MIDAS Technical Analysis: A VWAP Approach to Trading and Investing in Today's Markets(46 Bloomberg Financial)

This book provides a new, powerful twist to MIDAS technical analysis, a trading method developed by the late Paul Levine. The authors show how to employ MIDAS in trading, from recognizing set ups to identifying price targets. The book explains the basics of MIDAS before demonstrating how to apply it in different time frames. Further, it extrapolates how MIDAS can be used with other more conventional indicators, such as DeMark or moving averages. In addition to introducing new indicators that the authors have created, the book also supplies new computer codes.

Table of Contents:
Introduction xiii Andrew Coles Biographical Sketch, Paul H. Levine xix David G. Hawkins Acknowledgments xxi Part I: Standard Midas Support and Resistance Curves Chapter 1 MIDAS and Its Core Constituents: The Volume Weighted Average Price (VWAP) and Fractal Market Analysis 3 Andrew Coles MIDAS and Its Two Key Backdrops: VWAP and Fractal Market Analysis 4 The MIDAS Approach as a Genuine Standalone Trading System 20 Summary 26 Chapter 2 Applying Standard MIDAS Curves to the Investor Timeframes 29 David G. Hawkins Definitions of Timeframes—The Triple Screen Trading Methodology 29 MIDAS Curves within the Triple Screen System 31 The Basic Behavior of the MIDAS Support/Resistance Curves 31 Equivolume Charting 32 What Price Should Be Used? 35 Support/Resistance Becomes Resistance/Support 35 Distinguishing an Uptrend from a Trading Range 39 The Foothill Pattern 40 A Trading Range Turning into a Downtrend 41 Tracking a Trend with a Hierarchy of MIDAS Curves 43 MIDAS S/R Curves for Entry Setups and Triggers 46 Same Launch Point, Different Timeframes 48 Special Start Points—The Left Side 50 Special Start Points—The Initial Public Offering (IPO) 53 Special Starting Points—The Down Gap and Its Dead Cat Bounce 55 Special Starting Points—The Highest R and the Lowest S 57 Summary 59 Chapter 3 MIDAS Support and Resistance (S/R) Curves and Day Trading 61 Andrew Coles Multiple Trend and Timeframe Analysis 62 Part One: The MIDAS System as a Standalone Day Trading System 68 Part Two: Using the MIDAS System alongside Other Technical Indicators 82 Capturing Today’s High and Low with Standard MIDAS S/R Curves 119 Summary 120 Part II: The Midas Topfinder/Bottomfinder Chapter 4 The MIDAS Topfinder/Bottomfinder on Intraday Charts 125 Andrew Coles Levine’s Two Insights Governing the MIDAS Methodology 126 Part One: The Quantitative Features of the TB-F Algorithm 126 Part Two: The Engineering Aspect of TB-F Curves 135 Summary 159 Chapter 5 Applying the Topfinder/Bottomfinder to the Investor Timeframes 161 David G. Hawkins A Most Unusual Indicator 161 The Basic Program of the TB-F 162 What is an Accelerated Trend? 162 Discovering the Topfinder/Bottomfinder 163 Using the TB-F 165 An Interesting Mathematical Observation 166 Fitting the TB-F Curve in Chart Views Other than Equivolume 167 Fitting to More than One Pullback 170 Nested TB-Fs: The Fractal Nature of the Market 178 TB-F Curves on Different Timeframes 180 Bottomfinders Are Sometimes Problematic 185 What Comes after a TB-F Ends? 187 Summary 188 Part III: The Longer-Term Horizon, Other Volume Indicators, and Broader Perspectives Chapter 6 Applying MIDAS to Market Averages, ETFs, and Very Long-Term Timeframes 193 David G. Hawkins Using MIDAS with the Indices—The S/R Curves 195 The Validity of Volume Data 198 Using MIDAS with the Indices—The TB-F 201 Using Exchange-Traded Funds Instead of Market Indices 202 MIDAS Applied to Long- and Very Long-Term Timeframes 205 Back to 1871 209 Inflation Adjustment 209 A Closer Look at the Very Long-Term 211 The Very Long-Term Horizontal S/R Levels 213 The Bavarian Deer Herd 214 What Can Be Said about the Very Long-Term Future? 215 Summary 218 Chapter 7 EquiVolume, MIDAS and Float Analysis 219 David G. Hawkins The Basic Principle—“Volume Leads to Volume” 219 Why Does Price Projection Work? 221 The Connection between Price Projection and the Topfinder/Bottomfinder 223 Using Price Projection 224 Steve Woods’ Float Analysis 227 Volume Periodicity 230 Summary 237 Chapter 8 Putting It All Together 239 David G. Hawkins Trend Following 239 Calling Bottoms 249 Base Breakouts 251 Summary 254 Part IV: New Departures Chapter 9 Standard and Calibrated Curves 257 David G. Hawkins Discovering the Calibrated Curves 257 Examples 258 Summary 267 Chapter 10 Applying the MIDAS Method to Price Charts without Volume: A Study in the Cash Foreign Exchange Markets 269 Andrew Coles MIDAS and Cash Foreign Exchange Markets 269 A Comparison of the MIDAS S/R Curves Using Cash FX Intraday Tick Data and Intraday Futures Volume Data 270 A Comparison of the MIDAS Topfinder/Bottomfinder Curves Using Cash FX Intraday Tick Data and Intraday Futures Volume Data 273 Options in the Cash