Opening Range, Initial Balance, Opening Price, Pre-market Levels### Description of the Indicator: **Opening Range, Initial Balance, Opening Price, Pre-market Levels**
This custom TradingView indicator provides a comprehensive view of key price levels for intraday trading, specifically designed to track important levels from the Opening Range (OR), Initial Balance (IB), Opening Price (OP), and Pre-market session (PM). These levels are essential for traders to gauge potential market movements and identify critical areas of support and resistance.
#### **Features:**
1. **Opening Range (OR):**
- This is the high and low of the first 30 minutes of the regular market session (09:30 - 10:00 EST).
- The OR high and low act as significant levels that may influence price movement for the rest of the day.
- The mid-level of the Opening Range (OR Mid) is also plotted to give a more detailed view of potential price action.
2. **Initial Balance (IB):**
- The Initial Balance is the range created during the first hour of market activity (09:30 - 10:30 EST).
- This range often sets the tone for the market's direction. The IB high and low, along with the IB midline, are plotted for quick reference.
3. **Opening Price (OP):**
- The opening price of the market is marked as a circle and labeled "OP."
- This level provides context for market sentiment when compared to the high and low levels.
4. **Pre-market Levels (PM):**
- The pre-market session (04:00 - 09:30 EST) has its own important levels that are calculated for the high, low, and mid range (PM High, PM Low, and PM Mid).
- These levels are plotted and are useful for traders to understand where the market stood before the regular session opened.
#### **Customization Options:**
- **Exchange Timezone:** You can choose whether to display the times in the exchange's local timezone or in your own preferred timezone.
- **Mid Levels Display:** You can toggle whether the mid levels for each range (OR, IB, PM) should be shown on the chart.
- **Level Color Change:** The colors of the plotted levels (high, low, mid) change based on whether the price is above or below the respective level, making it easy to visualize potential support and resistance.
- **Label Positions:** The position of the labels (OR, IB, OP, PM) on the chart can be customized to avoid overlap with other data points.
#### **Key Use Cases:**
- **Intraday Trend Analysis:** Use the OR and IB to identify key levels for the day, providing insights into the possible trend or range for the day.
- **Pre-market Insights:** The PM levels are crucial for understanding where the market stood during the pre-market hours and can be used as reference points during the regular session.
- **Potential Support and Resistance:** The high and low levels of the OR, IB, and PM sessions can act as potential support or resistance, which are useful for setting stop-loss and take-profit levels.
#### **How to Use:**
- Pay attention to the levels provided for OR, IB, and PM as potential entry and exit points.
- Watch for breakouts or reversals around these levels, especially when combined with other technical indicators or price action patterns.
- The mid levels offer an additional reference to assess price direction or identify possible areas of consolidation.
This indicator is perfect for day traders who rely on key intraday levels and pre-market activity to make informed trading decisions. It helps to streamline the process of identifying potential breakouts, reversals, and ranges in the market.
Search in scripts for "high low"
2022 Model ICT Entry Strategy [TradingFinder] One Setup For Life🔵 Introduction
The ICT 2022 model, introduced by Michael Huddleston, is an advanced trading strategy rooted in liquidity and price imbalance, where time and price serve as the core elements. This ICT 2022 trading strategy is an algorithmic approach designed to analyze liquidity and imbalances in the market. It incorporates concepts such as Fair Value Gap (FVG), Liquidity Sweep, and Market Structure Shift (MSS) to help traders identify liquidity movements and structural changes in the market, enabling them to determine optimal entry and exit points for their trades.
This Full ICT Day Trading Model empowers traders to pinpoint the Previous Day High/Low as well as the highs and lows of critical sessions like the London and New York sessions. These levels act as Liquidity Zones, which are frequently swept prior to a market structure shift (MSS) or a retracement to areas such as Optimal Trade Entry (OTE).
Bullish :
Bearish :
🔵 How to Use
The ICT 2022 model is a sophisticated trading strategy that focuses on identifying key liquidity levels and price movements. It operates based on two main principles. In the first phase, the price approaches liquidity zones and sweeps critical levels such as the previous day’s high or low and key session levels.
This movement is known as a Liquidity Sweep. In the second phase, following the sweep, the price retraces to areas like the FVG (Fair Value Gap), creating ideal entry points for trades. Below is a detailed explanation of how to apply this strategy in bullish and bearish setups.
🟣 Bullish ICT 2022 Model Setup
To use the ICT 2022 model in a bullish setup, start by identifying the Previous Day High/Low or key session levels, such as those of the London or New York sessions. In a bullish setup, the price usually moves downward first, sweeping the Liquidity Low. This move, known as a Liquidity Sweep, reflects the collection of buy orders by major market participants.
After the liquidity sweep, the price should shift market structure and start moving upward; this shift, referred to as Market Structure Shift (MSS), signals the beginning of an upward trend. Following MSS, areas like FVG, located within the Discount Zone, are identified. At this stage, the trader waits for the price to retrace to these zones. Once the price returns, a long trade is executed.
Finally, the stop-loss should be set below the liquidity low to manage risk, while the take-profit target is usually placed above the previous day’s high or other identified liquidity levels. This structure enables traders to take advantage of the upward price movement after the liquidity sweep.
🟣 Bearish ICT 2022 Model Setup
To identify a bearish setup in the ICT 2022 model, begin by marking the Previous Day High/Low or key session levels, such as the London or New York sessions. In this scenario, the price typically moves upward first, sweeping the Liquidity High. This move, known as a Liquidity Sweep, signifies the collection of sell orders by key market players.
After the liquidity sweep, the price should shift market structure downward. This movement, called the Market Structure Shift (MSS), indicates the start of a downtrend. Following MSS, areas such as FVG, found within the Premium Zone, are identified. At this stage, the trader waits for the price to retrace to these areas. Once the price revisits these zones, a short trade is executed.
In this setup, the stop-loss should be placed above the liquidity high to control risk, while the take-profit target is typically set below the previous day’s low or another defined liquidity level. This approach allows traders to capitalize on the downward price movement following the liquidity sweep.
🔵 Settings
Swing period : You can set the swing detection period.
Max Swing Back Method : It is in two modes "All" and "Custom". If it is in "All" mode, it will check all swings, and if it is in "Custom" mode, it will check the swings to the extent you determine.
Max Swing Back : You can set the number of swings that will go back for checking.
FVG Length : Default is 120 Bar.
MSS Length : Default is 80 Bar.
FVG Filter : This refines the number of identified FVG areas based on a specified algorithm to focus on higher quality signals and reduce noise.
Types of FVG filters :
Very Aggressive Filter: Adds a condition where, for an upward FVG, the last candle's highest price must exceed the middle candle's highest price, and for a downward FVG, the last candle's lowest price must be lower than the middle candle's lowest price. This minimally filters out FVGs.
Aggressive Filter: Builds on the Very Aggressive mode by ensuring the middle candle is not too small, filtering out more FVGs.
Defensive Filter: Adds criteria regarding the size and structure of the middle candle, requiring it to have a substantial body and specific polarity conditions, filtering out a significant number of FVGs.
Very Defensive Filter: Further refines filtering by ensuring the first and third candles are not small-bodied doji candles, retaining only the highest quality signals.
🔵 Conclusion
The ICT 2022 model is a comprehensive and advanced trading strategy designed around key concepts such as liquidity, price imbalance, and market structure shifts (MSS). By focusing on the sweep of critical levels such as the previous day’s high/low and important trading sessions like London and New York, this strategy enables traders to predict market movements with greater precision.
The use of tools like FVG in this model helps traders fine-tune their entry and exit points and take advantage of bullish and bearish trends after liquidity sweeps. Moreover, combining this strategy with precise timing during key trading sessions allows traders to minimize risk and maximize returns.
In conclusion, the ICT 2022 model emphasizes the importance of time and liquidity, making it a powerful tool for both professional and novice traders. By applying the principles of this model, you can make more informed trading decisions and seize opportunities in financial markets more effectively.
SSL Channel MTFSSL Channel with MTF support, This eliminates the noise of a basic SSL Channel script which is based on ErwinBeckers SSL Channel. So i have used a Multi Time Frame approach to have a clear confirmation of trend and reduce Noise and False signals unlike basic SSL Channel.
This script can be used to determine.
Support/Resistance
High/Low Breakout
Trend Direction
MA candles for Entry
The high and low sma are plotted as SSL CHANNEL when ever the high and low sma cross each other a direction change is observed.
The direction of SSL channel determines the trend of the price. The length of the channel can be changed as required a low value has a high noise and direction can be determined with low accuracy. Increasing the length of SSL channel has high accuracy trend confirmation.
The MTF SSL Channel uses plot from higher timeframe this helps in using SSL Channel as a Price Action Tool. Price when ever crosses over or below the channel determines a breakout. Price tries to move between the High SMA line and Low SMA Line of the SSL Channel rejection, breakouts can be easily observed on a lower timeframe using SSL Channel Plot from a higher timeframe.
