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Candlestick analysis

Volume Imbalance# Volume Imbalance Indicator ## Description The Volume Imbalance Indicator is a technical analysis tool that measures the imbalance between bullish and bearish volume over a specified period. This indicator helps traders identify the prevailing market sentiment and potential reversal points. ## How It Works The indicator analyzes trading volume for each candle: - **Bull Volume** - volume of candles where the closing price is higher than the opening price (green candles) - **Bear Volume** - volume of candles where the closing price is lower than the opening price (red candles) - **Imbalance** is calculated as the difference between the sum of bull volume and bear volume over the set period ## Signal Interpretation - **Positive values (green histogram)** - bullish volume dominates, indicating buyer strength - **Negative values (red histogram)** - bearish volume dominates, indicating seller strength - **Zero line** - equilibrium between buyers and sellers ## Trading Applications 1. **Trend Confirmation** - imbalance in the direction of the trend confirms its strength 2. **Divergence Analysis** - divergence between price and indicator may signal potential reversals 3. **Accumulation/Distribution Zones** - prolonged periods of imbalance indicate large player activity ## Settings - **Period** - number of candles for calculating the imbalance (default: 20) ## Features - Displays in a separate panel below the main chart - Histogram format for better visualization - Color coding: green for bullish imbalance, red for bearish imbalance - Suitable for all timeframes and trading instruments This indicator is particularly effective when combined with other technical analysis tools for comprehensive market assessment.
Pine Script® indicator
by ValeriiHes
Volume Pressure Analysis - Live DataVolume Pressure Gauge and Volume Percentage Indicator – Pine Script Guide This indicator provides a simplified, real-time visualization of both volume pressure (buy vs. sell activity) and today’s trading volume in comparison to historical averages. It is designed to help traders assess whether buyers or sellers dominate the current session and whether today’s volume is significant relative to recent behaviour. ________________________________________ Key Functional Segments 1. Inputs and Configuration Users can configure the length of the Simple Moving Average (SMA) used to calculate average volume, set the position of the gauge table on the chart, and toggle the visibility of the volume pressure display. This allows flexibility in integrating the tool with various trading styles and chart layouts. 2. Volume Data Calculations The indicator calculates three key volume metrics: • volToday: The current day’s volume. • volAvg: The average volume over the user-defined SMA period (default is 20 bars). • volPct: The current volume as a percentage of the average. This enables traders to quickly recognize whether current trading activity is above or below normal, which can be a precursor to potential trend strength or weakness. 3. Volume Pressure Calculation The script estimates buying and selling pressure based on price movement and volume. It distributes volume into upward (buy) and downward (sell) segments and expresses them as percentages of the total volume. This gives an immediate sense of whether bulls or bears are more active in the current session. 4. Visual Representation (Progress Bars) The indicator renders a simplified visual gauge using horizontal bar segments (pseudo-bars) to reflect the proportion of buy and sell pressure. The length of each bar correlates with the strength of pressure from buyers or sellers, helping users assess dominance without analyzing candlestick behavior in depth. 5. Table Display A compact table is drawn on the chart showing: • Buy pressure percentage and corresponding bar. • Sell pressure percentage and corresponding bar. • Volume percentage compared to the recent average. This format makes it easy to evaluate volume dynamics at a glance, without cluttering the price chart or relying on separate overlays. ________________________________________ How Traders Benefit from This Indicator • Momentum Shift Detection: Early signs of trend reversal can be observed when volume pressure flips direction. • Breakout Validation: High volume combined with dominant pressure supports the credibility of breakout moves. • False Move Avoidance: If price moves on low volume or mixed pressure, traders can avoid low-probability entries. • Market Context Awareness: Users can assess whether a day is behaving normally in terms of participation or is unusually quiet or aggressive. ________________________________________ Basic Usage Guide 1. Add the script to your TradingView chart and set your preferred SMA length for volume comparison. 