It uses two , a fast and a slow one, both configurable by the users.
The trigger of Buy and Sell Signals are calculated through the crosses:
- Buy Signals: The fast crosses over the slow . They are highlighting by a green area and a "B" label.
- Sell Signals: The fast crosses under the slow . They are highlighting by a red area and a "S" label
The trigger of Close Buy and Close Sell Signals are calculated through the close price crosses with the fast SMMA:
- Close Buy Signals: The fast crosses under the close price and at the same time the trend is , so the fast is greater than the slow . They are highlighted by a lighter green area
- Close Sell Signals: The fast crosses over the close price and at the same time the trend is , so the fast is lower than the slow . They are highlighted by a lighter red area
Few important points about the indicator and the produced signals:
- This is not intended to be a strategy, but an indicator for analyzing the conditions. It gives you the triggers depending on the real time analysis of the and prices, but not being a proper strategy, pay attention about "fake signals" and add always a visual analysis to the provided signals
- Following this indicator, the trade positions should be opened only when a cross happens. Either in this case, analyse the chart in order to see if the signals are a "weak" ones, due to "waves" around the . In these cases, you might wait for the next confirmation signals after the waves, when the trend will be better defined
- The close trade signals are provided in order to help to understand when you should close the buy or sell trades. Even in this case, always add a visual analysis to the signals, and pay attention to the areas. Sometimes, you can have the close signals in correspondence to areas: in these cases wait for the definition of the trend and eventually for the next close trade signals if they will be better defined
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.