I have used 5min/15min chart with MTF SSL from a 1Hr/4Hr and a length of 5 instead of 10. This helps quick direction changes over a period of 1hr to 4hr. Price is trapped within the High SMA and Low SMA lines of SSL Channel. In addition to SSL High Low and average mid line is plotted to additional reference.
Buy Sell Signals are plotted based on crossover of SMA High and Low.
Candle are Plotted Using a SMA with length of 5. This Candle Plot can be used to make an entry based on direction confirmation of SSL. keep in mind the direction of SSL Plot and the candle must be same. Preferably Entry can made above or below the midline of SSL Channel. The Candle Plot eliminates the Noise of traditional Japanese Candlesticks.
Additionally MACD Crossover and MACD Trend line confirmations can be used to confirm a Buy Sell and Entry signals
Alerts are also plotted accordingly.
6 Band Parametric EQThis indicator implements a complete parametric equalizer on any data source using high-pass and low-pass filters, high and low shelving filters, and six fully configurable bell filters. Each filter stage features standard audio DSP controls including frequency, Q factor, and gain where applicable. While parametric EQ is typically used for audio processing, this implementation raises questions about the nature of filtering in technical analysis. Why stop at simple moving averages when you can shape your signal's frequency response with surgical precision? The answer may reveal more about our assumptions than our indicators.
Filter Types and Parameters
High-Pass Filter:
A high-pass filter attenuates frequency components below its cutoff frequency while passing higher frequencies. The Q parameter controls resonance at the cutoff point, with higher values creating more pronounced peaks.
Low-Pass Filter:
The low-pass filter does the opposite - it attenuates frequencies above the cutoff while passing lower frequencies. Like the high-pass, its Q parameter affects the resonance at the cutoff frequency.
High/Low Shelf Filters:
Shelf filters boost or cut all frequencies above (high shelf) or below (low shelf) the target frequency. The slope parameter determines the steepness of the transition around the target frequency , with a value of 1.0 creating a gentle slope and lower values making the transition more abrupt. The gain parameter sets the amount of boost or cut in decibels.
Bell Filters:
Bell (or peaking) filters create a boost or cut centered around a specific frequency. A bell filter's frequency parameter determines the center point of the effect, while Q controls the width of the affected frequency range - higher Q values create a narrower bandwidth. The gain parameter defines the amount of boost or cut in decibels.
All filters run in series, processing the signal in this order: high-pass → low shelf → bell filters → high shelf → low-pass. Each stage can be independently enabled or bypassed.
The frequency parameter for all filters represents the period length of the targeted frequency component. Lower values target higher frequencies and vice versa. All gain values are in decibels, where positive values boost and negative values cut.
The 6-Band Parametric EQ combines these filters into a comprehensive frequency shaping tool. Just as audio engineers use parametric EQs to sculpt sound, this indicator lets you shape market data's frequency components with surgical precision. But beyond its technical implementation, this indicator serves as a thought experiment about the nature of filtering in technical analysis. While traditional indicators often rely on simple moving averages or single-frequency filters, the parametric EQ takes this concept to its logical extreme - offering complete control over the frequency domain of price action. Whether this level of filtering precision is useful for analysis is perhaps less important than what it reveals about our assumptions regarding market data and its frequency components.
Previous Week High & Low with middle lineDescription:
The Previous Week High & Low Indicator is a powerful tool designed to provide traders with key reference levels from the previous trading week. It dynamically calculates and plots the previous week's high, low, and midpoint levels directly on your chart, helping you identify critical support and resistance zones.
Features:
1. **Previous Week High and Low Lines**:
- The indicator displays the high and low prices of the previous trading week, allowing you to analyze price action relative to these levels.
- These lines are plotted as step lines, visible only during the active trading days (Monday to Friday), ensuring clean and uncluttered charts.
2. Midpoint Line:
- The midpoint between the previous week's high and low is calculated and displayed as a reference level.
- This white line can act as a psychological pivot point for market participants.
3. Customizable Display:
- You can toggle the visibility of the high and low lines using input options, tailoring the indicator to your preferences.
4. Precision and Aesthetics:
- The lines are plotted with precision and styled for clarity, using subtle transparency for an unobtrusive yet informative appearance.
Use Case:
- This indicator is ideal for traders who rely on historical price levels for planning entries, exits, or stop-loss placements.
- It works seamlessly with any timeframe and asset, making it versatile for various trading strategies.
How It Works:
- The indicator fetches the previous week's high and low prices using the weekly timeframe and "lookahead" mode to ensure these levels remain static after the week's close.
- The lines are plotted only on weekdays (Monday to Friday) to exclude weekend data, ensuring accuracy for markets that operate 24/5.
This tool simplifies your chart analysis and empowers you to make informed trading decisions based on historical price dynamics.
Asia Sessions AutoPlotting**Asia Sessions AutoPlotting**
This script is designed to automatically detect and plot the Asia session high and low levels directly on your chart, providing key session data for trading analysis. It is highly customizable, making it an essential tool for traders who rely on session data for decision-making.
### Key Features:
- **Asia Session Detection**: Automatically identifies the Asia session based on user-defined time settings (default: 0000-0845 UTC).
- **High/Low Line Plotting**: Displays high and low price levels for the session with customizable colors and line styles.
- **Line Extensions**: Option to extend session high/low lines for future price action reference.
- **Session Background Fill**: Adds an optional colored background to highlight the Asia session period.
- **Day Labels**: Includes labels for the session high/low levels with the corresponding day of the week.
- **Dynamic Session History**: Limits the display to a user-specified number of past sessions (default: 7) to keep the chart clean and focused.
- **Customizable Colors**: Highlights Mondays with unique colors for easy identification, while other weekdays use a different scheme.
### Use Cases:
- Identify key session levels for trading strategies.
- Monitor Asia session dynamics and their impact on subsequent sessions.
- Spot significant price reactions around session highs/lows.
### Inputs:
- **Session Time**: Adjust the session time to match your preferred Asia trading hours.
- **Toggle High/Low Lines**: Enable or disable the plotting of session highs and lows.
- **Line Extensions**: Extend the session high/low lines into future bars for better visualization.
- **Background Highlight**: Toggle a colored background for the Asia session.
- **Maximum Sessions**: Define how many past sessions to display for clarity.
This script is perfect for intraday traders, scalpers, and swing traders looking to gain insight into the Asia session and its influence on global markets. Fully adjustable and easy to use, it enhances your chart with critical information at a glance.
Simply add it to your TradingView chart, configure your settings, and let it do the work for you!
Katalyst's Opening Range BreakoutKatalyst's Opening Range Breakout + No Trade Zone
📜 Overview:
This indicator allows traders to visualize the high and low of the opening range for a user-selected timeframe (e.g., 30s, 1m, 5m, 15m). It features fully customizable lines, labels, and an optional **No Trade Zone** fill to help you identify breakout levels with ease.
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🎯 Key Features:
1. **Customizable Opening Range**:
- Select your preferred opening range duration: **30 seconds, 1 minute, 2 minutes, 5 minutes, 10 minutes, or 15 minutes**.
- The indicator calculates and plots the **high** and **low** of the selected opening range.
2. **Dynamic Line Styling**:
- Choose the **line color**, **transparency**, and **style**: **Solid, Dashed, or Dotted**.
- Lines extend to the right of the chart for clarity.
3. **No Trade Zone** *(Optional / Disabled by default)*:
- When enabled, fills the area between the high and low lines with a customizable **color and transparency**.
- Helps visually identify consolidation areas where trading might be avoided.
4. **Labels for Precision**:
- Clearly displays the **Opening Range High** and **Low** values.
- Labels are color-coded and positioned dynamically for easy interpretation.
5. **Clean and Efficient Updates**:
- The indicator deletes old lines, labels, and fills before creating new ones, ensuring a clutter-free chart.
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⚙️ How to Use:
1. **Select Your Timeframe**:
- From the settings, choose your desired opening range duration: 30s, 1m, 2m, 5m, 10m, or 15m.
2. **Customize the Visuals**:
- Adjust line color, style, and transparency.
- Enable the **No Trade Zone** for a transparent background fill between the high and low lines.
3. **Interpret the Breakout**:
- Watch for price movements above or below the **opening range** to identify potential breakout opportunities.
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🛠 Settings:
Opening Range Duration: Select the timeframe for the opening range (30s, 1m, 2m, 5m, 10m, 15m).
Line Color: Set the color of the range lines.
Line Transparency: Adjust the transparency of the lines (0 = solid, 100 = invisible).
Line Style: Choose line style: Solid, Dashed, or Dotted.
Label Colors: Customize the label colors for the high and low values.
