Bar Delta Sentiment
Script that accumulates the magnitude of positive and negative bar change deltas. These differences are used to estimate market sentiment. When the sentiment line crosses the zero line downwards the sentiment is bearish and when it crosses it upwards it is bullish.
To enable the indicator to add value as a leading indicator, the ema of the sentiment line is plotted. When the sentiment line crosses below the ema it indicates a possible shift to a bearish market, and when it crosses above the ema it indicates the possibility of the market turning bullish.
The indicator can be used on all time-frames and all symbols. In general it works best when the length is quite short, like a 13, 21, but the user can play around with the settings a bit depending on the symbol and time frame in use.
To enable the indicator to add value as a leading indicator, the ema of the sentiment line is plotted. When the sentiment line crosses below the ema it indicates a possible shift to a bearish market, and when it crosses above the ema it indicates the possibility of the market turning bullish.
The indicator can be used on all time-frames and all symbols. In general it works best when the length is quite short, like a 13, 21, but the user can play around with the settings a bit depending on the symbol and time frame in use.
Release Notes:
Removed the directional filtering to allow for continuous adjustment of deltas.
Added smoothing of sentiment line, adjustable with input "Smoothing MA Length"
Parameterized signal line smoothing with param "Signal MA Length"
Now works well on longer sequences, in general I like to use every 4th element in the Fib sequence values for parameters. Defaults for current script 3, 13 and 89 respectively for a short time-frame chart like the 5min
Added smoothing of sentiment line, adjustable with input "Smoothing MA Length"
Parameterized signal line smoothing with param "Signal MA Length"
Now works well on longer sequences, in general I like to use every 4th element in the Fib sequence values for parameters. Defaults for current script 3, 13 and 89 respectively for a short time-frame chart like the 5min