OPEN-SOURCE SCRIPT
Updated Time Price Indicator
Introduction
There are already several indicators who measure the time behavior relative to price, the most well know being the Aroon indicator published by Tushar Chande. I propose an alternative indicator TPI who tend to create less whipsaw's at the cost of small reactivity.
The Indicator
The TPI is in a range of 0.5/-0.5 and is no different than the Aroon indicator when it come to signal generation, when the upper line (in blue) crossover the lower line (in orange) the indicator generate a buy signal, when the lower line cross under the upper line a sell signal is generated.
Comparison
The Aroon indicator tend to use more information which involve more reactivity but more uncertainty as well.
Aroon and TPI with both length = 50. White lines represent signals where the Aroon and my proposed indicator react at the same time, the red line show a whipsaw and the green line show a signal generated faster by the Aroon.
Here is a more pertinent exemple
Aroon reacted to price range which at the end involved many whipsaw, the TPI however stayed on a sell signal and did not reacted to this price range. The cost to avoid so many whipsaw was a reactivity of 7 bars back when the sell signal of the TPI was generated.
A statistic of the signal numbers generated by both indicator is shown below
The blue line show the number of signals generated by the Aroon indicator and in orange the number generated by the TPI with both length = 14. Aroon generated 410 while the TPI generated 288 signals.
Conclusion
The Aroon indicator and TPI can both generate a signal at the same time or with a small period deviation with the ability of the TPI to avoid some whipsaw.
There are already several indicators who measure the time behavior relative to price, the most well know being the Aroon indicator published by Tushar Chande. I propose an alternative indicator TPI who tend to create less whipsaw's at the cost of small reactivity.
The Indicator
The TPI is in a range of 0.5/-0.5 and is no different than the Aroon indicator when it come to signal generation, when the upper line (in blue) crossover the lower line (in orange) the indicator generate a buy signal, when the lower line cross under the upper line a sell signal is generated.
Comparison
The Aroon indicator tend to use more information which involve more reactivity but more uncertainty as well.
Aroon and TPI with both length = 50. White lines represent signals where the Aroon and my proposed indicator react at the same time, the red line show a whipsaw and the green line show a signal generated faster by the Aroon.
Here is a more pertinent exemple
Aroon reacted to price range which at the end involved many whipsaw, the TPI however stayed on a sell signal and did not reacted to this price range. The cost to avoid so many whipsaw was a reactivity of 7 bars back when the sell signal of the TPI was generated.
A statistic of the signal numbers generated by both indicator is shown below
The blue line show the number of signals generated by the Aroon indicator and in orange the number generated by the TPI with both length = 14. Aroon generated 410 while the TPI generated 288 signals.
Conclusion
The Aroon indicator and TPI can both generate a signal at the same time or with a small period deviation with the ability of the TPI to avoid some whipsaw.
Release Notes
Updated to v4Custom calculation for rising and falling
Release Notes
some correctionsOpen-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Check out the indicators we are making at luxalgo: tradingview.com/u/LuxAlgo/
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Check out the indicators we are making at luxalgo: tradingview.com/u/LuxAlgo/
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.