Published By TradeSmith Customer Success
When the current VQ is significantly higher than the average VQ, it is like extra kinetic energy that can push cryptocurrency higher.
For cryptos to qualify for this strategy, they must meet the following requirements:
- Cryptos are in the Health Indicator Green Zone
- Trending up or sideways
- Average VQ is at or under 60%
- Current VQ needs to be at or under 80%
- Current VQ is 20% or greater than Average VQ%
Let’s look at this strategy in a little more detail.
In brief, we find the concept of kinetic energy in physics. It’s the force required to accelerate an object from a state of rest up to a given velocity. Think of a professional baseball pitcher who throws 95 mph fastballs. Kinetic energy is the amount of energy the pitcher needs to generate with his body in order to get that baseball up to 95 mph when it leaves his hand.
Kinetic VQ cryptos are like a baseball that’s about to leave the hand of the pitcher. They’ve got extra built-up energy behind them. We detect that extra energy by comparing the current VQ on the stock to its long-term average VQ. When the current VQ is significantly higher than the long-term average VQ, it’s like extra kinetic energy behind the stock that can propel the stock on to its next big move.
Of course, we want that move to be in the right direction! Just as it’s critical that the pitcher release the ball at exactly the right moment, it’s also critical that we get the timing right before we buy into a stock with KVQ. That’s where the TradeStops Health Indicator comes into play; we wait for the Health Indicator to change from Red to Green.
The KVQ strategy works like this:
- Look for stocks that have a higher current Volatility Quotient (VQ) than their long-term Average VQ and
- Have recently changed from the Health Indicator Red Zone to the Health Indicator Green Zone
Be sure to visit the Crypto Kinetic VQ lab to see which cryptos qualify for this strategy.
If you don’t have access to the Crypto Lab and would like more information, please call our Dedicated Sales team at 866-220-1107.