Enable No Trade Zone: Fill the area between high and low lines with a transparent color.
No Trade Zone Color: Set the fill color for the no trade zone.
No Trade Zone Transparency: Adjust the transparency of the no trade zone fill.
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📈 Ideal For
Day traders and scalpers looking to trade **breakouts**.
Traders who want to identify areas of consolidation visually.
Anyone who relies on the **opening range** for their trading strategy.
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🔍 Example Usage:
Set the opening range to **5 minutes** and enable the **No Trade Zone** with a light red fill.
Watch for price to break above or below the high/low lines to signal potential trade opportunities.
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✨ Why Use This Indicator?
This script simplifies your breakout strategy by providing a clear, visually appealing representation of the opening range. The flexible customization options and the optional **No Trade Zone** make it a powerful tool for identifying high-probability trades.
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Let me know if you need any additional tweaks or clarifications for this description. It's all set to help traders understand and use your powerful script! 🚀📈
Ensemble Alerts█ OVERVIEW
This indicator creates highly customizable alert conditions and messages by combining several technical conditions into groups , which users can specify directly from the "Settings/Inputs" tab. It offers a flexible framework for building and testing complex alert conditions without requiring code modifications for each adjustment.
█ CONCEPTS
Ensemble analysis
Ensemble analysis is a form of data analysis that combines several "weaker" models to produce a potentially more robust model. In a trading context, one of the most prevalent forms of ensemble analysis is the aggregation (grouping) of several indicators to derive market insights and reinforce trading decisions. With this analysis, traders typically inspect multiple indicators, signaling trade actions when specific conditions or groups of conditions align.
Simplifying ensemble creation
Combining indicators into one or more ensembles can be challenging, especially for users without programming knowledge. It usually involves writing custom scripts to aggregate the indicators and trigger trading alerts based on the confluence of specific conditions. Making such scripts customizable via inputs poses an additional challenge, as it often involves complicated input menus and conditional logic.
This indicator addresses these challenges by providing a simple, flexible input menu where users can easily define alert criteria by listing groups of conditions from various technical indicators in simple text boxes . With this script, you can create complex alert conditions intuitively from the "Settings/Inputs" tab without ever writing or modifying a single line of code. This framework makes advanced alert setups more accessible to non-coders. Additionally, it can help Pine programmers save time and effort when testing various condition combinations.
█ FEATURES
Configurable alert direction
The "Direction" dropdown at the top of the "Settings/Inputs" tab specifies the allowed direction for the alert conditions. There are four possible options:
• Up only : The indicator only evaluates upward conditions.
• Down only : The indicator only evaluates downward conditions.
• Up and down (default): The indicator evaluates upward and downward conditions, creating alert triggers for both.
• Alternating : The indicator prevents alert triggers for consecutive conditions in the same direction. An upward condition must be the first occurrence after a downward condition to trigger an alert, and vice versa for downward conditions.
Flexible condition groups
This script features six text inputs where users can define distinct condition groups (ensembles) for their alerts. An alert trigger occurs if all the conditions in at least one group occur.
Each input accepts a comma-separated list of numbers with optional spaces (e.g., "1, 4, 8"). Each listed number, from 1 to 35, corresponds to a specific individual condition. Below are the conditions that the numbers represent:
1 — RSI above/below threshold
2 — RSI below/above threshold
3 — Stoch above/below threshold
4 — Stoch below/above threshold
5 — Stoch K over/under D
6 — Stoch K under/over D
7 — AO above/below threshold
8 — AO below/above threshold
9 — AO rising/falling
10 — AO falling/rising
11 — Supertrend up/down
12 — Supertrend down/up
13 — Close above/below MA
14 — Close below/above MA
15 — Close above/below open
16 — Close below/above open
17 — Close increase/decrease
18 — Close decrease/increase
19 — Close near Donchian top/bottom (Close > (Mid + HH) / 2)
20 — Close near Donchian bottom/top (Close < (Mid + LL) / 2)
21 — New Donchian high/low
22 — New Donchian low/high
23 — Rising volume
24 — Falling volume
25 — Volume above average (Volume > SMA(Volume, 20))
26 — Volume below average (Volume < SMA(Volume, 20))
27 — High body to range ratio (Abs(Close - Open) / (High - Low) > 0.5)
28 — Low body to range ratio (Abs(Close - Open) / (High - Low) < 0.5)
29 — High relative volatility (ATR(7) > ATR(40))
30 — Low relative volatility (ATR(7) < ATR(40))
31 — External condition 1
32 — External condition 2
33 — External condition 3
34 — External condition 4
35 — External condition 5
These constituent conditions fall into three distinct categories:
• Directional pairs : The numbers 1-22 correspond to pairs of opposing upward and downward conditions. For example, if one of the inputs includes "1" in the comma-separated list, that group uses the "RSI above/below threshold" condition pair. In this case, the RSI must be above a high threshold for the group to trigger an upward alert, and the RSI must be below a defined low threshold to trigger a downward alert.
• Non-directional filters : The numbers 23-30 correspond to conditions that do not represent directional information. These conditions act as filters for both upward and downward alerts. Traders often use non-directional conditions to refine trending or mean reversion signals. For instance, if one of the input lists includes "30", that group uses the "Low relative volatility" condition. The group can trigger an upward or downward alert only if the 7-period Average True Range (ATR) is below the 40-period ATR.
• External conditions : The numbers 31-35 correspond to external conditions based on the plots from other indicators on the chart. To set these conditions, use the source inputs in the "External conditions" section near the bottom of the "Settings/Inputs" tab. The external value can represent an upward, downward, or non-directional condition based on the following logic:
▫ Any value above 0 represents an upward condition.
▫ Any value below 0 represents a downward condition.
▫ If the checkbox next to the source input is selected, the condition becomes non-directional . Any group that uses the condition can trigger upward or downward alerts only if the source value is not 0.
To learn more about using plotted values from other indicators, see this article in our Help Center and the Source input section of our Pine Script™ User Manual.
Group markers
Each comma-separated list represents a distinct group , where all the listed conditions must occur to trigger an alert. This script assigns preset markers (names) to each condition group to make the active ensembles easily identifiable in the generated alert messages and labels. The markers assigned to each group use the format "M", where "M" is short for "Marker" and "x" is the group number. The titles of the inputs at the top of the "Settings/Inputs" tab show these markers for convenience.
For upward conditions, the labels and alert messages show group markers with upward triangles (e.g., "M1▲"). For downward conditions, they show markers with downward triangles (e.g., "M1▼").
NOTE: By default, this script populates the "M1" field with a pre-configured list for a mean reversion group ("2,18,24,28"). The other fields are empty. If any "M*" input does not contain a value, the indicator ignores it in the alert calculations.
Custom alert messages
By default, the indicator's alert message text contains the activated markers and their direction as a comma-separated list. Users can override this message for upward or downward alerts with the two text fields at the bottom of the "Settings/Inputs" tab. When the fields are not empty , the alerts use that text instead of the default marker list.
NOTE: This script generates alert triggers, not the alerts themselves. To set up an alert based on this script's conditions, open the "Create Alert" dialog box, then select the "Ensemble Alerts" and "Any alert() function call" options in the "Condition" tabs. See the Alerts FAQ in our Pine Script™ User Manual for more information.
Condition visualization
This script offers organized visualizations of its conditions, allowing users to inspect the behaviors of each condition alongside the specified groups. The key visual features include:
1) Conditional plots
• The indicator plots the history of each individual condition, excluding the external conditions, as circles at different levels. Opposite conditions appear at positive and negative levels with the same absolute value. The plots for each condition show values only on the bars where they occur.
• Each condition's plot is color-coded based on its type. Aqua and orange plots represent opposing directional conditions, and purple plots represent non-directional conditions. The titles of the plots also contain the condition numbers to which they apply.
• The plots in the separate pane can be turned on or off with the "Show plots in pane" checkbox near the top of the "Settings/Inputs" tab. This input only toggles the color-coded circles, which reduces the graphical load. If you deactivate these visuals, you can still inspect each condition from the script's status line and the Data Window.
• As a bonus, the indicator includes "Up alert" and "Down alert" plots in the Data Window, representing the combined upward and downward ensemble alert conditions. These plots are also usable in additional indicator-on-indicator calculations.
2) Dynamic labels
• The indicator draws a label on the main chart pane displaying the activated group markers (e.g., "M1▲") each time an alert condition occurs.
• The labels for upward alerts appear below chart bars. The labels for downward alerts appear above the bars.
NOTE: This indicator can display up to 500 labels because that is the maximum allowed for a single Pine script.
3) Background highlighting
• The indicator can highlight the main chart's background on bars where upward or downward condition groups activate. Use the "Highlight background" inputs in the "Settings/Inputs" tab to enable these highlights and customize their colors.
