TT Series - Cryptocurrency Digital Asset Exchange Platform

Basic Patterns of the TT Indicator

The TT indicator is composed of a line that fluctuates frequently, often showing sharp peaks and troughs, along with two moving averages that fluctuate at different speeds and amplitudes.

The line, known as the TT line, reflects the current primary trend direction and its changes.

The faster moving average indicates the short-term trend direction and changes; the slower moving average shows the longer-term trend direction and changes, with a more gentle and stable shape.

Whether it is the line or the moving averages, an extension upward indicates that the upward trend at the corresponding level is the dominant current trend; extension downward indicates that the downward trend at that level is dominant; a relatively horizontal state suggests that the main trend at that level has entered a consolidation phase.

When the line gradually slows down or flattens amid fluctuations, it indicates signs of trend weakening. If this occurs at a high level of the indicator, regardless of how the candlesticks perform, it suggests that the upward trend is approaching a pause or imminent reversal. Conversely, if this occurs at a low level, it indicates that the downward trend is nearing a pause or reversal, regardless of candlestick performance.

If on a certain day, the price of the coin fluctuates wildly with huge trading volume, with fierce battles between bulls and bears, but the closing price remains the same as the previous day, then the market situation on that day, which contains rich or even key information, will leave no trace in the TT indicator. From a trend analysis perspective, this day experienced a dramatic change in trend, ending in a stalemate. The TT only extends without fluctuations, objectively reflecting the trend change outcome of that day, which is of very clear significance.

The same logic applies to moving averages. The steeper the extension angle, the stronger the main trend; the gentler the angle, the weaker the trend and the faster it dissipates. When a moving average flattens, it indicates that the main trend at that level has entered a consolidation phase, which may continue in the future, but it is also very possible that a trend reversal has already begun.

Do not expect the three lines of the TT indicator to show phenomena like support or resistance; they do not follow that logic. Whether the main trend is driven by major players to manipulate market sentiment or by market sentiment itself, they do not care about historical face; they evolve solely based on the specific factors at that time.

Whether there has been a rights issue or whether adjustments for rights issues have been made will have a significant impact on the shape of the TT and the directions and relative positions of the lines. Without adjustment, this influence cannot be eliminated; only time can gradually smooth it out. This is not a flaw of the TT indicator; all technical indicators are affected by rights adjustments. Whether it is pre-adjusted, post-adjusted, or fixed-point adjusted, different choices have minimal impact on the shape of various technical indicators, including TT.

From the TT calculation formula, we can clearly see that sudden large volume surges during price rises or falls cause the volume ratio to become large, significantly amplifying the TT curve’s fluctuations. Rapid volume contraction results in a volume ratio much less than 1, greatly reducing the amplitude of TT’s fluctuations. Conversely, upward price movements often involve volume surges, consuming significant energy; downward movements usually do not require large volume consumption, with prices falling under gravity.

The TT indicator reacts sharply to volume surges, especially sudden ones, which often occur during price increases, while during declines, volume tends to shrink or rapidly contract. This makes TT more sensitive to upward trend changes and less responsive to downward trend changes. This is not a flaw but an objective law of market behavior; TT faithfully reflects this law.

Under this law, TT lines and moving averages often appear to be “whitewashed” during declines, lacking warning or shock. After an upward move, when candlesticks are clearly declining, due to volume contraction, TT lines and moving averages may still be flat, which can be misleading. Be aware of these characteristics when using TT.

Additionally, TT uses an accumulation method for calculation. The cumulative effect over days and months causes the TT curve of almost all coins to gradually trend upward overall, which does not mean all coins are in a long-term bull market. In shorter periods, this effect is less obvious and does not significantly mislead daily market analysis. Because of this law, using a 30-period moving average as the slow average is suitable; for longer trend analysis, weekly charts are recommended to avoid the influence of this factor.

