and shorts along the way, over a longer period of time before continuation)..
More upside potential for AUD vs. SGDBullish w-like re-accumulation patterns..
PRISM Oscillators Analysis
Stoch-of-pRSI in Oversold state atm
Snap-Oscillator pierced into the positive and heading higher.
AJ-ribbon (acceleration/jerk) heading up (in response to the positive Snap-osc), which in turn is pulling the momentum up..
Continuation from my previous analysis awhile back:
AMPL:BTC long opportunity at 78.6% Fib retracement level.@ 78.6% Fib retracement (~0.000179 BTC)
Green IchiCloud forming.
Higher low set.
Inverse head and shoulder formation emerging again (clearer on the 5min chart).
Have the sell pressure ended?
Buy on confirmation: When AMPL goes above green 50 SMA and holds.
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PRISM Oscillators Set (Momentum/Acceleration Analysis)
pRSI STOCHS in an oversold state (green background)
pRSI entering Bullish phase again, piercing above its 30 VWMA; supported by hidden bullish divergence.
Snap-Osc (yellow) in the positive, pulling AJ-ribbon upwell into the positive, which in turn have pulled the momentum oscillator up back into the positive again.
Looking at the hourly chart:
Looking at the 3 hourly chart:
MaMA : Momentum adjusted Moving AverageA brand new Moving Average , calculated using Momentum, Acceleration and Probability (Psychological Effect).
Momentum adjusted Moving Average( MaMA ) is an indicator that measures Price Action by taking into consideration not only Price movements but also its Momentum, Acceleration and Probability. MaMA , provides faster responses comparing to the regular Moving Average
Here is the math of the MaMA idea
Momentum measures change in price over a specified time period
momentum = source – source(length)
where,
source, indicates current bar’s price value
source(length), indicates historical price value of length bars earlier
Lets play with this formula and rewrite it by moving source(length) to other side of the equation
source = source(length) + momentum
to avoid confusion let’s call the source that we aim to predict as adjustedSource
adjustedSource = source(length) + momentum
looks nice the next value of source simply can be calculated by summing of historical value of the source value and value of the momentum. I wish it was so easy, the formula holds true only when the momentum is conserved/constant/steady but momentum move up or down with the price fluctuations (accelerating or decelerating)
Let’s add acceleration effects on our formula, where acceleration is change in momentum for a given length. Then the formula will become as (skipped proof part of acceleration effects, you may google for further details)
adjustedSource = source(length) + momentum + 1/2 * acceleration
here again the formula holds true when the acceleration is constant and once again it is not the case for trading, acceleration also changes with the price fluctuations
Then, how we can benefit from all of this, it has value yet requires additional approaches for better outcome
Let’s simulate behaviour with some predictive approach such as using probability (also known as psychological effect), where probability is a measure for calculating the chances or the possibilities of the occurrence of a random event. As stated earlier above momentum and acceleration are changing with the price fluctuations, by using the probability approach we can add a predictive skill to determine the likelihood of momentum and acceleration changes (remember it is a predictive approach). With this approach, our equations can be expresses as follows
adjustedSource = source(length) + momentum * probability
adjustedSource = source(length) + ( momentum + 1/2 * acceleration ) * probability , with acceleration effect
Finally, we plot MaMA with the new predicted source adjustedSource, applying acceleration effect is made settable by the used from the dialog box, default value is true.
What to look for:
• Trend Identification
• Support and Resistance
• Price Crossovers
Recommended settings are applied as default settings, if you wish to change the length of the MaMA then you should also adjust length of Momentum (and/or Probability). For example for faster moving average such as 21 period it would be suggested to set momentum length to 13
Alternative usage, set moving average length to 1 and keep rest lengths with default values, it will produce a predictive price line based on momentum and probability. Experience acceleration factor by enabling and disabling it
Conclusion
MaMA provide an added level of confidence to a trading strategy and yet it is important to always be aware that it implements a predictive approach in a chaotic market use with caution just like with any indicator
Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely
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Bullish perspective of BTCUSD (Daily Chart)Main Chart
BTC need to close above this updated dotted yellow trendline to confirm a long.
Long-term Resistance (solid white line) up just above ~10000 USD.
Lossa bullish W-ing like accumulation patterns.
PRISM Oscillator Set
Stochs presently oversold (Green Background)
Red pRSI (Main-Oscillator) resting back to the baseline.
Acceleration/Jerk Ribbon creeping sideways in the positive.
For Altcoins vs. BTC analysis, see:
Altcoin pump ahead? BTC Dominance bearish.BTC.D have fallen below the white dotted support line -- continue to get rejected by the red 21 EMA, and remaining under the green 50 SMA and orange 200 SMA.
PRISM Oscillator signals (red background) Stochs oversold, with (lime/orange) acceleration/jerk (AJ) ribbon plunging into the negative with snap-oscillator (yellow/pink) getting rejected by the 0 line and remaining in the negative.