• Unlike the dynamic labels, these background highlights are available for all chart bars, irrespective of the number of condition occurrences.
█ NOTES
• This script uses Pine Script™ v6, the latest version of TradingView's programming language. See the Release notes and Migration guide to learn what's new in v6 and how to convert your scripts to this version.
• This script imports our new Alerts library, which features functions that provide high-level simplicity for working with complex compound conditions and alerts. We used the library's `compoundAlertMessage()` function in this indicator. It evaluates items from "bool" arrays in groups specified by an array of strings containing comma-separated index lists , returning a tuple of "string" values containing the marker of each activated group.
• The script imports the latest version of the ta library to calculate several technical indicators not included in the built-in `ta.*` namespace, including Double Exponential Moving Average (DEMA), Triple Exponential Moving Average (TEMA), Fractal Adaptive Moving Average (FRAMA), Tilson T3, Awesome Oscillator (AO), Full Stochastic (%K and %D), SuperTrend, and Donchian Channels.
• The script uses the `force_overlay` parameter in the label.new() and bgcolor() calls to display the drawings and background colors in the main chart pane.
• The plots and hlines use the available `display.*` constants to determine whether the visuals appear in the separate pane.
Look first. Then leap.
Fibonacci Moving Average PlusFibonacci Moving Average Plus is a sophisticated technical indicator that employs the first 15 numbers of the Fibonacci sequence to create dynamic moving average channels. This indicator aims to capture both immediate and long-term price movements by calculating Exponential Moving Averages (EMAs) based on these Fibonacci values. By using Fibonacci-based moving averages for both high and low price points, the indicator generates a visual channel that reflects the ebb and flow of market trends, acting as potential zones of support and resistance. Additionally, the indicator provides midline, retracement, and extension levels rooted in Fibonacci ratios, which are frequently observed as key levels for reversals or trend continuation.
Ideology Behind Using Fibonacci Sequence-Based Moving Averages
The Fibonacci sequence, known for its mathematical harmony and prevalence in natural patterns, is widely utilized in technical analysis to identify potential turning points in markets. In this indicator, the first 15 Fibonacci numbers (5, 8, 13, 21, etc.) are used as the lookback periods for EMAs to capture different layers of market sentiment. These moving averages represent timeframes that are theoretically in alignment with the natural rhythms of market cycles, where key levels—often coinciding with Fibonacci numbers—can act as magnetic points for price.
The Fibonacci high and low channels aim to encapsulate price action, giving traders a sense of whether the market is trending, consolidating, or experiencing reversal pressure. These levels, grounded in both mathematics and market psychology, help traders spot areas where price might face resistance or find support.
Key Features
Fibonacci Moving Average High and Low: This indicator calculates the high and low EMAs based on Fibonacci sequence numbers (e.g., 5, 8, 13, etc.) for enhanced trend analysis.
Golden Pocket Retracement (GPR) and Extension (GPE) Bands: Displays common Fibonacci retracement and extension levels (0.618, 0.65 for retracement, and 1.618, 1.65 for extension).
Midline: Plots the average of the Fibonacci high and low to act as an additional reference level.
Stop-Loss Levels: Provides suggested stop-loss levels based on Fibonacci levels for both long and short positions.
Basic User Guide
Adjust Input Settings:
Input Timeframe: Set a specific timeframe for the Fibonacci moving average calculation, separate from the chart's primary timeframe.
Show Fibonacci MA High/Low: Toggle the visibility of the high and low Fibonacci moving averages.
Show Mid Line: Display a midline for added trend reference.
Show Golden Pocket Bands: Choose to display retracement or extension bands for potential support or resistance zones.
Show Stop-Loss Levels: Enable to visualize potential stop-loss levels for both long and short trades.
Interpretation:
Fibonacci MA High and Low: Use these lines to gauge the general trend. When the price is above both, it may indicate an uptrend; below both, a downtrend.
Golden Pocket Retracement: This zone (between 0.618 and 0.65) is often a key level for potential reversals or support/resistance.
Golden Pocket Extension: The 1.618 and 1.65 levels can indicate potential profit-taking or trend exhaustion points.
Stop-Loss Levels: The calculated stop-loss levels (long SL below and short SL above) can aid in risk management.
Customization:
You can customize the appearance and visibility of each component through the input settings to fit your specific strategy and visual preferences.
This indicator should be used alongside other technical analysis tools to provide a more comprehensive trading approach.
This Indicator would not exist without the original contributions and blessing from Sofien Kaabar
Market structureHi all!
This script shows you the market structure. You can choose to show internal market structure (with pivots of a default length of 5) and swing market structure (with pivots of a default length of 50). For these two trends it will show you:
• Break of structure (BOS)
• Change of character (CHoCH) (mandatory)
• Equal high/low (EQH/EQL)
It's inspired by "Smart Money Concepts (SMC) " by LuxAlgo that will also show you the market structure.
It will create the two market structures depending on the pivots found. Both of these market structures can be enabled/disabled. The pivots length can be configured separately. The pivots found will be the 'base' of this indicator and will show you when price breaks it. When that happens a break of structure or a change of character will be created. The latest 5 pivots found within the current trends will be kept to take action on. The internal market structure is shown with dashed lines and swing market structure is shown with solid lines.
A break of structure is removed if an earlier pivots within the same trend is broken. Like in the images below, the first pivot (in the first image) is removed when an earlier pivot's higher price within the same trend is broken (the second image):
Equal high/lows have a pink zone (by default but can be changed by the user). These zones can be configured to be extended to the right (off by default). Equal high/lows are only possible if it's not been broken by price and if a later bar has a high/low within the limit it's added to the zone (without it being more 'extreme' (high or low) then the previous price). A factor (percentage of width) of the Average True Length (of length 14) that the pivot must be within to to be considered an Equal high/low. This is configurable and sets this 'limit' and is 10 by default.
You are able to show the pivots that are used. "HH" (higher high), "HL" (higher low), "LH" (lower high), "LL" (lower low) and "H"/"L" (for pivots (high/low) when the trend has changed) are the labels used.
This script has proven itself useful for me to quickly see how the current market is. You can see the pivots (price and bar) where break of structure or change of character happens to see the current trends. I hope that you will find this useful for you.
When programming I focused on simplicity and ease of read. I did not focus on performance, I will do so if it's a problem (haven't noticed it is one yet).
You can set alerts for when a change of character happens. You can configure it to fire on when it happens (all or once per bar) but it defaults to 'once_per_bar_close' to avoid repainting. This has the drawback to alert you when the bar closes.
TLDR: this is an indicator showing you the market structure (break of structures and change of characters) using swing points/pivots. Two trends can be shown, internal (with pivots of length of 5) and swing (with pivots of the length of 50).
Best of trading luck!
CandlestickPatternsLibrary "CandlestickPatterns"
zigzag(_low, _high, depth, deviation, backstep)
Parameters:
_low (float)
_high (float)
depth (int)
deviation (int)
backstep (int)
getTrend(trendType, currentClose, zz_downtrend, zz_uptrend, ema14, ema28)
Parameters:
trendType (string)
currentClose (float)
zz_downtrend (bool)
zz_uptrend (bool)
ema14 (float)
ema28 (float)
isInside(currentHigh, currentLow, currentClose, currentOpen, prevHigh, prevLow)
Parameters:
currentHigh (float)
currentLow (float)
currentClose (float)
currentOpen (float)
prevHigh (float)
prevLow (float)
checkMorningStar(open0, high0, low0, close0, open1, high1, low1, close1, open2, high2, low2, close2, innerCandleThreshold, closingMinThreshold, closingMaxThreshold, useDojiFilter, dojiSize, downTrend)
Parameters:
open0 (float)
high0 (float)
low0 (float)
close0 (float)
open1 (float)
high1 (float)
low1 (float)
close1 (float)
open2 (float)
high2 (float)
low2 (float)
close2 (float)
innerCandleThreshold (float)
closingMinThreshold (float)
closingMaxThreshold (float)
useDojiFilter (bool)
dojiSize (float)
downTrend (bool)
checkEveningStar(open0, high0, low0, close0, open1, high1, low1, close1, open2, high2, low2, close2, innerCandleThreshold, closingMinThreshold, closingMaxThreshold, useDojiFilter, dojiSize, upTrend)
Parameters:
open0 (float)
high0 (float)
low0 (float)
close0 (float)
open1 (float)
high1 (float)
low1 (float)
close1 (float)
open2 (float)
high2 (float)
low2 (float)
close2 (float)
innerCandleThreshold (float)
closingMinThreshold (float)
closingMaxThreshold (float)
useDojiFilter (bool)
dojiSize (float)
upTrend (bool)
checkHammerPattern(open, high, low, close, bodyAvg, shadowFactor, downTrend)
Parameters:
open (float)
high (float)
low (float)
close (float)
bodyAvg (float)
shadowFactor (float)
downTrend (bool)
checkInvertedHammerPattern(open, high, low, close, bodyAvg, shadowFactor, downTrend)
Parameters:
open (float)
high (float)
low (float)
close (float)
bodyAvg (float)
shadowFactor (float)
downTrend (bool)
checkHangingManPattern(open, high, low, close, bodyAvg, shadowFactor, upTrend)
Parameters:
open (float)
high (float)
low (float)
close (float)
bodyAvg (float)
shadowFactor (float)
upTrend (bool)
checkShootingStarPattern(open, high, low, close, bodyAvg, shadowFactor, upTrend)
Parameters:
open (float)
high (float)
low (float)
close (float)
bodyAvg (float)
shadowFactor (float)
upTrend (bool)
checkLevels(high0, high1, high2, low0, low1, low2, lookbackPeriod)
Parameters:
high0 (float)
high1 (float)
high2 (float)
low0 (float)
low1 (float)
low2 (float)
lookbackPeriod (int)
Flashtrader´s Statistical BandwidthsThe vast majority of traders exclusively concern
themselves with trend-following in all its facets. Scoring
points with trends on a regular basis is a difficult task
since prices do not constantly move in one direction
or another. In the case of the DAX future, for example,
only about 30 per cent of all trading days in a year are
trend days. And of these, there are x percent long ones
and x per cent short ones. Catching the very days when
prices rise or fall from the opening to the close is a major
challenge for a trader who also needs to have previously
recognised the corresponding direction.