2. Customize the table’s position using the X and Y settings for clarity and alignment. 3. Interpret the outputs: o A higher red bar indicates dominant sell pressure. o A higher green bar indicates dominant buy pressure. o Volume % above 100% suggests above-average activity, while values below 100% may imply low conviction. 4. Apply to trading decisions: o High buy pressure and high volume may indicate a strong long opportunity. o High sell pressure and high volume may support short setups. o Low volume or conflicting signals may call for caution. 5. Combine with other tools such as trend indicators, support/resistance zones, or price action patterns for more reliable trade setups. ________________________________________ Practical Example • Sell Pressure: 70% → Suggests strong seller control; potential for short setups. • Buy Pressure: 30% → Weak buying interest; long trades may carry risk. • Volume Percentage: 120% → Indicates a surge in participation; movement may have greater validity. ________________________________________ Tips for New Traders • Use this indicator as a confirmation tool rather than a standalone strategy. • Begin on higher timeframes (4-hour or daily) to develop familiarity. • Compare multiple examples to identify reliable patterns over time. • Always incorporate proper risk management, including stop losses. ________________________________________ Disclaimer from aiTrendview This indicator is intended solely for educational and informational use. It does not constitute investment advice, trade signals, or financial recommendations. aiTrendview and its affiliates are not liable for any trading losses incurred through use of this tool. All trading involves risk. Past performance of any indicator does not guarantee future results. Users should conduct independent research and consult with a certified financial advisor before making any trading decisions.
Pine Script® indicator
by aiTrendview-Charting-System
Game Theory Trading StrategyGame Theory Trading Strategy: Explanation and Working Logic This Pine Script (version 5) code implements a trading strategy named "Game Theory Trading Strategy" in TradingView. Unlike the previous indicator, this is a full-fledged strategy with automated entry/exit rules, risk management, and backtesting capabilities. It uses Game Theory principles to analyze market behavior, focusing on herd behavior, institutional flows, liquidity traps, and Nash equilibrium to generate buy (long) and sell (short) signals. Below, I'll explain the strategy's purpose, working logic, key components, and usage tips in detail. 1. General Description Purpose: The strategy identifies high-probability trading opportunities by combining Game Theory concepts (herd behavior, contrarian signals, Nash equilibrium) with technical analysis (RSI, volume, momentum). It aims to exploit market inefficiencies caused by retail herd behavior, institutional flows, and liquidity traps. The strategy is designed for automated trading with defined risk management (stop-loss/take-profit) and position sizing based on market conditions. Key Features: Herd Behavior Detection: Identifies retail panic buying/selling using RSI and volume spikes. Liquidity Traps: Detects stop-loss hunting zones where price breaks recent highs/lows but reverses. Institutional Flow Analysis: Tracks high-volume institutional activity via Accumulation/Distribution and volume spikes. Nash Equilibrium: Uses statistical price bands to assess whether the market is in equilibrium or deviated (overbought/oversold). Risk Management: Configurable stop-loss (SL) and take-profit (TP) percentages, dynamic position sizing based on Game Theory (minimax principle). Visualization: Displays Nash bands, signals, background colors, and two tables (Game Theory status and backtest results). Backtesting: Tracks performance metrics like win rate, profit factor, max drawdown, and Sharpe ratio. Strategy Settings: Initial capital: $10,000. Pyramiding: Up to 3 positions. Position size: 10% of equity (default_qty_value=10). Configurable inputs for RSI, volume, liquidity, institutional flow, Nash equilibrium, and risk management. Warning: This is a strategy, not just an indicator. It executes trades automatically in TradingView's Strategy Tester. Always backtest thoroughly and use proper risk management before live trading. 