LOWESS (Locally Weighted Scatterplot Smoothing) [ChartPrime]

Aug 5

LOWESS (Locally Weighted Scatterplot Smoothing) [ChartPrime]

⯁ OVERVIEW
The LOWESS (Locally Weighted Scatterplot Smoothing) [ChartPrime] indicator is an advanced technical analysis tool that combines LOWESS smoothing with a Modified Adaptive Gaussian Moving Average. This indicator provides traders with a sophisticated method for trend analysis, pivot point identification, and breakout detection.

◆ KEY FEATURES

• LOWESS Smoothing: Implements Locally Weighted Scatterplot Smoothing for trend analysis.
  
• Modified Adaptive Gaussian Moving Average: Incorporates a volatility-adapted Gaussian MA for enhanced trend detection.
  
• Pivot Point Identification: Detects and visualizes significant pivot highs and lows.
  
• Breakout Detection: Tracks and optionally displays the count of consecutive breakouts.
  
• Gaussian Scatterplot: Offers a unique visualization of price movements using randomly colored points.
  
• Customizable Parameters: Allows users to adjust calculation length, pivot detection, and visualization options.
  

◆ FUNCTIONALITY DETAILS

⬥ LOWESS Calculation:

• Utilizes a weighted local regression to smooth price data.
  
• Adapts to local trends, reducing noise while preserving important price movements.
  

⬥ Modified Adaptive Gaussian Moving Average:

• Combines Gaussian weighting with volatility adaptation using ATR and standard deviation.
  
• Smooths the Gaussian MA using LOWESS for enhanced trend visualization.
  

⬥ Pivot Point Detection and Visualization:

• Identifies pivot highs and lows using customizable left and right bar counts.
  
• Draws lines and labels to mark broke pivot points on the chart.
  

⬥ Breakout Tracking:

• Monitors price crossovers of pivot lines to detect breakouts.
  
• Optionally displays and updates the count of consecutive breakouts.
  

◆ USAGE

• Trend Analysis: Use the color and direction of the smoothed Gaussian MA line to identify overall trend direction.
  
• Breakout Trading: Monitor breakouts from pivot levels and their persistence using the breakout count feature.
  
• Volatility Assessment: The spread of the Gaussian scatterplot can provide insights into market volatility.
  

⯁ USER INPUTS

• Length: Sets the lookback period for LOWESS and Gaussian MA calculations (default: 30).
  
• Pivot Length: Determines the number of bars to the left for pivot calculation (default: 5).
  
• Count Breaks: Toggle to show the count of consecutive breakouts (default: false).
  
• Gaussian Scatterplot: Toggle to display the Gaussian MA as a scatterplot (default: true).
  

⯁ TECHNICAL NOTES

• Implements a custom LOWESS function for efficient local regression smoothing.
  
• Uses a modified Gaussian MA calculation that adapts to market volatility.
  
• Employs Pine Script's line and label drawing capabilities for clear pivot point visualization.
  
• Utilizes random color generation for the Gaussian scatterplot to enhance visual distinction between different time periods.
  

The LOWESS (Locally Weighted Scatterplot Smoothing) [ChartPrime] indicator offers traders a sophisticated tool for trend analysis and breakout detection. By combining advanced smoothing techniques with pivot point analysis, it provides a comprehensive view of market dynamics. The indicator's adaptability to different market conditions and its customizable nature make it suitable for various trading styles and timeframes.

Aug 5

Release Notes

Patched functionality on stocks