What distinguishes RHYTHM as a powerful tool for supporting traders?
Rhythm indicator – A Powerful Market Internal Tool.
The Rhythm indicator is a specialized market internal tool designed to enhance your trading insights for day trading in ES, NQ, SPX, SPY, and QQQ. Rhythm constitutes the amalgamation of market breadth, advance/decline, volume spread, tick index, and tick volatility across the NYSE, Dow Jones, and NASDAQ exchanges.
Rhythm indicator incorporates a diverse range of metrics and data points:
1. The Market Breadth or Breadth Ratio is a volume ratio composed of the volume flowing into up stocks versus the volume flowing into down stocks of the NYSE, Dow Jones, and NASDAQ exchanges.
2. Advance/Decline (Trend of Market Internal): This indicator gauges the distinction between advancing and declining stocks or securities within a given market index. It offers a broad overview of market participation.
3. Volume Spread: By comparing the volume of rising (up volume) and falling (down volume) stocks or securities, this ratio unveils buying and selling pressure dynamics.
4. Tick Index: Reflecting the balance between uptick and downtick trading activity, this index provides valuable short-term market sentiment cues.
5. Tick Volatility is a technical analysis tool to generate oversold or overbought signals on Rhythm. When the tick continually touches the upper Band, it can indicate an overbought signal. If the tick continually touches the lower band it can indicate an oversold signal.
The signals in the Rhythm indicator are listed below.
Market Breadth Signals
NASDAQ and NYSE on the dashboard showing green indicate that the market is experiencing more buying than selling, while showing red signifies the opposite. This serves as a general signal reflecting the buying and selling forces on both exchanges, including Dow Jones.
The number indicates that NYSE is experiencing 3.24 times more selling force than usual, while NASDAQ has 1.24 times more buying power. Typically, when this number remains above 2.5 or below -2.5 for 30 consecutive minutes, the market tends to move in that direction.
When this line turns red, it signals that the internal market trend of NYSE, Dow Jones, and NASDAQ is descending. When the line turns green, it indicates that the internal market is showing signs of ascending. If The market trend and volume are not following the same direction, dashboard will show Market sideway. These signals will help traders determine whether the market is moving up or down at the time of monitoring and will be confirmed on the dashboard.
Volume Spread Signals
The market trend is crucial, but without volume, the trend will lack strength. Volume in Rhythm is calculated based on buying and selling activities across three exchanges to determine the volume trend in the market. An increase in volume indicates strong buying, while a decrease suggests strong selling.
Tick represents the buying and selling pressure on NYSE, NASDAQ and is relevant for only a few minutes. Tick values range from -1,800 to 1,800. The purpose of Tick is to assist traders in identifying safe entry and exit points for ES, SPX, SPY, NQ and QQQ. When the candle’s tick exceeds the upper or lower band, it indicates overbought or oversold conditions.
With a smart algorithm, Rhythm generates Long ‘L‘ signals, and Short “S‘ signals appear on the chart and Dashboard at the same time on the dashboard.
Divergence is a highly effective strategy, traders may analyze the divergence between the tick index and price to assess the underlying strength of a market. If a stock’s price is higher Low while the tick index is forming lower lows, it could suggest that sellers are losing momentum. Finally, the price pushed up.
By combining the Divergence and Price Action algorithms in the SocLevel or ColorTrend indicators with Rhythm, traders can identify optimal entry and exit points.
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