However, there are also other ways of profit-taking
every day – for example, by using the mean reversion
strategy. The idea behind this is the fact that prices reach
a high and a low every day – but very rarely close at the
high or the low. This means that prices always move
away from these extreme points and the closing price is
somewhere in between. A profitable trading strategy can
be developed out of this.
But how can you know where the high and the low
will be tomorrow? Is it possible for you to know this in
advance? No – because no one can predict the future. Or
can they? At least it can be statistically determined how
high or low prices could go tomorrow. There is a high
degree of probability that one of the two possibilities
will materialise. It will then be necessary to act.
Calculation
Classic pivot points for the following day are calculated
from the high, low and closing price. But does it really
make sense to use such a mix? I don’t think so and
use a different calculation for this strategy. In a first step,
only the differences between the start and the high or low
are calculated on a daily basis. To avoid being dependent
on individual days and outliers, it is advisable to calculate,
in a second step, the average of these differences over
the past five days. Finally, this average will then be added
at the opening price of the current trading day for the
upper statistical bandwidth and subtracted for the lower
bandwidth.
upper bandwidth = oSTB (violet dashed line in the chart)
lower bandwidth = uSTB (violet dashedline in the chart)
The second interesting question is, if the previous day's high has been exceeded, how much further can the price rise from a mathematical/statistical point of view?
These calculated previous day highs expansions are shown as red dashed lines
Previous day's high expansion = VTHA
Previous day's low expansion = VTTA
For further orientation, the previous day's high (VTH) and the previous day's low (VTT) are shown in light blue dashed lines
And as a supplement, the previous day's close in the DAX Future at 10:00 p.m. VTSA in violet solid lines and the previous day's close in the cash register at 5:30 p.m. VTSN in yellow solid lines
Reaching the calculated extreme values does not mean that the trend has to change immediately, but there is at least temporary exhaustion potential with which you can earn a few points every day in the area of scalping.
Example for cheap entry long:
Example for cheap entry short:
Deutsch:
Die Masse der Trader beschäftigt sich ausschließlich mit Trendfolge in all ihren Facetten. Mit Trends regelmäßig zu punkten ist ein schwieriges Unterfangen, da die Kurse nicht ständig in die eine oder andere Richtung laufen. Beim DAX-Future zum Beispiel sind von allen Börsentagen im Jahr lediglich zirka 30 Prozent Trendtage. Davon sind dann auch noch x Prozent Long und x Prozent Short. Hier genau die Tage abzupassen, an denen die Kurse von Börsenbeginn bis zum Schluss steigen beziehungsweise fallen, ist eine große Herausforderung – wobei der Trader zuvor noch die entsprechende Richtung erkannt haben muss. Es gibt jedoch auch noch andere Methoden täglich Gewinne mitzunehmen, zum Beispiel mit der Mean-Reversion-Strategie (Mittelwertumkehr).
Hintergrund ist die Tatsache, dass die Kurse jeden Tag ein Hoch und ein Tief erreichen – aber sehr selten am Hoch oder am Tief schließen. Das bedeutet, dass die Preise sich immer wie der von diesen Extrempunkten wegbewegen und der Schlusskurs irgendwo dazwischen liegt. Hieraus lässt sich eine profitable Handelsstrategie entwickeln. Aber woher kannst Du wissen, wo morgen das Hoch und das Tief sein wird? Kannst Du das vorher schon wissen? Nein – denn niemand kann die Zukunft vorhersagen. Oder doch? Statistisch lässt sich zumindest bestimmen, wie hoch und wie tief die Kurse morgen steigen oder fallen könnten. Eine Seite wird mit sehr hoher Wahrscheinlichkeit ein treffen. Dann gilt es zu handeln.
Berechnung Klassischer Pivot-Punkte für den folgenden Tag werden aus Hoch, Tief und Schlusskurs berechnet. Aber ist es wirklich sinnvoll, einen solchen Mix zu verwenden? Ich finde das nicht und verwenden für diese Strategie eine andere Berechnung. Im ersten Schritt werden täglich die Differenzen nur vom Start bis zum Hoch beziehungsweise Tief errechnet. Um nicht von einzelnen Tagen und Ausreißern abhängig zu sein, empfiehlt es sich, in einem zweiten Schritt den Durchschnitt dieser Differenzen über die letzten fünf Tage zu errechnen. Zuletzt wird dann dieser Durchschnitt zum Eröffnungskurs des aktuellen Handelstages für die obere statistische Bandbreite addiert und für die untere Bandbreite subtrahiert.
Obere statistische Bandbreite = oSTB (violette gestrichelte Linie im Chart)
Untere statistische Bandbreite = uSTB (violette gestrichelte Linie im Chart)
Die zweite interessante Frage ist, wenn das Vortageshoch überschritten wurde, wie weit kann der Kurs dann noch steigen aus mathematisch/statistischer Sicht?
Diese berechneten Vortagesextremausdehnungen sind als rote gestrichelte Linien dargestellt
Vortageshochausdehnung = VTHA
Vortagestiefausdehnung = VTTA
Für die weitere Orientierung sind die Vortageshochs (VTH) und die Vortagestiefs (VTT) als hellblaue gestrichelte Linien abgebildet.
Als Ergänzung wird noch der Vortages Schluss im Dax Future um 22:00 Uhr VTSA mit einer violetten durchgezogenen Linie und der Kassamarktschluss um 17:30 Uhr mit einer gelben durchgezogenen Linie gezeigt.
Das Erreichen der berechneten Extremwerte bedeutet nicht, das der Trend sofort drehen muss, aber es sind zumindest temporäre Erschöpfungspotentiale mit denen sich im Bereich scalping täglich einige Punkte verdienen lassen.
Beispiel für günstigen Einstieg Long:
Beispiel für günstigen Einstieg Short:
Market Structure & Session Alerts### Market Structure & Session Alerts Indicator
#### Overview
The "Market Structure & Session Alerts" indicator is a comprehensive tool designed to assist traders in identifying key market structure levels, detecting liquidity sweeps, and receiving alerts for specific trading sessions. This indicator is particularly useful for traders who want to keep an eye on previous high and low levels and be alerted during pre-London and pre-New York sessions.
#### Features
1. **Previous High/Low Levels:**
- **Daily, Weekly, and Monthly Highs and Lows:** The indicator plots the previous day, week, and month high and low levels on the chart. These levels can be crucial for identifying support and resistance zones.
- **Toggle Display:** Users can choose to show or hide these levels using the "Show Previous Day/Week/Month High/Low" option.
2. **Liquidity Sweep Detection:**
- **Liquidity Sweep Identification:** The indicator detects liquidity sweeps when the current price closes above the previous day's high. This can signal potential reversals or continuations in the market.
- **Visual Alerts:** When a liquidity sweep is detected, a green triangle is plotted below the bar.
3. **Session Alerts:**
- **Session Timings:** Users can set specific start and end times for the pre-London and pre-New York sessions to match their timezone.
- **Visual Background Highlight:** The background of the chart is highlighted in yellow during the defined session times to provide a visual cue.
- **Alert Messages:** The indicator can generate alerts to notify traders when the market enters the pre-London or pre-New York session.
4. **Current Price Line:**
- The current price is plotted as a black line, providing a clear visual reference for the current market price.
#### How to Use
1. **Input Parameters:**
- `Show Previous Day/Week/Month High/Low`: Enable or disable the display of previous high/low levels.
