The market is still flat although the bitcoin has managed to return above the Kama average in a position of strength after several weeks below it.
A break above the resistance zone (above 12200$) would confirm the recovery of the trend.
From tomorrow i'm on holiday, see you in September, there will be updates only in case of emergencies:)
Kama average is now in a slight downtrend and when this average is not flat it doesn't make much sense to consider support/resistance price zones.
Kama efficiency ratio is close to cross 0.30 thresold where it will confirm the tendency (slightly bearish).
Not much happened apart a quick perforation of the support bands, as i said in the chat it all depends on how many periods are used to compute volatility. Using all historical data available price bands are wider but i prefer to use more recent data.
The short trade of the previous update has been closed at even without losses, another short trade closed right now at profit.
The exit logic is simple, in case of a short trade the exit point is the perforation of the first support area, in a long trade at the breakout
of the first resistance zone. Same for the entry, when price crosses above the support level...
This is a first test after the trading system parameters optimization.
The idea is to operate when the level of volatility is not too high but not too low either and when the average KAMA is substantially flat because we do not want the trade to be influenced by any primary trend.
This trading system tries to operate when the market is quiet, with average...
Bitcoin tried again to move under the support area but failed, however if there is an increase in volatility, let's say an increase of 100%, the support level at $9700 would become $8600.
You can try by yourself increasing the BB DEV parameter of Kama v1.22 indicator from 20 to 40.
The Kama average used in the chart has as parameters:
BB DEV 20
BB PERIODS 500
In this update I have added the efficiency ratio of the Kama average, i.e. the calculation of the signal intensity and underlying volatility and their ratio. Personally I use the threshold of 0.3 to identify if the market is flat (below 0.30 of SG) or in a trend (above 0.30 of ER - Efficiency Ratio). I'll publish ASAP the updated version of Kama with the ER ratio (v1.22)