So today is rest and research Sunday and I wanted to share with folks how I go about creating new strategies and indicators. Hopefully this can teach traders to fish rather than giving them just the fish (of a buy/sell signal!)
I was inspired by watching a Youtube podcast Desiretotrade by Etienne Crane where I saw on his chart arrows indicating where price closed outside of a Bollinger Band followed by price closing back inside. This made me want to test such a price action phenomenon myself and to do that I needed to code it up.
I'm really a hacker when it comes to programming and Pine Script but I began coding from ZERO knowledge and my tricks, which I share, should hopefully help new Tradingview/Pine Script coders. GOOGLE IS YOUR FRIEND!!! It has all the answers if you just type the correct search :)
Unfortunately, I did not realize that Tradingview cuts off videos at 20 minutes. Oops! I got the meat of the indicator and process of using it all recorded and got cut off as I was cleaning up the code to make it more user friendly. I'll know to keep track of time for the next video!
Please let me know if this was helpful to traders... I get motivated by positive vibes to do more teaching!
Comment
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I have published my finalized code in this Open Script:
Pardon the expression, but fiddling with the RSI Stoch numbers is missing the elephant in the room - TREND! Since the "Trend is you Friend" rule is supreme and supercedes everything else, the effective indicators for that are ...
1. MACD at a broad level (above zero line is bullish, below is bearish), the MACD divergence (sign of weakening trend nearing reversal, which happens when MACD is about to cross zero to the "other side") and
2. Slope of Bollinger bands + MA. If Bollinger is flat, it is rangebound and if it is sloping up or down, its in appropriate trend. This tells us why you have so many false bearish signals during a steep bullish trend as the price is constantly going out and returning within upper band. So, if you used trend as a filter, all these signals would disappear !!! :)
There are a bunch of other rules even within these two if we want to go further down the rabbit hole :).
JohnWick009
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wonderful .Keep sharing such valuable content ...More power to you !
lifemillion
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Thank you for sharing , good stuff
asw23
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This is a good one, great work!
rishpops13
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How can I use this indicator? Can you publish it, if not can you copy the code please?
norok
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@rishpops13, I added a comment to my original post with the Script. You can add it from favorites there or copy the code.
rishpops13
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@norok, Thank you, It is working perfectly, is there a way we can edit the script to give us the notification when eveb there is a signal ?
fabiobmk
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@norok, where can I find your original post? Regards
Since the "Trend is you Friend" rule is supreme and supercedes everything else, the effective indicators for that are ...
1. MACD at a broad level (above zero line is bullish, below is bearish), the MACD divergence (sign of weakening trend nearing reversal, which happens when MACD is about to cross zero to the "other side") and
2. Slope of Bollinger bands + MA. If Bollinger is flat, it is rangebound and if it is sloping up or down, its in appropriate trend. This tells us why you have so many false bearish signals during a steep bullish trend as the price is constantly going out and returning within upper band. So, if you used trend as a filter, all these signals would disappear !!! :)
There are a bunch of other rules even within these two if we want to go further down the rabbit hole :).