Shortcut Analysis Ω Palladium

5 thg 8, 2019

One of the core indicators offered by (ShortcutAnalysis.com), Palladium is the multi-tool of the Shortcut Analysis family.

-It can help identify periods of high or low volatility. High volatility is present when the band is wide and low when it compresses. Extended low volatility can be an indication of explosive volatility coming.

-The signal line attempts to measure oversold/overbought levels. When in the danger zones of the band (shaded darker at top and bottom) it can indicate a reversal is coming. However, extended trends can oscillate out of a danger zone, just to enter again. That's why we have 4 lengths to choose from. You can use these to get confirmation on multiple spans of time.

-It also measures statistical extremes with the 2nd and 3rd deviations above and below. 68% of prices will fall within the band. When they exit that channel, price will either bounce back quickly or the bands will expand to acknowledge a longer-term increase in volatility. Compression on multiple bands are an indicator that a huge increase in volatility is coming.


How to read the indicator:
4 lengths:
Very short - Dionysus
Short - Hermes
Mid - Plutus
Long - Tyche

Signal line (light blue) in the danger zones indicate a likely turn of price in the other direction.
Price line (maroon) passing the 3rd deviation indicates a statistical extreme and can signal either a quick bounce back toward the mean or the beginning of a new trend in that direction.
Compression of the band indicates low volatility and prolonged low volatility can indicate that high volatility is approaching.

Be sure to validate these signals with other indicators. It is not suggested for anyone to use a single indicator when trading.

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