TT and Market Trends

TT reflects the dynamics of the main trend, which influences price movements, and price movements affect profit and loss. Therefore, TT has clear reference and guiding value for trading, mainly in the following aspects:

1. As explained in detail in section 2.4, the principles of investment value and trading value differ. When an upward trend becomes dominant, individual coins gain trading value; during a strong main trend, holding positions steadily is a basic strategy, and daily price fluctuations can be used as short-term trading opportunities. Conversely, if the downward trend becomes dominant, individual coins lose trading value; holding positions in a weak main trend can be a fatal mistake. Staying in cash and waiting for a rebound is a wiser strategy; attempting to catch daily fluctuations in such conditions is very risky.

2. When the TT moving averages reverse direction, it indicates that the transition between the main trend and the countertrend has been completed, and the main trend reversal is finished. This means the coin has gained or lost trading value at that level, requiring a fundamental adjustment in trading mindset and strategy.

3. When the TT line and the fast/slow moving averages significantly slow down their slope, TT is most valuable for reference and guidance. Near TT peaks, watch for reversals in coin price trends that pose risks; near TT lows, look for opportunities that contain value for risk avoidance and profit capture.

From trend analysis, if the coin price is close to a buy point, observe the smaller-level TT for signs of trend weakening, then combine with intraday market analysis and MACD signals to precisely catch buy points. If the signal indicates the price is near a sell point, observe the smaller-level TT for signs of trend weakening, then analyze intraday charts and MACD to find precise sell points. TT’s leading capability helps timely grasp trading opportunities.

Details on trend analysis and buy/sell points will be explained in Chapter 7.

Do not directly interpret trend reversals as signals that buy or sell points have arrived. Trend reversal is a process; during this process, various market phenomena occur, and it is not simple. Buy or sell points should be identified through market observation, not solely by indicators.

Relying only on TT to choose buy or sell points is not advisable. Even with multiple indicators, you will find that only in very special cases—such as when a specific buy or sell decision has been confirmed for a coin, and MACD is used to catch intraday signals—can this approach work. Otherwise, it is generally a dead end. Use technical indicators as references, and also analyze other factors to determine buy or sell points.

As an indicator that directly faces trend changes, TT’s ability to reflect the rise and fall of energy trends is undoubtedly useful for trading reference. After reading the fourth chapter on technical patterns and the seventh chapter on trading, and gaining practical experience, you will have a deeper understanding. Trend analysis is the reliable way to determine buy and sell points; trend analysis is just one of the three major tools in market analysis, among which TT is merely a tool.

TT and K-line Trend Coordination

TT emphasizes trading volume, with volume being the main component. K-line focuses solely on price movement patterns and ignores volume. Their perspectives focus on different aspects, and it is normal for them to sometimes be out of sync.

However, the trend is the behind-the-scenes force driving K-line movements. The law of rising prices with increasing volume and falling prices with decreasing volume often pulls them together. Sometimes, untraded surges or large-volume drops occur unexpectedly, obstructing or counteracting TT and K-line coordination, adding various influences.

Overall, TT and K-line tend to move in the same direction because the underlying driver of price movement is the trend, which TT reflects. Understanding this background helps interpret discrepancies, which often carry meaningful implications.

1. TT leads.

The appearance of strong or weak TT usually does not coincide exactly with the reversal of K-line strength; TT tends to lead, which is because volume leads price, and TT reflects the main trend’s direction, while K-line is driven by the trend, resulting in lag. This relationship makes TT a useful predictor of K-line movement, and this foresight is valuable.

Not only does TT lead, but moving averages also exhibit this phenomenon. When the main trend is nearing exhaustion, the strong or weak trend often shows signs of leading the reversal, which is especially significant for medium- and long-term investments and larger capital stages. Example in Figure 2.13-4 illustrates this.

Figure 2.13-4

This is a daily chart. When the candlestick in the first box is still declining, the TT line and the fast moving average have already flattened ahead of the candlestick, indicating the downward trend is exhausted and entering a consolidation phase. In the second box, as the candlestick rises, TT and the fast moving average again lead the price, signaling the upward trend is weakening and entering a pause. This pattern demonstrates how TT’s leading signals can be very clear.

2. Divergence between TT and K-line direction.

If the K-line is at a low point without a clear upward trend, but TT shows a significant upward trend, even lifting the fast moving average, it often indicates new major funds are entering to accumulate.

