Release Notes:
This indicator searchs for the lowest/highest bar in a given period. Then starts to calculate the average value since the low/high.
For example: if the price reaches a new 20 day low and then trades above it, the day of the low will be the ma1, the day after its the ma2, ... up to the maximum lookback length.
With this indicator we know the average low/high price since the last low/high, we do not force a moving average length on the chart but let the chart decided which length to use (days since the low/high).
We assume that a new trend starts with a low/high, so we dont want to have bars in the moving average which are not part of the trend.
Play around with it, I set the default lookback length to 20. So it looks for the 20 bar low/high but you might use other parameters.
What we want to see in the charts are green trends with shortlived countertrends, we want to buy near the average low price in a bull market and sell near the average high price in a bear market, so we have the lowest risk.
For example: if the price reaches a new 20 day low and then trades above it, the day of the low will be the ma1, the day after its the ma2, ... up to the maximum lookback length.
With this indicator we know the average low/high price since the last low/high, we do not force a moving average length on the chart but let the chart decided which length to use (days since the low/high).
We assume that a new trend starts with a low/high, so we dont want to have bars in the moving average which are not part of the trend.
Play around with it, I set the default lookback length to 20. So it looks for the 20 bar low/high but you might use other parameters.
What we want to see in the charts are green trends with shortlived countertrends, we want to buy near the average low price in a bull market and sell near the average high price in a bear market, so we have the lowest risk.