- `Show Liquidity Sweep`: Enable or disable the detection and display of liquidity sweeps.
- `Show Session Alerts`: Enable or disable session alerts and background highlights.
2. **Session Timing Adjustments:**
- Set the `Pre-London Start`, `Pre-London End`, `Pre-New York Start`, and `Pre-New York End` times according to your timezone to ensure accurate session alerts.
3. **Alerts:**
- Make sure alerts are enabled in your TradingView settings to receive notifications when the market enters the pre-London or pre-New York sessions.
#### Example Use Cases
- **Day Traders:** Identify potential support and resistance levels using the previous day's high and low.
- **Swing Traders:** Use weekly and monthly high and low levels to determine significant market structure points.
- **Scalpers:** Detect liquidity sweeps to identify potential quick trades.
- **Session Traders:** Be alerted when the market enters key trading sessions to align your trading strategy with major market activities.
This indicator combines multiple market analysis tools into one, providing a robust system for traders to enhance their trading decisions and market awareness.
DTB
Dynamic Trendline Bands with Buy/Sell Pressure Detection
This indicator provides a comprehensive analysis of price movements by incorporating smoothed high and low bands, a midline, and the detection of buying and selling pressure. It is designed to help traders identify key support and resistance levels as well as potential buy and sell signals.
**Features:**
- **Smooth High and Low Bands:** Based on the highest high and lowest low over a specified period, smoothed using a simple moving average (SMA) to reduce noise and enhance clarity.
- **Midline:** The average of the smoothed high and low bands, providing a central reference point for price movements.
- **Buying and Selling Pressure Detection:** Highlights candles with significant buying or selling pressure, indicated by light green for buying pressure and light red for selling pressure. This is determined based on volume thresholds and price movement.
- **Trendlines:** Dynamic trendlines are drawn based on recent highs and lows, helping to visualize the current trend direction.
**How to Use:**
1. **High-Low Bands:** Use these bands to identify key support and resistance levels.
2. **Midline:** Monitor the midline for potential mean reversion trades.
3. **Buying/Selling Pressure Candles:** Look for candles highlighted in light green or red to identify potential buy or sell signals.
4. **Trendlines:** Follow the dynamic trendlines to understand the direction of the current trend.
**Inputs:**
- **Length:** Number of bars to consider for calculating the highest high and lowest low (default: 200).
- **Smooth Length:** Period for the simple moving average to smooth the high and low bands (default: 10).
- **Volume Threshold Multiplier:** Multiplier for the average volume to detect significant buying or selling pressure (default: 1.5).
This indicator is suitable for all timeframes and can be used in conjunction with other technical analysis tools to enhance your trading strategy.
Stop Hunts [MK]Liquidity rests above/below previous highs and lows because these are the areas where traders are most likely to leave their orders/stop losses. The market can tap into this liquidity source by going beyond the previous highs and lows, this liquidity can then be used to reverse the market in the opposite direction.
As traders we may want to know if price will continue beyond previous highs and lows, or reverse the market. If price looks to be reversing after tapping into liquidity, this can be a good area to enter a trade. The same area can be used as a take profit level also.
The indicator identifies previous high/lows in two ways:
1. previous high/lows using 'PIVOT POINTS'. Pivots are easy to spot and are obvious within a price trend. Also called 'higher highs", "lower lows" etc. The number of candles required to form the pivot point can be adjusted in the script settings.
see below example of pivot point and stop hunt:
www.tradingview.com
see how price reversed upwards after stop hunt on pivot point above.
2. previous candle high/lows. A previous candles high and low are also good areas of liquidity.
see below example of previous candle stop hunt:
see how price reversed upwards after stop hunt on previous candle low above.
Personally, I use the pivot point stop hunts on lower timeframes and previous candle stop hunts on higher timeframes. However users can adjust on which timeframes to show the indicator depending on their own trading style.
As ever all items within 'settings' are customizable.
The indicator is by no means a 'trading strategy' and users should be fully aware of the stop hunt concept and have conducted extensive back-testing before using with 'live' accounts.
The indicator may also serve as a 'teaching aid' to new students and as a reminder to more experienced traders.
MarketRangerThis indicator puts a selection of elements together providing traders with insights into price dynamics, trend changes, and potential trading opportunities within the specified timeframe.
Trading Range Defined by Support and Resistance :
Support and resistance levels are calculated using the lowest low and highest high over specified periods.
These
levels define the boundaries of the trading range within which the price moves.
WMA Color Changing based on Slope :
The script uses three Weighted Moving Averages (WMAs) with different lengths.
The color of the main WMA changes based on its slope.
When the slope of the WMA is positive (indicating an uptrend), it's displayed in blue. When it's
negative (indicating a downtrend), it's displayed in pink.
New High/Low Detection :
The script detects new highs and lows in the price action.
A new high is detected when the current high crosses under the previous resistance level, and a new low is detected when the current low crosses over the previous support level.
These
detections are marked by triangle shapes above or below the bars.
WMA Crosses :
The script calculates the difference between the two WMAs.
When the faster WMA crosses above the slower WMA, indicating a potential bullish signal, a blue cross shape is plotted below the bar.
When the faster WMA crosses below the slower WMA, indicating a potential bearish signal, a
pink cross shape is plotted above the bar.
Slope Changes :
The script calculates the slope of the main WMA and tracks changes in slope.
A positive slope indicates an upward trend, while a negative slope indicates a downward trend.
Slope changes from negative to positive indicate potential bullish momentum, and from
positive to negative indicate potential bearish momentum.
Customizable Pivot Levels :
Pivot levels are calculated based on user-defined percentages of the range between support and resistance.
Pivot Level 1 and Pivot Level 2 provide additional reference points for potential reversals or trend continuation.
Usage :
The indicator provides support and resistance levels, new high/low alerts, and WMA crosses.
The midpoint and customizable pivot levels offer potential trading zones.
Slope change points indicate potential shifts in market sentiment.
Customize the pivot levels according to your trading strategy.
Parameters :
Adjust the WMA lengths and support/resistance lengths to suit your trading style.
Modify the visibility settings to control how many periods of support and resistance are displayed.
Customize the pivot levels to fit your preferred trading strategy.
Alerts :
Alerts are triggered for new high/low points and WMA crosses.
Use alerts to stay informed about potential trading opportunities.
Interpretation :
Watch for new high/low points for potential trend reversals or continuations.
Monitor WMA crosses and slope changes for signals of market direction.
Consider trading near support/resistance levels and pivot points.
Additional Notes :
Experiment with different settings to find the configuration that best suits your trading preferences.
Backtest the indicator on historical data to validate its effectiveness before using it in live trading.
Advanced MACD [CryptoSea]Advanced MACD (AMACD) enhances the traditional MACD indicator, integrating innovative features for traders aiming for deeper insights into market momentum and sentiment. It's crafted for those seeking to explore nuanced behaviors of the MACD histogram, thus offering a refined perspective on market dynamics.
Divergence moves can offer insight into continuation or potential reversals in structure, the example below is a clear continuation signal.
Key Features
Enhanced Histogram Analysis: Precisely tracks movements of the MACD histogram, identifying growth or decline periods, essential for understanding market momentum.
High/Low Markers: Marks the highest and lowest points of the histogram within a user-defined period, signaling potential shifts in the market.
Dynamic Averages Calculation: Computes average durations of histogram phases, providing a benchmark against historical performance.
Color-Coded Histogram: Dynamically adjusts the histogram's color intensity based on the current streak's duration relative to its average, offering a visual cue of momentum strength.
Customisable MACD Settings: Enables adjustments to MACD parameters, aligning with individual trading strategies.
Interactive Dashboard: Showcases an on-chart table with average durations for each phase, aiding swift decision-making.
Settings & Customisation
MACD Settings: Customise fast length, slow length, and signal smoothing to tailor the MACD calculations to your trading needs.
Reset Period: Determine the number of bars to identify the histogram's significant high and low points.
Histogram High/Lows: Option to display critical high and low levels of the histogram for easy referencing.
Candle Colours: Select between neutral or traditional candle colors to match your analytical preferences.
When in strong trends, you can use the average table to determine when to look to get into a position. This example we are in a strong downtrend, we then see the histogram growing above the average in these conditions which is where we should look to get into a shorting position.
Strategic Applications
The AMACD serves not just as an indicator but as a comprehensive analytical tool for spotting market trends, momentum shifts, and potential reversal points. It's particularly useful for traders to:
Spot Momentum Changes Utilise dynamic coloring and streak tracking to alert shifts in momentum, helping anticipate market movements.
Identify Market Extremes Use high and low markers to spot potential market turning points, aiding in risk management and decision-making.