Figure 2.13-5

If during a decline in K-line, TT gradually stabilizes or turns upward from a previous decline, it suggests the upward trend is developing rapidly. Figure 2.13-5 shows this. The chart clearly shows TT and the fast moving average flattening and rising during a downward fluctuation, indicating the upward trend is quietly developing during the decline. Trend development and maturity are still some distance apart, so this phenomenon may be a signal that the bottom is near, but it does not exclude the possibility that major players will further induce decline to accumulate.

When K-line is at a high level and TT shifts from upward to sideways, it indicates the upward trend is showing signs of fatigue, often a top signal. If at this time TT accelerates downward without a significant drop in K-line, caution is needed, as it may indicate major players are carefully maintaining the price while accelerating distribution. Example in Figure 2.13-4 illustrates this.

If during intraday trading, K-line continues to rise or fall while TT’s fast average remains sideways, the K-line action may be manipulative.

3. Same direction for TT and K-line, but with clear fast/slow differences.

When K-line rises, TT’s ascent is slow, indicating insufficient upward momentum. If the price is at a low level, it may be due to high holding concentration, which is not necessarily bad. But if the price is high, caution is needed as the main trend may lack strength. Extreme slow extension to sideways suggests the main trend is entering a consolidation phase, possibly near a reversal.

When K-line declines, TT’s decline is also slow, which is normal; sideways movement is also normal, as prices can decline steadily with stable or shrinking volume. Like rowing against the current, if you do not exert effort, you will regress.

If the price is at a low level without rapid decline, but TT accelerates downward, even dragging the fast average down, it indicates significant volume surges that are difficult to fall. If no major negative factors exist, the price is likely approaching a bottom.

If TT’s upward speed greatly exceeds the K-line’s, it is an obvious anomaly. Slow K-line rise indicates slow price increase; what can accelerate TT upward? Volume. If volume growth significantly exceeds price increase, it suggests strong distribution pressure, which is volume stagnation and price resistance.

If the price is at a relatively high level and TT’s slope is much steeper than the price increase, it indicates the upward momentum is being rapidly consumed, often a sign of major players distributing during the rise.

If the price is at a low level and TT’s upward momentum exceeds the price increase, it may indicate large-scale accumulation, which is rare. It could mean an important opportunity or imminent suppression. During suppression or consolidation, accumulation is normal.

Trend Reversal and Trend Change via TT

Most of the time, TT values are positive, but negative values can also occur. Whether TT is positive or negative, the magnitude has little practical significance; what matters are the direction and slope of the TT line and the two moving averages.

Regardless of TT being positive or negative, the directions of the fast and slow moving averages always indicate the current short- and medium-term main trend directions. The TT line itself indicates the trend’s change. An upward fluctuation indicates the upward trend is changing; a downward fluctuation indicates the downward trend is changing. Horizontal extension suggests the main trend at that level has entered a consolidation phase. After sufficient consolidation, the direction of TT and the moving averages will tend to continue, with the slow average being more persistent than the fast. The fast average is more sensitive to trend changes.

When the TT line is above the fast average, it indicates a relatively strong state, called TT strength. If this persists for a long time, the two averages will show a pattern of fast above slow, indicating a strong main trend. This reflects a normal continuation of an upward trend.

When the TT line is below the fast average, it indicates a relatively weak state, called TT weakness. If this persists, the averages show slow above fast, indicating a weak main trend, typical of a downward trend.

Both TT strength and weakness are states of significant trend change. TT strength appearing in a strong main trend indicates continuous development of the upward trend; similarly, TT weakness in a weak main trend indicates ongoing development of the downward trend. In these states, the main trend remains relatively stable, and a rapid trend reversal is not necessarily imminent.

In fact, in the coin market, many examples show TT lines moving on one side of the fast average for a long time, which is a natural manifestation of trend-following and herd mentality. However, if the slope of TT or the moving averages becomes too steep, the stability and continuity of the trend diminish, reflecting the law of extremes. This often signals an impending reversal.

In a strong main trend, if TT weakens, the slopes of the averages will gradually flatten, indicating the upward trend is dissipating faster, and the downward trend is accelerating. Conversely, in a weak main trend, if TT strengthens, the slopes will flatten, indicating the downward trend is dissipating, and the upward trend is developing.

