The VC Price Momentum Indicator
I want to take the opportunity on this report to review from an educational perspective the application of this innovative proprietary trading tool.
The VC Price Momentum Indicator trading system was designed to do everything for you. The proprietary model incorporates Elliott wave, Fibonacci, Vedic and Western mathematical principles to monitor cycles and identify volatility, momentum and patterns.
Subscribers are automatically provided with entry points, trailing stop loss levels and profit objectives. It has taken years of back and forward testing to verify the accuracy and consistency of the system and we are proud to finally be able to offer this truly remarkable trading tool to the financial community at large.
The VC Price Momentum Indicator system is based on several well-supported phenomena, including Fibonacci ratios. The very fact that everybody in the trading world is aware of such ratios and expects them causes mob behavior in reaction when such levels are reached, which lead to a self-fulfilling prophecy.
The VC Price Momentum Indicators are a subset of support and resistance levels. This special form of projected support (demand) and resistance (supply) form the basic methodology used by the VC Daily Price Momentum Indicator proprietary algorithm.
The basis for defining expectations for tomorrow’s trading are the historical support and resistance levels. Using these prices as an input for our proprietary algorithms produces the most powerful anticipated buy or sell levels for tomorrow’s trading session called the VC Daily Price Momentum Indicator. Our system can then extrapolate how far the market is likely to move up or down from the VC code levels in the preceding session.
The first projected anticipated level of resistance (supply) above the code levels is called sell 1 or (S2). The next higher calculated resistance levels are sell 2 (S2). Similarly the first level of projected support (demand) is buy 1 (B1) under the VC code level. The next lower levels of support is buy 2 ( B2).
During the upcoming trading session, unless the price action is influenced by unprecedented outside forces such as economic reports or news, our model will revert to its mean between these calculated points.
In general, if today’s price action starts above the VC Code level it will tend to stay above the VC Code (also called the daily pivot point, average price or mean of the day’s activity).
Under such circumstances, resistance will be met at price level S1. Should S1 be broken, further resistance will be expected at S2. The story is reversed if the price action is below the VC Code level. Support will be met at price level B1. Should B1 be broken, further support will be expected at B2. If after starting the day above the VC Code the price crosses through the VC code price and closes above that price, the VC code then will act as a support area.
The VC Code points and levels are support and resistance levels and behave exactly like any historical supply and demand level. Therefore, the VC Code levels are useful as an index tool for both day trading and for selecting and exercising entries and exits for longer term traders.
To take a closer look at some specific strategies let’s take a theoretical look at some simple trading methodology employing the VC Daily Codes.
First fundamental rule: If you are day trading after the opening, wait first 30 minutes to 1 hour. If the price action trades above or below the VC code, the price action will tend to remain above or below the VC Code for the rest of the session. Although this rule bids us to wait out the opening range and thereby avoid much of the wildness and whipsawing, overlooking the next fundamental rule of the VC Code could be disastrous.
Second fundamental rule: Trading after market opens or later trades at extremes S1, S2 or B1, B2 would exhibit a high tendency to trade back toward the VC Code (Mean). Therefore, the general rule is to avoid buying the high (supply) or selling the low (demand), which becomes increasingly more stringent as the price moves further away from the code.
Our algorithm identifies the highest probability trades when the price reaches the extreme of the mean above or below, or when the VC Code level identifies the price to be at the highest probable point to execute a trade.
Third fundamental rule: If the market closes below the B2 or above the S2, it signifies that the trend is beginning to change and the price pattern may be shifting to the next price fractal, inverting resistance to support and vice versa.
Our oversimplified system has started to define set limits enabling us to either buy or sell above or below the VC Daily Code. We also have roughly begun to define a basis for determining entry/exit and safety stop rules. The methods that these few theoretical ideas suggest are still a long way from a perfect system. Nonetheless, there are those who actually do successfully trade the VC Daily Price Momentum Indicator using just these few simple rules.
Good luck and good trading this is Patrick MontesDeOca, CEO for the Equity Management Academy.