OB - overbought (sell)
OS - oversold (buy)
A trend is identified with the correlation factor when the line is showing +/- 0.5 - 20 bar history is found to work the best for any time-frame.
Signals for stochastic buy and sells should be used for accumulation and distribution of a trading position. They are not signals for long term reversals and they should be used in tandum with the time-frame they were given on.
Ex. Time Frame Trade Periods: 1hr (BUY) - 5hr hold (estimate) - 1hr (SELL)
Stochastic settings work best as (8, 3, 3) or (14, 3, 3).
To use correlation feature, remove the comments in the source code. Although, I would read the paper or look at how the signal is produced.
John F Ehlers (I cannot post links yet): Google John F Ehlers Correlation as a Trend Indicator
The signals are quite easy but have, imo, proven to show strong sings of volume/reversal (buying/selling) zones. The settings for stochastic should not be changed as the (8, 3, 3) intervals are perfect and are used quite largely in banking. I'll be updating this more as to test strategies and give more clear alerts for automation.
The whole position flag should just be used as a tool along with any other confirmations you have as its only indicating extremely overbought or oversold levels and these conditions may persist for another bar or two.
Use 4hr time frames from what I've seen works best. These signals can be used in the complete opposite way during downtrends, meaning you would short the sells and buy, obviously.
- Continue to use stoch (8, 3, 3) with 4hr time frame
- Use the line as a volatility indicator, usually the sell signal will occur before it breaks (ikr) but just to be sure if you're trading watch if it breaks, and reconfirms the line.
- You can have 1hr time frame with 2hr signals
- Play around with it to see
I suggest using whatever timeframe to below the signal queues to see how they act as resistances
- You can turn things off in the settings menu, these additional features are for people without PRO and who like to use more than tradingview allows
- - You can now choose your own signals to produce for whatever asset
- Use stochastic, rsi, money flow indicator, and this one to search for your signals (try things out)
- Higher time frames work best but lower ones can be tuned with time.
- Heikin Ashi produces very good signals for PURPLE/ORANGE signals but loses Lelec (ill fix this)
- New Settings Menu/Layout (better labeled)
- Binary Signals - produces long/short/long/short etc signals (stop-loss not ready yet)
- Stochastic Signals - produces a signal on LL crossover of stochastic(k, d) over 1000 and 500 bars ago, and does so with HH
- VWAP Moving Averages (experimental) - See if you can get anything out of it. Basically strong uptrends form when the price is over certain color moving averages. They move faster when the momentum of the VWAP is higher (slope is steeper).
How to use:
- Settings that are chosen are a lookback period of 10 bars and 10 signals of exhaustion, where exhaustion is set to count when close is > close for bull bars ago and close < close for bear. This means a reversal can be around the corner. If the market uses it as resistance, take trades at or near it and also for support. If the price breaks through, close your trade and wait.
- Use higher timeframes or experiment with "HH/LL over what Period?" parameters
- If you have binary set to true and price breaks s/r get out, I'll add a stop-loss feature soon, to alert you automatically
- Don't use too many indicators at once, there's a lot and I'll add more as time goes on
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.