The relationship between the fast and slow averages follows the same principle. When the fast average is above the slow, it indicates recent strength; below suggests weakness. An increasing gap indicates vigorous trend development; narrowing suggests trend exhaustion and possible reversal.

In a recent strong phase, if the fast average extends upward, the strength can continue; if it flattens, the trend may be nearing its end. A downward turn in the fast average indicates a short-term reversal, ending the recent strength.

Similarly, in a recent weak phase, if the fast average extends downward, weakness persists; if it flattens, the weakness may be ending; an upward turn indicates a short-term reversal, ending the weakness.

The trend’s direction and strength are crucial for the trading value of individual coins. The stability of the trend diminishes at smaller levels; today’s trend may change tomorrow. Do not rely solely on TT for trading decisions; it is useful but not sufficient.

Besides position and slope, distance is also very important. The distance between TT and the moving averages, and between the two averages, reflects the current trend strength and the differences between short-, medium-, and long-term energy. Larger distances indicate vigorous trend development; smaller distances suggest trend exhaustion. Increasing distance signals trend acceleration; decreasing distance indicates trend weakening and possible reversal.

When the fast average extends upward in a recent strong phase, it indicates ongoing strength; if it flattens, the strength may be ending. A downward turn signals a short-term reversal.

In a recent weak phase, if the fast average extends downward, weakness persists; if it flattens, the weakness may be ending; an upward turn indicates a reversal.

The overall trend direction and strength are key to the trading value of coins. The smaller the timeframe, the less stable the trend; it can change quickly. Do not blindly follow the trend; use it as a reference.

Apart from position and slope, distance is also crucial. The distance between TT and the moving averages, and between the two averages, reflects the current trend’s strength and the differences across timeframes. Larger distances mean stronger trends; smaller distances suggest weakening.

A shift from small to large distance indicates trend acceleration and energy release, which can lead to trend exhaustion but also potential continuation. A shift from large to small indicates trend deceleration, possible consolidation, or approaching reversal.

Crossovers are inevitable when lines intersect; similar to moving averages and MACD, the focus should be on whether the crossover is caused by changes in slope and direction, not just the crossing itself.

When the TT line or a moving average changes direction, it indicates a trend reversal at that level, which is a significant event, especially for moving averages. Changes in slope indicate a change in trend strength; flattening slopes suggest trend exhaustion and possible convergence.

If the TT line remains at a certain distance from the moving averages, it guides their direction. Strong TT makes the upward average steeper and the downward average flatter; weak TT does the opposite. Changes in slope are important and often precursors to trend reversals.

If the TT line consistently maintains a certain distance from the moving averages, it influences their direction. When TT is strong, the upward average tilts more steeply; when weak, it flattens. These slope changes can often signal an upcoming reversal.

When the TT line and the moving averages are close or intertwined, it indicates a potential trend change. This is similar to moving average crossovers. Monitoring the slopes and slopes’ changes is essential.

If the TT line and the two moving averages all converge and extend horizontally, it often signals an imminent major trend change.

Turnover Tide (Volume Energy) TT

The Turnover Tide (TT) indicator is a technical tool based on volume. We already know that trading volume reflects energy, and energy is an external manifestation of trend. Therefore, TT is designed to reflect the development, evolution, and change of the main trend through volume.

TT is based on a simple modification of the On Balance Volume (OBV) indicator, which is widely used. Let’s start with OBV.

OBV (On Balance Volume), also called balanced volume or cumulative energy line, is a technical indicator based on volume and price change direction, proposed by American analyst Joe Granville in 1981. In China, the initial chart software used the name “Balanced Trading Volume.” Later, OBV gained popularity among Chinese market analysts and was renamed “Energy Tide,” a name that is catchy and easy to understand. Other volume-based indicators exist, but OBV is one of the simplest and most important.

OBV calculates by cumulatively adding or subtracting volume based on price movement direction:

Current OBV = Previous OBV ± Current Volume

The concept of “period” has been encountered multiple times; it can be seconds, minutes, trading days, weeks, months, etc. The period depends on the analysis context.