Foreign Exchange Markets for Higher Timeframe Charts 275 Options 1 and 3—Replacing Cash Forex Markets with Futures Markets or Currency ETFs/ETNs 276 Using MIDAS S/R Curves in Markets without Volume: The Daily and Weekly Cash FX Charts 277 Using MIDAS Topfinder/ Bottomfinder Curves in Markets without Volume: The Daily and Weekly Cash FX Charts 280 Summary 283 Chapter 11 Four Relationships between Price and Volume and Their Impact on the Plotting of MIDAS Curves 285 Andrew Coles Relationships between Price and Volume Trends and the Four Rules Affecting the Plotting of MIDAS Curves 286 Applying the Rules to Applications of Standard and Nominal MIDAS S/R Curves 290 Using Relative Strength or Ratio Analysis 294 Summary 296 Chapter 12 MIDAS and the CFTC Commitments of Traders Report: Using MIDAS with Open Interest Data 297 Andrew Coles An Overview of Open Interest and Open Interest Data Options 298 The Orthodox Interpretation of Changes in Open Interest 299 A First Look at Standard MIDAS Support/Resistance Curves with Open Interest 300 Pursuing MIDAS and Open Interest More Deeply 302 Concise Overview of the Commitment of Traders (COT) Report 302 Understanding the Main Players in the Legacy Report 303 Identifying the Key Players in the COT Report 304 Choosing the Appropriate Category of Open Interest 307 MIDAS and Total Open Interest 308 Choosing between Commercial and Noncommercial Positioning Data 312 Measuring the Market with Commercial Net Positioning Data 315 MIDAS and COT Report Timing 318 Comparing the Commercial Net Positioning Indicators with MIDAS using Noncommercial Net Positioning Data 319 Additional Reading 327 Summary 328 Chapter 13 Price Porosity and Price Suspension: The Causes of these Phenomena and Several Partial Solutions 331 Andrew Coles Porosity and Suspension Illustrated 332 Identifying the Cause of the Two Phenomena 333 Solving the Problem of the Two Phenomena 334 Summary 342 Chapter 14 A MIDAS Displacement Channel for Congested Markets 345 Andrew Coles The Problem: Mean Reversion in Sideways Markets 346 The Solution: Applying a Displacement Channel to Sideways Markets 348 MIDAS Displacement Channel Methodology 349 Trading Implications of the MDC 349 Additional Forecasting Implications 349 Additional Benefit: Applying the MDC to Trending Markets to Capture Swing Highs in Uptrends and Swing Lows in Downtrends 350 Second Benefit: Applying the MDC to the Problem of Price Porosity 353 Comparing the MDC with the Moving Average Envelope 355 The MDC in Relation to Topfinder/Bottomfinder (TB-F) Curves 356 The MDC in Relation to the MIDAS Standard Deviation Bands 356 Features of the MDC in Relation to other Boundary Indicators 356 Summary 357 Chapter 15 MIDAS and Standard Deviation Bands 359 Andrew Coles The MIDAS Standard Deviation Bands in Sideways Markets 360 The MIDAS Standard Deviation Bands in Uptrends and Downtrends 361 Band Adjustment for Shorter Timeframe Analysis 363 The MSDBs and Narrowing Volatility 363 Comparing the MSD with the MIDAS Displacement Channel 364 Alternatives to Standard Deviation 365 Trading with the MIDAS Standard Deviation Bands 368 Summary 370 Chapter 16 Nominal–On Balance Volume Curves (N-OBVs) and Volume–On Balance Curves (V-OBVs) 371 Andrew Coles On Balance Volume for the Uninitiated 371 Nominal–On Balance Volume Curves 373 The Dipper Setup 377 Volume–On Balance Volume Curves 377 Further Chart Illustrations 378 Summary 381 Chapter 17 Extensions, Insights, and New Departures in MIDAS Studies 383 Andrew Coles MIDAS Curves and Volume-Based Oscillators 384 Correlation Analysis as an Effective Overbought/Oversold Oscillator 389 The Contributions of Bob English 391 Summary 400 Appendix A Programming the TB-F 403 David G. Hawkins Appendix B MetaStock Code for the Standard MIDAS S/R Curves 411 Andrew Coles Appendix C TradeStation Code for the MIDAS Topfinder/Bottomfinder Curves 413 Bob English Notes 417 About the Authors 433 Index 435

About the Author :
ANDREW COLES, PhD, is an active trader running a private investment fund. He has a diploma in technical analysis from STA–UK and from the International Federation of Technical Analysts (IFTA). He is also a Certified Financial Technician (CFTe). He holds a master's and a doctorate and was a Postdoctoral Research Fellow of the British Academy. During his graduate and postdoctoral years, he worked at a number of institutions, including King's College (KQC) London, the Institute of Classical Studies, and Oxford University. He is the author of a previous book on the history and philosophy of science. DAVID G. HAWKINS is a successful full-time trader. He holds an MS in physics from Brown University, has taught physics at Roger Williams University, and has designed optical and ultrasound components for graphics, medical, and telecom systems. He presents on MIDAS and other technical analysis topics at AAII conferences.