Alert Conditions
Above Average Movement Alerts: Triggered when the duration of the MACD histogram's growth or decline is unusually long, these alerts signal sustained momentum:
Above Zero: Alerts for both growing and declining movements above zero, indicating either continued bullish trends or potential bearish reversals.
Below Zero: Alerts for growth and decline below zero, pointing to potential bullish reversals or confirmed bearish trends.
High/Low Break Alerts: Activated when the histogram reaches new highs or falls to new lows beyond the set thresholds, these alerts are crucial for identifying shifts in market dynamics:
Break Above Last High: Indicates a potential upward trend as the histogram surpasses recent highs.
Break Below Last Low: Warns of a possible downward trend as the histogram drops below recent lows.
These alert conditions enable traders to automate part of their market monitoring or potential to automate the signals to take action elsewhere.
ka66: Swing/Pivot Point LinesThis indicator draws swing-highs and swing-lows, also called pivot highs and lows.
A swing high is a bar which has a higher-high than its surrounding bars (to the left and the right).
A swing low is a bar which has a lower-low than its surrounding bars (to the left and the right).
A common example of a pivot is Bill Williams' Fractal, which specifies that the centre bar must have a higher high than 2 bars to its left, and 2 bars to its right for a swing high, taking into account 5 bars at a time. Similarly, for a swing low, the centre bar must have a lower low than the 2 bars to its left and right.
This indicator allows configurable adjacent bars as input. Entering 2, means it essentially picks out a Williams Fractal. But you can select 1 (say for higher timeframes), using one 1 bar to the left and right of the centre bar.
The indicator will draw Swing/Pivot High/Low as circles at the same price level as the centre bar, till the next one shows up. Drawing is offset so it starts at the centre bar (the swing bar), showing exactly where the pivot bar is.
There are 2 main uses of pivot points, in various strategies:
Market Structure: to objectively define higher-highs/lows and lower-highs/lows in Trend Analysis.
More generally, to then determine if a trend might reverse, or continue as pivot levels are broken.
Messy pivot structures easily point out ranging markets.
There are a few of these, some closed source, which I don't like, since I think people should generally know what they are trading with, and I want to make sure I understand the logic exactly.
Channels With Patterns [ChartPrime]The Channels With Patterns indicator is an attempt at minimizing the delay in forming a trend channel. This indicator uses a single pivot in conjunction with a smooth version of the price to estimate the direction of an emerging trend. Using ATR, this indicator estimates the volatility of the new trend by adjusting the channel size by a multiple of the current ATR.
One of the biggest complains for any trend indicator is that it takes too long to create a channel or trend line. This indicator estimates the trend channel by checking if the price is moving in the correct direction and then it projects the channel from a single pivot. To allow for some margin of error, this script uses an offset to help center the channel.
This offset is generated from the ATR at the time of formation. In conjunction with forming estimated trend channels, this indicator features select candle stick patterns. These candle stick patterns are filtered by location in the formed trend channel. If the price is within an extremity of the trend channel it will appear. Filtering classical vanilla candle stick patterns using this methodology can result in some interesting results and possible confluence points for traders. For example; a bearish hammer appearing when filtered in an upper zone might add an extra level of realtime unique confluence traders.
Traders can use this script as a general trend line indicator that is a bit more forward looking than others, or it can be used it as its full blown trend channel estimator. Due to the fact that this is an estimate using the minimum possible information to make the channel, its accuracy will not always be perfect and can suffer compared to alternative methods.
When configuring the indicator it is important to understand the role of each input. Here is a description of all of the settings provided:
Presets (`preset`): This input allows users to quickly configure the indicator based on the market they are trading in. Selecting "Stocks," "Forex," or "Crypto" automatically adjusts various parameters to settings deemed optimal for these markets. The "User" option lets traders manually configure settings for a more personalized approach.
Style (`style`): This setting determines how pivot points are calculated. "Wick" uses the high and low of candlesticks (including wicks), which can be more sensitive to market extremes. "Body" uses only the open and close prices (the body of the candlesticks), potentially offering a more stable pivot point calculation.
Break Style (`break_style`): This option defines what price is used to determine if a channel has been broken. "Close" uses the closing price of a candlestick, while "High/Low" uses the highest and lowest prices. This affects how channel breaks are identified and can influence trading signals.
Instant Mode (`instant`): When enabled, this feature allows the indicator to form channels more quickly by initiating them as soon as potential formations are detected. This can provide earlier signals but may increase the risk of false positives.
ATR Length (`atr_length`): This input sets the period for the Average True Range (ATR), a common volatility indicator. A longer ATR period may smooth out the channel but could delay responsiveness to market changes. A shorter period might make the channel more responsive but potentially more erratic.
Offset Center (`offset`): Adjusts the vertical positioning of the channel. This can help in aligning the channel more accurately with the price action, depending on market conditions and personal trading strategies.
Size (`atr_multiplier`): Alters the channel's size relative to the ATR. A higher multiplier makes a wider channel, which might be useful in more volatile markets. A lower multiplier tightens the channel, which could be better for less volatile conditions.
Padding % (`padding`): This setting adjusts the padding within the top and bottom quarters of the channel. It essentially fine-tunes the channel's sensitivity to price movements near its boundaries.
Pivot Length (`pivot_length`): Determines the number of bars used to calculate pivot points. A longer length may provide more significant pivot points but can reduce the number of channels formed.
Pivot Look Forward (`look_forward`): Sets the number of bars to look forward in the pivot calculation, affecting how quickly the channel adapts to new pivots.
Average H/L Length (`avg_length`): Controls the smoothing of the high and low prices used in the channel calculation. A longer average length can lead to smoother, more gradual channel slopes.
Enable Hammer (`enable_hammer`): When enabled, the indicator will highlight Hammer candlestick patterns, which are often considered bullish reversal indicators.
Enable Inverted Hammer (`enable_ihammer`): This toggles the display of Inverted Hammer patterns, typically viewed as potential bullish reversal signals.
Enable Bullish Engulfing (`enable_bullish_engulfing`): Enables the identification of Bullish Engulfing patterns, another type of bullish reversal indicator.
Enable Bearish Engulfing (`enable_bearish_engulfing`): When activated, this highlights Bearish Engulfing patterns, which are often interpreted as bearish reversal signals.
Extend Channel (`extend`): This option, when enabled, extends the drawn channels forward until they are either broken or a new channel is formed.
Show Break Label (`show_break_label`): Toggles the display of labels indicating where the channel has been broken, providing visual cues for potential trade entries or exits.
Channel History Length (`history_length`): Determines how many historical channels are displayed on the chart. This can be useful for analyzing past performance and patterns.
Channel Colors (`top_color`, `bottom_color`, `center_color`): These settings allow customization of the channel's appearance by setting the colors of the top, bottom, and center lines.
Line Transparency (`line_trans`): Adjusts the transparency of the channel lines, helping to balance visibility with chart readability.
Center Line Transparency (`center_trans`): Specifically sets the transparency level of the center line of the channel.
Channel Fill Transparency (`fill_trans`): Modifies the transparency of the filled areas between the channel lines, which can enhance chart clarity and focus on the price action.
Break Colors (`break_up_color`, `break_down_color`): Sets the colors for labels that appear when the channel is broken, either upwards or downwards.
Break Label Text Color (`text_color`): Determines the color of the text in the break labels, enhancing readability based on the chart's background and color scheme.
Candle Pattern Colors (`h_color`, `ih_color`, `bullish_engulfing_color`, `bearish_engulfing_color`): These inputs allow for the customization of the colors used to highlight various candle patterns on the chart.
Candle Pattern Text Color (`candle_text_color`): Sets the color of the text for labels associated with candle pattern indicators.
Alerts (`new_channel_alert`, `break_alert`, `hammer_alert`, `ihammer_alert`, `bullish_engulfing_alert`, `bearish_engulfing_alert`): These toggles enable or disable alerts for different events, such as the formation of new channels, channel breaks, or the appearance of specific candle patterns. This feature is crucial for traders who rely on timely notifications for potential trading opportunities.
We have provided a few presets to allow you to get a feeling for how the indicator works with different settings easily. Here is a description of the settings used in each preset:
Stocks Preset:
Style: "Wick"
Break Style: False (High/Low)
Instant Mode: True
ATR Length: 10
Size (ATR Multiplier): 4
Pivot Length: 10
Pivot Look Forward: 15
Average H/L Length: 18
Forex Preset:
Style: "Wick"
Break Style: False (High/Low)
Instant Mode: True
ATR Length: 100
Size (ATR Multiplier): 5
Pivot Length: 10
Pivot Look Forward: 15
Average H/L Length: 18
Crypto Preset:
Style: "Wick"
Break Style: False (High/Low)
Instant Mode: True
ATR Length: 10
Size (ATR Multiplier): 4
Pivot Length: 10
Pivot Look Forward: 15
Average H/L Length: 18
This script first starts by defining and collecting the relevant data for the main body of the code with data(). This generates the pivot data, the levels, the ranges, the averages, the deltas, and finally the candle sticks. Once there is a higher low, or lower high detected via the pivots and the current price it triggers the formation of the new channel. It takes the delta between the last pivot and the current average price and projects the trend channel using this delta. If the price exceeds the extremities of the channel it will classify this as a break from the estimated structure and begin looking for a new channel. The idea is that when trending, the price will oscillate between extremities as defined by a range and direction. If the price is inside of one of these extremities the script will look for candle stick patterns. This is how the script operates.
