Q-DNA

Volume Delta – We use a derivative of the standard Volume Delta calculation to calculate the Volume Delta within each swing. In other words the Volume Delta resets when ever there is a trend change. This is very helpful as we can very often see a trend long before the market confirms this.

The Noise Delta simply cumulates the Volume Delta according to all the price changes that is counter to the prevailing trend. We found that moves with a “noise” values larger than the Volume delta produces powerful moves in the opposite direction. Consider the image to the left. the Noise Delta in the down move was larger than the Volume Delta – This was followed by a very powerful move upwards.

New Support and Resistance – The yellow rectangles represents levels where the market makes new Support and Resistances. When the VD ( Volume Delta , White plot) moves away from these rectangles it signals great trading opportunities.

Previous Support and Resistance -The white and Blue SR lines show up when the VD approaches previous Support and Resistance levels. These make for great reversal as well as great break-out trades.

Major Divergences – The indicator also plots these Red and Green lines to show when there are major divergences between Volume And Price. Example: Price cycles moving higher whilst Volume cycles are moving lower. These divergences often produce large moves.

Minor Divergences – These Pink and Cyan plots show up when there is a small divergence between volume and price within a trend as opposed to the Major Divergences which looks for divergence between cycles / pivots as seen above.

Patterns – Double bottom ,double top and head and shoulders patterns also show up in the Volume Delta an delivers great trades. the indicator automatically draws “DB” , “DT” and DHS when these patterns present themselves.

Volatility bands – These band measures the size of past swings and expresses this in Average ( Dark gray) , Average + One Standard Deviation ( Light Gray / Light Pink) and Average + 2 Standard Deviations ( Blue / Red). We use them in much the same way as you would use Bollinger bands except we find this to work a lot better since the model is adjusted for other factors and variables as well.

Momentum breaks – based on our volatility bands we found that a break above / below the first band ( Average / Dark Gray) generally signal that the market is gaining Momentum and the trend could pursue strongly.

This indicator measures and shows OB / OS levels better than most other indicators. This also helps us see divergences more accurately and give us a far better estimation of “how much” Overbought and oversold should be.