2. Working Logic (Step by Step) The strategy processes each bar (candle) to generate signals, manage positions, and update performance metrics. Here's how it works: a. Input Parameters The inputs are grouped for clarity: Herd Behavior (🐑): RSI Period (14): For overbought/oversold detection. Volume MA Period (20): To calculate average volume for spike detection. Herd Threshold (2.0): Volume multiplier for detecting herd activity. Liquidity Analysis (💧): Liquidity Lookback (50): Bars to check for recent highs/lows. Liquidity Sensitivity (1.5): Volume multiplier for trap detection. Institutional Flow (🏦): Institutional Volume Multiplier (2.5): For detecting large volume spikes. Institutional MA Period (21): For Accumulation/Distribution smoothing. Nash Equilibrium (⚖️): Nash Period (100): For calculating price mean and standard deviation. Nash Deviation (0.02): Multiplier for equilibrium bands. Risk Management (🛡️): Use Stop-Loss (true): Enables SL at 2% below/above entry price. Use Take-Profit (true): Enables TP at 5% above/below entry price. b. Herd Behavior Detection RSI (14): Checks for extreme conditions: Overbought: RSI > 70 (potential herd buying). Oversold: RSI < 30 (potential herd selling). Volume Spike: Volume > SMA(20) x 2.0 (herd_threshold). Momentum: Price change over 10 bars (close - close ) compared to its SMA(20). Herd Signals: Herd Buying: RSI > 70 + volume spike + positive momentum = Retail buying frenzy (red background). Herd Selling: RSI < 30 + volume spike + negative momentum = Retail selling panic (green background). c. Liquidity Trap Detection Recent Highs/Lows: Calculated over 50 bars (liquidity_lookback). Psychological Levels: Nearest round numbers (e.g., $100, $110) as potential stop-loss zones. Trap Conditions: Up Trap: Price breaks recent high, closes below it, with a volume spike (volume > SMA x 1.5). Down Trap: Price breaks recent low, closes above it, with a volume spike. Visualization: Traps are marked with small red/green crosses above/below bars. d. Institutional Flow Analysis Volume Check: Volume > SMA(20) x 2.5 (inst_volume_mult) = Institutional activity. Accumulation/Distribution (AD): Formula: ((close - low) - (high - close)) / (high - low) * volume, cumulated over time. Smoothed with SMA(21) (inst_ma_length). Accumulation: AD > MA + high volume = Institutions buying. Distribution: AD < MA + high volume = Institutions selling. Smart Money Index: (close - open) / (high - low) * volume, smoothed with SMA(20). Positive = Smart money buying. e. Nash Equilibrium Calculation: Price mean: SMA(100) (nash_period). Standard deviation: stdev(100). Upper Nash: Mean + StdDev x 0.02 (nash_deviation). Lower Nash: Mean - StdDev x 0.02. Conditions: Near Equilibrium: Price between upper and lower Nash bands (stable market). Above Nash: Price > upper band (overbought, sell potential). Below Nash: Price < lower band (oversold, buy potential). Visualization: Orange line (mean), red/green lines (upper/lower bands). f. Game Theory Signals The strategy generates three types of signals, combined into long/short triggers: Contrarian Signals: Buy: Herd selling + (accumulation or down trap) = Go against retail panic. Sell: Herd buying + (distribution or up trap). Momentum Signals: Buy: Below Nash + positive smart money + no herd buying. Sell: Above Nash + negative smart money + no herd selling. Nash Reversion Signals: Buy: Below Nash + rising close (close > close ) + volume > MA. Sell: Above Nash + falling close + volume > MA. Final Signals: Long Signal: Contrarian buy OR momentum buy OR Nash reversion buy. Short Signal: Contrarian sell OR momentum sell OR Nash reversion sell. g. Position Management Position Sizing (Minimax Principle): Default: 1.0 (10% of equity). In Nash equilibrium: Reduced to 0.5 (conservative). During institutional volume: Increased to 1.5 (aggressive). Entries: Long: If long_signal is true and no existing long position (strategy.position_size <= 0). Short: If short_signal is true and no existing short position (strategy.position_size >= 0). Exits: Stop-Loss: If use_sl=true, set at 2% below/above entry price. Take-Profit: If use_tp=true, set