Wednesday, June 3, 2020

Breaking down ASTRA's TRENDEX Chart

If you looked inside The MyPinoy Network's quote pages, you will find this weird chart that looks kinda like the candlestick chart but seems to be unaligned with it. What the heck is it? We couldn't find a better name and just decided calling it the TRENDEX Chart. It utilizes the Price-X value so you should first look into that article before going here.

Let's break it down to its most simple component... the Box-Plot. So in statistics, a Box-Plot shows your the 5 Number Summary. It allows you to see the distribution of a particular arrangement of datasets.Confused already? lets explain... imagine you have the following 15 data
DATASET = 11, 12, 12, 13, 15, 15, 18, 19, 19, 20, 22, 22, 24, 26, 30 
The 5 Number summary will disect these and try to locate 5 important numbers
  • The Maximum (Highest number in the set)
  • The 3rd Quartile (The median of the "right half" of the dataset)
  • The Median (The number representing 50% of the population in the dataset)
  • The 1st Quartile (The median of the "left half" of the dataset)
  • The Minimum (Lowest number in the set)
So to solve this is easy, we know the minimum and maximum already (11 and 30) just by looking at the data. To get the median, you will need to locate (or impute) the number located at the center. There are 15 numbers so the median is 15 divided by 2 rounded up. that will be the 8th number which is 19. now we need to split the dataset into 2 groups from the median.
DATASET1 = 11, 12, 12, 13, 15, 15, 18
DATASET2 = 19, 20, 22, 22, 24, 26, 30

To get the first quartile, you need to get the median of DATASET1 and the same for the 3rd quartile for DATASET2. The result will be as follows.

  • Maximum: 30
  • Q3: 22 
  • Median: 19
  • Q1: 13
  • Minimum: 11
So what you basically see in each boxplot is the following

So to simplify, a Box-Plot allows you to visually see the "distribution" of prices for a certain number of 'N' days. In our case, we have made the 5 days (5D) TRENDEX Charts available so far (as we still need to collect more data to make longer term charts available as well as include newer data for you guys to use). In addition to the information above, you will see there's a yellow shaded area on the BoxPlot, this is called the SKEW which starts at the MEDIAN (RED) towards its MEAN (YELLOW EDGE) value. so if you are looking for what the 5 days MA (Moving Average) is... that is the edge of the yellow shaded area.

Whose that Pokemon??? Its TRENDY!
Let's give it a name... TRENDY! now lets visualize what it looks like for a moment...

Disgusting right? I mean... my artwork... Anyway, in the Box-Plot, you can see that Trendy "mutates", "evolves" or better to say "runs around" the area day to day. its movements in the past help determine what Trendy is up to and where it may be going the next day. Remember! nothing is guaranteed! that is why we often say "probable", "may", "can", etc. If someone tells you that something is 100% guaranteed, you are being scammed so abort! In Stocks and Gambling, it does not matter how many times you get it wrong! but make sure you get it right more than you get it wrong where the total ROR is a positive. This is why probability is the game and those who can easily see and utilize probabilities are winners in this game.

Here is how Trendy operates
  1. Trendy's eye direction tells where it is facing. if the yellow shade is above the red bar, it is facing upward and vice versa. It is where it is interested in going... the larger the "view" (The yellow ares which is the SKEW), the more it is "interested" to head towards the location. So we say "interested" but not necessarily where it will be because of the next item...
  2. Trendy only knows 1 direction, forward! to move backward (downtrend), it has to face down and move. Sometimes it moves too fast and has to "decelerate". this usually happens when it suddenly changes its "view" (performing a 180 degree) and decelerate (by skidding) from its previous momentum.
  3. When moving, Trendy moves kinda like a worm... it stretches its front body forward, then move its back-end forward eventually. If it did not move it's back-end however, it could be "reconsidering" the move forward.
  4. Its tongue and tail (Box-Plot whiskers) determines what it is trying to taste or feel.Its use so far is to determine "potential" areas where Trendy will move to (whether continue forward or just decide to step backwards)
  5. Contractions (shrinking) happen to Trendy when its contemplating its next move or asleep. This indicates market is trending sideways or indecisive.
Stream and River-flow
You see that light blue (Stream) and dark blue (River) line that kinda flows like a smooth moving average? That is the XVWMA (X-Price Volume-Weighed Moving Average) or what we can just call the "Stream and River-flow". Unlike basic MA (moving Average), it is "transaction volume" biased. That means if there are 5 trading days with equal number of trades per day except for the 3rd day which is 10x the normal transaction volumes, the river-flow will be more inclined to that day's X-Price. Trendy usually plays around the stream and river area so watch where it is potentially flowing towards.

The stream used 5 Days worth of data while the River uses 10 days. This means the stream is a week of market trades while the river is half a month or 2 weeks. Another mid term used for this is called the Road. These 2 short term trends help us see trends but may not be a strong indicator that the trend is stable. It is best to be used against longer trends to see the strength of the trend.

This is a new feature release June 9th of 2020. It is similar to the stream and river but uses a 20 Day span. it is used for trading on a longer term than the river. Both are similar to MACD, only that these are based off the X-price and are also volume weighed meaning the prices are more aligned to the price with most volumes. Like MACD, you can utilize this to see bearish patterns whenever the RIVER crossess the ROAD


The chart below it is the "heartbeat". It is composed of the N days trade value EMA. You will see its pulse changing over time. So what does it mean? well  to make a proper diagnosis, you will need to compare this with the other metrics. You will need to look at the "mutations" above it. Heart rate rises during 2 events, "panic" and "excitement" and the mutation tells you which is happening now. The growth rate or decline rate will also allow you to see if the trend is a one-off, consistent or amplifying.

Acceleration graph allows one to see if the trend is accelerating or decelerating from its previous momentum

It is percentile based from its previous momentum. It compares the delta of 5DXMA (5 Days X-Price Moving Average) against its 20DXMA (20 Days X-Price Moving Average) for that timeframe. Thus for example a boost of 100% acceleration means the 5DMA is twice its 20D-MA. You can think of it as a vehicle (investment)  driving on a highway. On certain time, the vehicle shifts up or down and the heartbeat shows the actual velocity change.

Cave Explorer
This is a new chart tool launched June 11, 2020. It shows the 5DEMA (5-Day Exponential Moving Averages) of the Market's High and Low (RED Boundaries) as well as the 5DEMA of the X-Price (YELLOW). The longer trend 20DVWMA Market Highs and Lows are also featured to show the Volume biased bounds of the 20 day High and Low Price.

The 20 Day VWMA of highs and lows shows a safe spot where the path should be based on previous data where strong trends occur. This makes it a potential plot points for resistance and support. In this case its for short term swing trading. When the "Cave Ceiling" (5DEMA HIGHs) passes through the VWMA Floor level, it can indicate a bullish trend. once it passes through the VWMA Ceil, the trend can still rise but caution is adviced  as you have reached the unknown. For potential downtrends, the reverse holds true but instead, we look at the "Cave Floor" (5DEMA LOWs) passing through the 20DVWMA Ceiling.

Another way to play it is that when the "Cave Ceiling" is below the VWMA FLOOR PRICE, use the stated VWMA FlOOR PRICE as your entry point (BUY TRIGGER). when the 5DEMA trend seems collapsing from its bull run, if the "Cave Floor" falls through the VWMA CEILING PRICE which is your exit (SELL TRIGGER).

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