sorry for the typo in the title, should be 9.2K! not 9.6K!
cure4virus
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Could you please explain some things here? A) Why you take the Ratio of btc / Dollar Index ? B) What is the Indicator at the Bottom ?
Thank you
UnknownUnicorn17032407
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@cure4virus, the BTCUSD index is an aggregate, it uses data from several different sources, not just one exchange or one market, so it is a good overall picture of the general BTC market instead of only one market (spot or futures) on only one exchange
i believe volume is essential for any quality analysis of a market and very insightful to where the important price ranges are, so i used the volume profile and MFI here
MFI is the money flow indicator (or index); i like it because it includes *VOLUME* and uses the *typical price* (the hlc3) of each time period instead of the closing price, like many indicators are based on
the typical price (hlc3) is the average of the high, low, and close of a time period, so it's called hlc3
hlc3 gives a better indication of the price action during that time period instead of just the closing price, which is just the price of only one trade during that whole time period, the trade that just happened to be the very last trade.... a lot more happened than just that final trade!
investopedia has some good articles about MFI, but the basic idea is comparing positive money flow and negative money flow to measure the strength of buying or selling
if the typical price went up, that period's volume weighted typical price is added to the positive money flow
similarly, if the typical price decreased, its volume weighted typical price is added to the negative money flow
then a ratio of the positive money flow and the negative money flow is used to calculate the index value
cure4virus
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Wow - where have you been hiding man. Very good analysis.
UnknownUnicorn17032407
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@cure4virus, thanks for the compliment, best wishes for your trades!