at 5% above/below entry price. Pyramiding: Up to 3 concurrent positions allowed. h. Visualization Nash Bands: Orange (mean), red (upper), green (lower). Background Colors: Herd buying: Red (90% transparency). Herd selling: Green. Institutional volume: Blue. Signals: Contrarian buy/sell: Green/red triangles below/above bars. Liquidity traps: Red/green crosses above/below bars. Tables: Game Theory Table (Top-Right): Herd Behavior: Buying frenzy, selling panic, or normal. Institutional Flow: Accumulation, distribution, or neutral. Nash Equilibrium: In equilibrium, above, or below. Liquidity Status: Trap detected or safe. Position Suggestion: Long (green), Short (red), or Wait (gray). Backtest Table (Bottom-Right): Total Trades: Number of closed trades. Win Rate: Percentage of winning trades. Net Profit/Loss: In USD, colored green/red. Profit Factor: Gross profit / gross loss. Max Drawdown: Peak-to-trough equity drop (%). Win/Loss Trades: Number of winning/losing trades. Risk/Reward Ratio: Simplified Sharpe ratio (returns / drawdown). Avg Win/Loss Ratio: Average win per trade / average loss per trade. Last Update: Current time. i. Backtesting Metrics Tracks: Total trades, winning/losing trades. Win rate (%). Net profit ($). Profit factor (gross profit / gross loss). Max drawdown (%). Simplified Sharpe ratio (returns / drawdown). Average win/loss ratio. Updates metrics on each closed trade. Displays a label on the last bar with backtest period, total trades, win rate, and net profit. j. Alerts No explicit alertconditions defined, but you can add them for long_signal and short_signal (e.g., alertcondition(long_signal, "GT Long Entry", "Long Signal Detected!")). Use TradingView's alert system with Strategy Tester outputs. 3. Usage Tips Timeframe: Best for H1-D1 timeframes. Shorter frames (M1-M15) may produce noisy signals. Settings: Risk Management: Adjust sl_percent (e.g., 1% for volatile markets) and tp_percent (e.g., 3% for scalping). Herd Threshold: Increase to 2.5 for stricter herd detection in choppy markets. Liquidity Lookback: Reduce to 20 for faster markets (e.g., crypto). Nash Period: Increase to 200 for longer-term analysis. Backtesting: Use TradingView's Strategy Tester to evaluate performance. Check win rate (>50%), profit factor (>1.5), and max drawdown (<20%) for viability. Test on different assets/timeframes to ensure robustness. Live Trading: Start with a demo account. Combine with other indicators (e.g., EMAs, support/resistance) for confirmation. Monitor liquidity traps and institutional flow for context. Risk Management: Always use SL/TP to limit losses. Adjust position_size for risk tolerance (e.g., 5% of equity for conservative trading). Avoid over-leveraging (pyramiding=3 can amplify risk). Troubleshooting: If no trades are executed, check signal conditions (e.g., lower herd_threshold or liquidity_sensitivity). Ensure sufficient historical data for Nash and liquidity calculations. If tables overlap, adjust position.top_right/bottom_right coordinates. 4. Key Differences from the Previous Indicator Indicator vs. Strategy: The previous code was an indicator (VP + Game Theory Integrated Strategy) focused on visualization and alerts. This is a strategy with automated entries/exits and backtesting. Volume Profile: Absent in this strategy, making it lighter but less focused on high-volume zones. Wick Analysis: Not included here, unlike the previous indicator's heavy reliance on wick patterns. Backtesting: This strategy includes detailed performance metrics and a backtest table, absent in the indicator. Simpler Signals: Focuses on Game Theory signals (contrarian, momentum, Nash reversion) without the "Power/Ultra Power" hierarchy. Risk Management: Explicit SL/TP and dynamic position sizing, not present in the indicator. 5. Conclusion The "Game Theory Trading Strategy" is a sophisticated system leveraging herd behavior, institutional flows, liquidity traps, and Nash equilibrium to trade market inefficiencies. It’s designed for traders who understand Game Theory principles and want automated execution with robust risk management. However, it requires thorough backtesting and parameter optimization for specific markets (e.g., forex, crypto, stocks). The backtest table and visual aids make it easy to monitor performance, but always combine with other analysis tools and proper capital management. If you need help with backtesting, adding alerts, or optimizing parameters, let me know!
