fareidzulkifli

Mean Reversion Channel - (fareid's MRI Variant)

Description :
Mean Reversion Channel objective, based on Mean Reversion theory ( everything has a tendency to revert back to its mean), is to help visualizing:
Inner Channel -> Dynamic Support and Resistance
Outer Channel -> Overbought/Oversold Zone which may signal consolidation phase or potential reversal due to unsustainable move

Details on some of the filtering type used for mean calculation can be read in Ehlers Technical Papers: "Swiss Army Knife Indicator" and/or his book "Cybernetics Analysis for Stock and Futures"

Disclaimer:
These study scripts was built only to test/visualize an idea to see its viability and if it can be used to optimize existing strategy.
Any ideas to further improve this indicator are welcome :)
Release Notes: v2.0 Change log:
1. Added Format Inherit
2. Added line extension with labels
Release Notes: v2.1 Change log:
1. label position use bar_index instead of bar_time (bar_time doesn't work as expected approaching week end/week open)
Release Notes: - Added option to adjust the channel size
- Added option to disable line extension and labels
- updated disclaimer in source code
- cleaning code

Notes: Screener for this indicator now available here.
Release Notes: Major Update

█ New Features

1) Multiple Timeframe Analysis
- The script will scan up to 2 higher timeframes (HTF) for its status/condition
- User able to select HTF type (Auto or Custom)
- For Auto HTF, the script will automatically recommend HTF to be scanned
- For Custom HTF, the script will scan the user defined HTF based on the user input screen
- The MTF will also calculate the distance of last traded price from each TF's Mean, displayed as % of last traded price.

2) Display Mode
- Now user able to display/hide the channel
- HTF Status Label available in 2 display mode (Always Display / On Hover)
- For Always Display Mode, the HTF will always be displayed
- For On Hover Mode, the HTF will be displayed only when mouse hovered above the Check MTF label
- Notes: The script will override and always disabled the Line Extension if HTF is enabled and the mode is always displayed

Example:

On Hover Mode without Line Extension

Always Display Mode

MTF Disabled


█ Features Removed

1) Price label removed since TV's built-in price label offered better/cleaner label (To enable it, go to Setting > Chart Setting > Scales > Indicator Name Label)


Thanks to @combotrading for his feedback/idea on HTF
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Comments

hi mate!

this is the indicator I was saying that HTF will make it nearer to perfect :)
+4 Reply
fareidzulkifli combotrading
@combotrading, hmm plotting the zone based on htf might not be a good idea especially when the chart is on auto scale mode.

Although i might be able to come up with something close to that, maybe next week :)

Thanks for your input and Happy New Year!
Reply
fareidzulkifli combotrading
@combotrading, hello! I added the HTF features, feel free to check it out and give feedback if you have any idea to further improve it :)
Reply
A very nice indicator, thank you very much. Will probably use it in my long-term investing as an additional tool. For me this seems to be much better than bollinger bands, because they always stick heavily to the price action, this indicator here doesn't, it rather follows the price very smoothly. The only problem I have is that sometimes when relatively big crashes occur, the bottom part of the indicator tends to fall low, sometimes very low (on daily crypto timeframes or weekly/montly for stocks, as they have lower daily volatility), which wrecks the log scale, sometimes goes even to 0 and below 0. I guess I will have to use manually adjust the Y axis more often. But other than that, great work man.
+1 Reply
fareidzulkifli ZipperZbieracz
@ZipperZbieracz, thanks for your kind word and input. Yes the idea is to have channels that can act as an ‘anchor’ to the price rather than reacting to it.

For crypto, im not trading crypto so i didnt test extensively on it, but i’ll make sure to look into it

As for weekly/monthly stock chart, its a known issue but i initially dont put too much emphasis on it because I rarely use such high timeframe, and the issue mostly because by default im using 200 bar data and many stocks dont have that long history data. Im already working on some handling for that, meantime, as a workaround, u can try change the setting to use 100 bar ema and see if its working out for u.

Thanks again and let me know if you encounter any other problem :)
+1 Reply
this is gorgeous
+1 Reply
fareidzulkifli misterstealyourgirl
Reply
I find this script quite pleasing to view and started using it for my intraday charts. You did a great job!! My sincere thanks for sharing it.
+1 Reply
@townsolan, Thanks! Glad to know the the script is making some contribution. please let me know if you have any idea for improvement :)

p/s: i've updated the script to add some options for customization so be sure to update your chart accordingly :) I also published a screener version for this indicator (link in description) if you are interested.
Reply
Thanks for your hard work! This looks great
Reply
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