The “+” or “−” sign indicates addition or subtraction. Volume is always positive; an increase adds to OBV, a decrease subtracts. If the closing price remains unchanged from the previous period, OBV stays the same.

In practice, OBV is often plotted with a moving average, typically a 30-period average, to smooth out fluctuations and reveal the mid-term trend.

OBV’s calculation is very simple, but its logic is profound. It has proven to be very useful. Simplicity often equals effectiveness, much like how chopsticks replaced forks in Chinese tableware evolution.

Because actual trading involves frequent volume fluctuations, OBV curves often show sharp peaks and troughs, forming zigzag lines. For convenience, these sharp reversals are called “peaks” or “troughs,” and the entire curve is called a “zigzag.”

TT is derived from OBV, so they share similarities. But OBV focuses on volume, while TT targets the main trend, making their core differences significant.

1. From OBV to TT

TT makes two simple modifications to OBV.

1. Replace volume with the volume ratio (turnover ratio).

TT is based on turnover, which includes both price and volume factors, directly reflecting energy. Usually, price change impact on turnover is much less than volume change, so directly using turnover in the formula would mask volume effects. Therefore, TT uses the ratio of current turnover to the average turnover over the last 125 periods. This ratio reduces the influence of price change on volume, making the indicator more sensitive to volume fluctuations. Using a longer period average as the base enhances this sensitivity. The key for trend analysis is the change direction and magnitude of turnover, not its absolute value. This substitution does not negatively affect the calculation and meets practical needs.

Thus, replacing volume in OBV’s formula with the turnover ratio completes the fundamental transformation of the indicator’s concept and direction.

TT is calculated similarly to OBV, by simple accumulation, but the underlying logic is deep. Trend development and decline are both gradual processes driven by cumulative volume changes, embodying the law of trend evolution.

Just as volume is always positive, the turnover ratio is also positive. Volume can be large; the ratio is a small number. When energy expands, the ratio > 1; when it contracts, < 1; when stable, close to 1.

2. Add a moving average line.

OBV uses a 30-period moving average for medium-term reference. For short-term trading, this may be too insensitive. TT retains the 30-period moving average, called TT30 (slow average), and adds a 5-period moving average, TT5 (fast average), to reflect recent trend levels and changes, suitable for short-term trading.

This turns TT from a zigzag line around a single line into a line moving around two averages. Usually, TT line stays close to TT5, reflecting its sensitivity. TT30 changes slowly, indicating stability.

Both averages can be adjusted easily.

In the chart software, right-click on any blank area of the K-line chart, select “Indicator Window Count,” then choose “3 windows.” The secondary indicator window appears below volume bars. Select OBV to display its curve, as shown in Figure 2.13-1.

Figure 2.13-1

If OBV is not listed, click “Settings” at the bottom of the indicator list, find OBV in the left panel, add it to the right panel, and it will appear below.

Click the icon in the upper left corner, select “Modify Current Indicator Formula,” which opens the formula editor (Figure 2.13-2). This contains the OBV source code and editing interface, the blueprint for modifying indicators.

Figure 2.13-2

The source code for TT can be generated by modifying the OBV source code in this interface.

First, rename the formula and description.

Next, define parameters for the two averages: M1 (fast average) range 2-20, default 5; M2 (slow average) range 20-60, default 30. Adjusting these helps in short- and medium-term analysis.

In the source code, insert the turnover ratio calculation before the OBV calculation; replace volume with the ratio in the second line; continue with subsequent replacements; finally, define the two moving averages.

Creating a new indicator this way is not complicated. After modifications, the original OBV code becomes the TT formula code as shown in Figure 2.13-3.

Carefully verify all changes, then click “Save As” in the editor to complete the TT formula input.

Next, click the “Settings” option in the middle of Figure 2.13-1, which opens the system settings interface. Find the red TT indicator in the left panel, select it, then click “=>”, moving it to the right panel of secondary indicators. TT will appear immediately below the main chart.

In the secondary indicator list, select TT, then click “Move Forward” or “Move Back” to adjust its position for easier access.

After completing all steps, click “OK” at the bottom of the settings window to finish setup and start using.

**$FTT **$BTT **$BRETT **