Pine Script® strategy
by EfeErdost
Mig Trade Model - Kill Zones Key features: Liquidity Hunt Detection: Spots aggressive moves that "hunt" stops beyond recent swing highs/lows. Consolidation Filter: Requires 1-3 small-range candles after a hunt before confirming with a strong candle. Bias Application: Uses daily open/close to auto-detect bias or allows manual override. Kill Zone Restriction: Limits signals to London (default: 7-10 AM UTC) and NY (default: 12-3 PM UTC) sessions for better relevance in active markets. This strategy is inspired by smart money concepts (SMC) and ICT (Inner Circle Trader) methodologies, aiming to capture venom-like "stings" in price action where liquidity is grabbed before reversals. How It Works ATR Calculation: Uses a user-defined ATR length (default: 14) to measure volatility, which scales candle body and range thresholds. Bias Determination: Auto: Compares daily close to open (bullish if close > open). Manual: User selects "Bullish" or "Bearish." Strong Candles: Bullish: Green candle with body > 2x ATR (configurable). Bearish: Red candle with body > 2x ATR. Small Range Candles: Candles where high-low < 0.5x ATR (configurable). Liquidity Hunt: Bullish Hunt: Strong bearish candle making a new low below the past swing low (default: 10 bars). Bearish Hunt: Strong bullish candle making a new high above the past swing high. Signal Generation: After a hunt, counts 1-3 small-range candles. Confirms with a strong candle in the opposite direction (e.g., strong bullish after bearish hunt). Resets if >3 small candles or an opposing strong candle appears. Kill Zone Filter: Checks if the current bar's time (in UTC) falls within London or NY Kill Zones. Only allows final "Buy" (bullish entry) or "Sell" (bearish entry) if bias matches and in Kill Zone. Plots: Yellow circle (below): Bullish liquidity hunt. Orange circle (above): Bearish liquidity hunt. Blue diamond (below): Raw bullish signal. Purple diamond (above): Raw bearish signal. Green triangle up ("Buy"): Filtered bullish entry. Red triangle down ("Sell"): Filtered bearish entry. Inputs Bias: "Auto" (default), "Bullish", or "Bearish" – Controls signal direction based on daily trend. ATR Length: 14 (default) – Period for ATR calculation. Swing Length for Liquidity Hunt: 10 (default) – Bars to look back for swing highs/lows. Strong Candle Body Multiplier (x ATR): 2.0 (default) – Threshold for strong candle bodies. Small Range Multiplier (x ATR): 0.5 (default) – Threshold for small-range candles. London Kill Zone Start/End Hour (UTC): 7/10 (default) – Customize London session hours. NY Kill Zone Start/End Hour (UTC): 12/15 (default) – Customize New York session hours. Usage Tips Timeframe: Best on lower timeframes (e.g., 5-15 min) for intraday trading, especially forex pairs like EURUSD or GBPUSD. Timezone Adjustment: Inputs are in UTC. If your chart is in a different timezone (e.g., EST = UTC-5), adjust hours accordingly (e.g., London: 2-5 AM EST → 7-10 UTC). Risk Management: Use with stop-loss (e.g., beyond the hunt low/high) and take-profit based on ATR multiples. Not financial advice—backtest thoroughly. Customization: Tweak multipliers for different assets; higher for volatile cryptos, lower for stocks. Limitations: Relies on historical data; may generate false signals in ranging markets. Combine with other indicators like volume or support/resistance. This indicator is for educational purposes. Always use discretion and proper risk management in live trading. If you find it useful, feel free to share feedback or suggestions!
