Developed and used to win trading competitions around the world, the Hoffman Inventory Retracement Trade is quickly becoming one of the most popular ways to identify where short-term counter trend institutional inventory has subsided and when it’s time to re-enter into a trade’s original trend direction.
I have not included the TREND condition.
Rob Hoffman Inventory Retracement Bar - http://tradersonline-mag.com/01_ezine/01_traders/en/2014/09/files/assets/basic-html/page54.html
study(title="UCS_Rob Hoffman_Inventory Retracement Bar", shorttitle="UCS_RH_IRB", precision=2, overlay=true) z = input(45, title="Inventory Retracement Percentage %", maxval=100) // Candle Range a = abs(high - low) // Candle Body b = abs(close - open) // Percent to Decimal c = z/100 // Range Verification rv = b < c*a // Price Level for Retracement x = low + (c * a) y = high - (c * a) sl = rv == 1 and high > y and close < y and open < y ss = rv == 1 and low < x and close > x and open > x // Line Definition li = sl ? y : ss ? x : (x+y)/2 // Plot Statement plotshape(sl, style=shape.triangledown, location=location.abovebar, color=red, title = "Long Bar", transp = 0) plotshape(ss, style=shape.triangleup, location=location.belowbar, color=green, title = "Short Bar", transp = 0) plot(li, style = line, color = blue, title = "Inventory Bar Retracement Price Line")