Directional Bias & Confluence VelocityMomoDIV

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VelocityMomoDIV – Hybrid Momentum The “VelocityMomoDIV” is a hybrid indicator that measures dual momentum & divergence 1.Velocity Histogram – MTF velocity cycles which measures fast momentum 2.MACD BB’s – MACD & Bollinger Bands which measure slow momentum

VelocityMomoDIV – Usage & Purpose The 4 Main Components Are: 1.Momentum Analysis (Confluence & Non-Confluence) 2.Divergence (Automated/Filters & Signals) 3.Fake-Outs (False Moves) 4.Price Exhaustion (Overbought & Oversold)

LONG BIAS

SHORT BIAS

Indicator Confluence  When using the VelocityMomoDIV we can look for strong vs weak signals of momentum between the MACD BB’s & the Histogram. (NON-CONFLUENCE) When the BB’s are far from the zeroline and the histogram changes direction be cautious of a weak move in momentum and directional change as this often signals a zeroline reject or fake-out. (CONFLUENCE) When the BB’s follow suit with the histogram, look for a continued move in momentum and change in directional strength

Confluence – Strong Long Momentum

Confluence – Strong Short Momentum

Non Confluence

Non Confluence – Fake-Out

Non Confluence

Non Confluence – Fake-Out

Automated Divergence The Velocity Histogram and the MACD BB’s are used to calculate divergence. The indicator detects both potential and confirmed signals. When price and momentum move in the opposite direction this signals Divergence. Bearish Divergence is when price makes HH’s and momentum makes LH’s. Bullish Divergence is when price makes LL’s and momentum makes HL’s.

Bearish Divergence

Bullish Divergence

Price Exhaustion Price exhaustion is identified by measured moves on the Velocity Histogram and is calculated from multiple timeframe velocity cycles. This indicator separates upper levels (Overbought) and lower levels (Oversold) which signal price exhaustion. This can be used for trade filters with directional trading or for identifying price reversal areas.

Price Exhaustion – Overbought & Oversold