Pine Script® indicator
by EfeErdost
Accumulation Phase DetectorClean Accumulation Phase Indicator — Description This TradingView indicator visually identifies the Accumulation Phase in price action, based on the Wyckoff methodology and volume-price analysis. The Accumulation Phase is where insiders or "smart money" gradually build positions before a significant price breakout. Key Features: Range Detection: The indicator calculates a price range over a configurable period (Range Length). It marks this range on the chart with red horizontal lines representing support and resistance. Volume Spike Identification: It detects unusually high volume relative to the average volume over the same period (Volume Spike Multiplier). These spikes highlight potential insider buying activity. Accumulation Phase Highlighting: When price action remains within the detected range and volume spikes occur, the indicator considers the market to be in an accumulation phase. Volume bars during this phase are colored blue for easy visualization. Campaign Start & End Labels: The indicator places a "Campaign starts" label at the beginning of the accumulation phase and a "Campaign ends - warehouse full" label when the accumulation ends. This mimics the idea that insiders fill their “warehouses” before a breakout. Breakout Detection: Once accumulation ends, the indicator monitors for a price breakout above the resistance level and places a "Breakout" label at the breakout bar. How to Use: Adjust the Range Length and Volume Spike Multiplier inputs to suit the timeframe and instrument you’re analyzing. Watch for the blue volume bars within the red range lines to identify the accumulation phase. Use the campaign labels to identify when the phase starts and ends. Watch for the breakout label as a potential entry signal.
Pine Script® indicator
by Mikeramzee
Volatility Wick Trap — Smart Reversal EngineThe Volatility Wick Trap — Smart Reversal Engine is a precision reversal detection tool designed for traders who rely on smart money footprints, volatility compression, and liquidity wick exhaustion to time entries near market turns. 💡 Core Components: Volatility Squeeze Detection: Identifies candles where range compresses significantly compared to the 14-period average true range, highlighting potential breakout zones. Liquidity Wick Exhaustion: Detects candles with dominant upper or lower wicks, signaling failed liquidity grabs or stop hunts. Contextual EMA Filter: Uses a 21-period EMA to filter signals, improving accuracy by aligning with market structure bias. 🔍 How It Works: Green diamond lines mark bullish hidden reversal zones. Red diamond lines mark bearish hidden reversal traps. These lines only appear when volatility compresses and wick traps are confirmed within the trend context. ✅ Clean. Minimal. Tactical. Ideal for scalpers, swing traders, and smart money enthusiasts looking to fade emotional price spikes.
