OPEN-SOURCE SCRIPT

[R&D] Moving Centroid

This script utilizes this concept. Instead of weighting by volume, it weights by amount of price action on every close price of the rolling window. I assume it can be used as an additional reference point for price mode and price antimode.

it is directly connected with Market (not volume) profile, or TPO charts.

The algorithm:
1) takes a rolling window of, for example, 50 data points of close prices:
2) for each of this closing prices, the algorithm will check how many bars touched this close price.
3) then: sum of datapoints * weights/sum of weights

Since the logic is implemented in pretty non-efficient way, the script sometimes can take time to make calculations. Moreover, it calculates the centroid taking into account only close prices, not every tick. of a given rolling window That's why it's still experimental.
centercenterofgravitycentroidgravitymarketmarketprofilemovingMoving AveragesprofileTPOVolatility

Open-source script

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 publication is governed by House rules. You can favorite it to use it on a chart.

Want to use this script on a chart?


Also on:

Disclaimer