ondra.novacisko.cz

Profit target area

Update.
- you can specify count of bars used to detect reversal pattern
- you can specify count of bars used to determine lowest or highest price to place support or resistance
- area between lines is filled by green - ascending, red - descending trend

To trade:
- open position using stop command on S/R
- close position using limit command on retracement line
- close position when background colour indicates trend change

(erratum: last balloon on right should say "buy limit")
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study("Profit target area", overlay=true)
bars =input(title="Reversial pattern length (bars)", type=integer, defval=3, minval=1)
exbars = input(title="S/R detection (bars)", type=integer, defval=10, minval=1)
descent_cnt = high <= nz(high[1])?nz(descent_cnt[1])+1:0
ascent_cnt = low >= nz(low[1])?nz(ascent_cnt[1])+1:0
descent = descent_cnt >= bars
ascent = ascent_cnt >= bars
st = ascent?true:(descent?false:nz(st[1]))

h = st[1] and not st?highest(high,exbars):nz(h[1])
l = not st[1] and st?lowest(low,exbars):nz(l[1])
f = h - l
h38 = l + f/(1-0.382)
h62 = l + f/(1-0.618)
l38 = h - f/(1-0.382)
l62 = h - f/(1-0.618)

modeline = plot(st[0]?l:h,color=white,title="invisible plot", style=cross)
ph = plot(h,color=green, title="resistance")
pl = plot(l,color=red, title="support")
p3 = plot(h38, color=#80FF80, title="38% above")
p1 = plot(h62, color=#C0FFC0, title="62% above")
p2 = plot(l62, color=#FFC0FF, title="62% below")
p4 = plot(l38, color=#FF80FF,  title="38% below")
fill(p1,p3,color=#80FF80, transp=80,  title="62% above")
fill(p3,ph,color=#00FF00, transp=80,  title="38% above")
fill(p2,p4,color=#FF80FF, transp=80,  title="62% below")
fill(p4,pl,color=#FF00FF, transp=80,  title="38% below")
fill(ph,modeline,color=green, transp=90, title="going up")
fill(pl,modeline,color=red, transp=90, title="going down")

Really interesting. Thank you very much for sharing this tool with us. Here is my test of this indicator:

snapshot
Reply
A question about "close position using limit command on retracement line."
What is the retracement line?
Thanks
Reply
A line, where the price probably will start to retrace back. It is most upper or lower line (for 61,8% retracement) or second upper or lower line (for 38,2% retracement).
Reply
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