VEL on VEL
( VEL double
)
The power of using low-lag, ultra smooth indicators is that you can safely experiment with feeding one indicator to another without signal degradation. Here is one such example...
The "VEL Double" indicator feeds the output of VEL on price to another VEL and plots a blended combination of the single and double VEL results. A single application of VEL analyzes market momentum, but a double-VEL analyzes market acceleration. This synchronizes VEL with rapid market reversals, typically found in a tight trading range.
The chart shows the S&P500 and the VEL Double oscillator. To this chart we added a simple strategy designed to enter long when the oscillator is rising and exit when falling.