Created By Request from @elpuerto936c
Description of Indicator:
***This measures the day's open / close vs then high lows of the day (range)
***When the open /close is less than 20% of the range, then it's likely that the following day will have a big jump.
***The Thought Process is Simply When (Open - Close) is Less Than 20% Of The Range…Shows Indecision and Breakout is Probable.
***Which way? Use whatever indicator you want to figure out if the market is oversold or overbought.
***NOTE: If Indicator Triggers After Extended Up or Down Move…This = High Probability Reversal.
In Inputs Tab:
-Ability to Change The Trigger Value…(This is Percent The (Open-Close) is to the Total RANGE of The Bar).
-Ability to Turn On/Off Highlight Bars via Check Box.
To Set Alert:
-In First Drop Down Box Select Name of Indicator
-In Drop Down to Right Select “Alert Blast Off If Below Trigger”.
-Then Select “Greater Than”.
-Then Select “Value”
-To the Right of Value type in .99
-Select On Bar Close, If not you will get FALSE Alerts.
//Created By ChrisMoody on 12-26-2014 By Request from elpuerto936c //This measures the day's open / close vs then high lows of the day (range) //When the open /close is less than 20% of the range, then it's likely that the following day will have a big jump. //Which way? use whatever indicator you want to figure out if the market is oversold or overbought //***NOTE: If Indicator Triggers After Extended Up or Down Move…This = High Probability Reversal. study(title="CM_Blast_Off_V1_AlertReady",shorttitle="CM_BlastOff_V1", overlay=false, precision=0) trig = input(20, title="Trigger Value = % of Range") hb = input(true, title="Show Highlight Bars When Condition = True") cc = input(true, title="Show Color Change When Value is < Trigger Value") val = abs(close - open) range = high - low blastOffVal = (val/range) * 100 trigger = trig alert1 = blastOffVal < trig ? 1 : na col = cc and blastOffVal < trig ? red : aqua barcolor(hb and blastOffVal < trig ? fuchsia : na) plot(blastOffVal, title="Blast Off Value", style=columns, linewidth=3, color=col) plot(trigger, title="Trigger Value Plot 1", style=circles, linewidth=3, color=fuchsia) plot(trigger, title="Trigger Value Plot 2", style=line, linewidth=2, color=fuchsia) plot(alert1, title="Alert Blast Off if Below Trigger", style=circles, linewidth=1, color=yellow)
2. The thought process is listed in the description. The histogram measures on a percentage basis the Range of the Open - Close...Vs...the Range of the High To Low. So if the Open and Close equaled the High and Low...the Range would be 100% of the total candle body. The thought process is if the Open-Close Range is less than 20% (Of the Total Candle Body)...that means buyers and sellers were Battling and NO ONE Won..So the next bar you would expect the Open-Close Range to be much higher when one of the sides took control. In general you don't know which way this will go. However...
There are two main finds:
1. If you look at the Yellow Callout at the bottom middle of the chart...you'll find when there has been an extended up or down move and this indicator "Triggers" there is a High Probability of a reversal.
2. THEN...when price reversed and started moving UP...Notice each "Trigger" (Fuchsia Highlight Bars) the move the next day tended to be to the upside which makes sense b/c Buyers were in control. THEN...at the top of that move you saw 2 Fuchsia bars (also close to Dojis) and the Trend reversed to the downside...THEN...when you got a Fuchsia Bar the next day Tended to Be a Downside Move...
Therefore the Indicator simply shows Either the probability of a reversal...OR...the probability that there will be a large move on the next bar...and most likely in the direction of the General Trend at that time.
I simply view it as a Indicator that whatever Indicators you typically use...whether it's MACD...or RSI...Or whatever...IF your indicator gives you a potential entry...AND you have a Trigger on this indicator...that Equals a higher probability Set Up...
Nothing more...Nothing less......To Trade this as a Stand Alone System several other filters would need to me added.
It's not looking back and getting an average or Percent Rank based on X Days...JUST looks at current bar comparing the Range of the Open-Close to the Range of the High-Low.
Think of it in these terms. Imagine the Indicator asking if each bar was a Doji Star. It would return a value of Yes Or No for each bar. This indicator is not giving us a Yes Or No (except the colors change if the Range is < 20%)...It's giving us the Value...Which is the Percentage of the Range of the Open-Close to the Range of the High-Low.