Pine Script® indicator
by adonisprime
1
Daily High/Low Close Breakout - GOLD### **Daily High/Low Close Breakout Indicator** This indicator is a powerful tool for identifying potential breakout opportunities based on the previous day's price action. It's built on a unique time-based logic that defines key support and resistance levels for the trading day. --- ### **How the Indicator Works** The indicator operates in two main phases: 1. **Calculation Period (00:00 to 16:30 Tehran Time):** The indicator first observes the price action from the start of the day until 16:30. During this time, it records the highest and lowest **closing prices** of all candles. The chart background is shaded gray to visually mark this period. 2. **Trading Period (16:30 to 16:30 the next day):** At 16:30, the highest and lowest close levels are finalized and drawn as horizontal lines. These levels then become the primary breakout zones for the next 24 hours. The indicator will generate signals whenever the price crosses these lines. --- ### **Trading Signals** The indicator uses a simple and effective crossover logic for its signals: * **BUY Signal:** A signal is generated when a candle's closing price **crosses above** the high close line. * **SELL Signal:** A signal is generated when a candle's closing price **crosses below** the low close line. --- ### **Important Usage Guidelines** For optimal performance, please follow these specific recommendations: * **Timeframe:** This indicator is designed and optimized to be used exclusively on the **15-minute timeframe**. Using it on other timeframes may produce inconsistent or unreliable results. * **Primary Asset:** The logic for this indicator was developed and backtested primarily for **Gold (XAUUSD)**. Its performance and win rate have been observed to be the most consistent on this asset. * **Asset Restriction:** It is strongly recommended to **avoid using this indicator on other currency pairs or assets**, as it has not been optimized for their specific market behavior. --- ### **Disclaimer** *This indicator is provided for informational and educational purposes only. It is not financial advice. Past performance is not a guarantee of future results. All trading decisions should be based on your own research and risk analysis. Always use proper risk management.*
Pine Script® indicator
by hassansadeghirashed
Day Trading Strategy (With Risk Management)This is a day trading strategy based on fast and slow EMA crossovers combined with RSI filtering to enhance trade accuracy. Designed for intraday use, it generates buy signals when the fast EMA crosses above the slow EMA and sell signals when it crosses below, but only if the RSI confirms momentum is favorable to avoid false entries in choppy markets. The strategy includes built-in risk management with configurable stop-loss and take-profit levels set at 1% by default, helping to limit losses and secure profits quickly within the trading day. Clear buy and sell signals are plotted on the chart, and alerts notify traders in real time when trading opportunities arise. Ideal for short-term traders, this system provides a disciplined, mechanical approach to capturing intraday trends with momentum confirmation and essential risk controls. It is fully customizable to fit different day trading instruments, timeframes, and risk appetites.
Pine Script® strategy
by mnwrahmad
Benford's Law Actual [Tagstrading]Benford’s Law Chart — First Digit Analysis of Percentage Price Drops This script visualizes the distribution of the leading digit in the percentage change of price drops, and compares it to the theoretical distribution expected by Benford’s Law. It helps traders, analysts, and quants to detect anomalies, unnatural behavior, or price manipulation in any asset or timeframe. How to Use Add to any chart or symbol (stocks, crypto, FX, etc.) and select the timeframe you wish to analyze. Set the “Number of Bars to Analyze” input (default: 500) to control the length of the historical window. The chart will display, for the latest window: A blue line: the actual leading-digit distribution for percentage price changes between bars. A red line: the expected distribution per Benford’s Law. Labels below and above: digit markers and the expected (theoretical) percentages. Summary panel on the right: frequency counts and actual vs. theoretical % for each digit. Interpretation: If your actual (blue) curve or digit counts are significantly different from the red Benford’s Law curve, it could indicate unnatural price action, fraud, bot activity, or structural anomalies. Why is this useful for TradingView? Financial forensics: Benford’s Law is a classic tool for detecting data manipulation and fraud in accounting. On charts, it can reveal if price movements are statistically “natural.” Transparency and confidence: Helps communities audit markets, brokers, or exchanges for irregularities. Adaptable: Works on any market, any timeframe. What makes this script unique? Focuses on % price changes, not raw prices. This provides a fair comparison across assets, symbols, and timeframes. Measures only the direction and magnitude of drops/rises — more suitable for detecting manipulation in active markets. Clear and customizable visualization: The Benford line, actual data, and summary are all visible and readable in one glance. Optimized for speed and clarity (runs efficiently on all major charts). How is it different from stg44’s Benford’s Law script? This script analyzes the leading digit of percentage price changes (i.e., how much the price drops or rises in %), while the original by stg44 analyzes the leading digit of price itself. Results are less sensitive to price scale and more comparable across volatile and non-volatile assets. The summary panel clearly shows ( ) for actual and for Benford theoretical values. Full code is commented and open for the community. Credits and Inspiration This script was inspired by “Benford’s Law” by stg44: Thanks to the TradingView community for sharing powerful visual ideas. — By tags trading
Pine Script® indicator
by TagsTrading