On a more technical level, this script is meant to showcase Pine Script's custom types and methods. We have made use of a properties pattern allows functions to use a minimal number of arguments. This allows you to add new inputs without modifying a string of functions. The use of methods and data structures allows the main body of the code to be easy to understand and for the script as a whole to be easily modified. We have made sure that the script is modular so that users can incorporate this into their own custom scripts. It should be easy to expand on this script as the main logic is fairly compact and open for easy modification. All features are packed into their own function for easy use elsewhere. This is particularly evident in the candle stick section. I have simplified the process of creating candle stick patterns by creating a type. All users have to do is make methods for this type.
candle()=>
polarity = open < close
body_top = math.max(open, close)
body_bottom = math.min(open, close)
body_range = body_top - body_bottom
top_wick = high - body_top
bottom_wick = body_bottom - low
average_body = ta.ema(body_range, 14)
average_top_wick = ta.ema(top_wick, 14)
average_bottom_wick = ta.ema(bottom_wick, 14)
has_body = body_range != 0
has_top_wick = top_wick != 0
has_bottom_wick = bottom_wick != 0
above_average_body = body_range > average_body
above_average_top_wick = top_wick > average_top_wick
above_average_bottom_wick = bottom_wick > average_bottom_wick
candle_data.new(
polarity
, body_top
, body_bottom
, body_range
, top_wick
, bottom_wick
, average_body
, average_top_wick
, average_bottom_wick
, has_body
, has_top_wick
, has_bottom_wick
, above_average_body
, above_average_top_wick
, above_average_bottom_wick
)
In conclusion, this script offers a blend of rapid trend channel formation and candlestick pattern recognition, making it a unique tool for traders looking for a more proactive approach to trend analysis.
Supertrend Advance Pullback StrategyHandbook for the Supertrend Advance Strategy
1. Introduction
Purpose of the Handbook:
The main purpose of this handbook is to serve as a comprehensive guide for traders and investors who are looking to explore and harness the potential of the Supertrend Advance Strategy. In the rapidly changing financial market, having the right tools and strategies at one's disposal is crucial. Whether you're a beginner hoping to dive into the world of trading or a seasoned investor aiming to optimize and diversify your portfolio, this handbook offers the insights and methodologies you need. By the end of this guide, readers should have a clear understanding of how the Supertrend Advance Strategy works, its benefits, potential pitfalls, and practical application in various trading scenarios.
Overview of the Supertrend Advance Pullback Strategy:
At its core, the Supertrend Advance Strategy is an evolution of the popular Supertrend Indicator. Designed to generate buy and sell signals in trending markets, the Supertrend Indicator has been a favorite tool for many traders around the world. The Advance Strategy, however, builds upon this foundation by introducing enhanced mechanisms, filters, and methodologies to increase precision and reduce false signals.
1. Basic Concept:
The Supertrend Advance Strategy relies on a combination of price action and volatility to determine the potential trend direction. By assessing the average true range (ATR) in conjunction with specific price points, this strategy aims to highlight the potential starting and ending points of market trends.
2. Methodology:
Unlike the traditional Supertrend Indicator, which primarily focuses on closing prices and ATR, the Advance Strategy integrates other critical market variables, such as volume, momentum oscillators, and perhaps even fundamental data, to validate its signals. This multidimensional approach ensures that the generated signals are more reliable and are less prone to market noise.
3. Benefits:
One of the main benefits of the Supertrend Advance Strategy is its ability to filter out false breakouts and minor price fluctuations, which can often lead to premature exits or entries in the market. By waiting for a confluence of factors to align, traders using this advanced strategy can increase their chances of entering or exiting trades at optimal points.
4. Practical Applications:
The Supertrend Advance Strategy can be applied across various timeframes, from intraday trading to swing trading and even long-term investment scenarios. Furthermore, its flexible nature allows it to be tailored to different asset classes, be it stocks, commodities, forex, or cryptocurrencies.
In the subsequent sections of this handbook, we will delve deeper into the intricacies of this strategy, offering step-by-step guidelines on its application, case studies, and tips for maximizing its efficacy in the volatile world of trading.
As you journey through this handbook, we encourage you to approach the Supertrend Advance Strategy with an open mind, testing and tweaking it as per your personal trading style and risk appetite. The ultimate goal is not just to provide you with a new tool but to empower you with a holistic strategy that can enhance your trading endeavors.
2. Getting Started
Navigating the financial markets can be a daunting task without the right tools. This section is dedicated to helping you set up the Supertrend Advance Strategy on one of the most popular charting platforms, TradingView. By following the steps below, you'll be able to integrate this strategy into your charts and start leveraging its insights in no time.
Setting up on TradingView:
TradingView is a web-based platform that offers a wide range of charting tools, social networking, and market data. Before you can apply the Supertrend Advance Strategy, you'll first need a TradingView account. If you haven't set one up yet, here's how:
1. Account Creation:
• Visit TradingView's official website.
• Click on the "Join for free" or "Sign up" button.
• Follow the registration process, providing the necessary details and setting up your login credentials.
2. Navigating the Dashboard:
• Once logged in, you'll be taken to your dashboard. Here, you'll see a variety of tools, including watchlists, alerts, and the main charting window.
• To begin charting, type in the name or ticker of the asset you're interested in the search bar at the top.
3. Configuring Chart Settings:
• Before integrating the Supertrend Advance Strategy, familiarize yourself with the chart settings. This can be accessed by clicking the 'gear' icon on the top right of the chart window.
• Adjust the chart type, time intervals, and other display settings to your preference.
Integrating the Strategy into a Chart:
Now that you're set up on TradingView, it's time to integrate the Supertrend Advance Strategy.
1. Accessing the Pine Script Editor:
• Located at the top-center of your screen, you'll find the "Pine Editor" tab. Click on it.
• This is where custom strategies and indicators are scripted or imported.
2. Loading the Supertrend Advance Strategy Script:
• Depending on whether you have the script or need to find it, there are two paths:
• If you have the script: Copy the Supertrend Advance Strategy script, and then paste it into the Pine Editor.
• If searching for the script: Click on the “Indicators” icon (looks like a flame) at the top of your screen, and then type “Supertrend Advance Strategy” in the search bar. If available, it will show up in the list. Simply click to add it to your chart.
3. Applying the Strategy:
• After pasting or selecting the Supertrend Advance Strategy in the Pine Editor, click on the “Add to Chart” button located at the top of the editor. This will overlay the strategy onto your main chart window.
4. Configuring Strategy Settings:
• Once the strategy is on your chart, you'll notice a small settings ('gear') icon next to its name in the top-left of the chart window. Click on this to access settings.
• Here, you can adjust various parameters of the Supertrend Advance Strategy to better fit your trading style or the specific asset you're analyzing.
5. Interpreting Signals:
• With the strategy applied, you'll now see buy/sell signals represented on your chart. Take time to familiarize yourself with how these look and behave over various timeframes and market conditions.
3. Strategy Overview
What is the Supertrend Advance Strategy?
The Supertrend Advance Strategy is a refined version of the classic Supertrend Indicator, which was developed to aid traders in spotting market trends. The strategy utilizes a combination of data points, including average true range (ATR) and price momentum, to generate buy and sell signals.
In essence, the Supertrend Advance Strategy can be visualized as a line that moves with the price. When the price is above the Supertrend line, it indicates an uptrend and suggests a potential buy position. Conversely, when the price is below the Supertrend line, it hints at a downtrend, suggesting a potential selling point.
Strategy Goals and Objectives:
1. Trend Identification: At the core of the Supertrend Advance Strategy is the goal to efficiently and consistently identify prevailing market trends. By recognizing these trends, traders can position themselves to capitalize on price movements in their favor.
2. Reducing Noise: Financial markets are often inundated with 'noise' - short-term price fluctuations that can mislead traders. The Supertrend Advance Strategy aims to filter out this noise, allowing for clearer decision-making.
3. Enhancing Risk Management: With clear buy and sell signals, traders can set more precise stop-loss and take-profit points. This leads to better risk management and potentially improved profitability.
4. Versatility: While primarily used for trend identification, the strategy can be integrated with other technical tools and indicators to create a comprehensive trading system.
Type of Assets/Markets to Apply the Strategy:
1. Equities: The Supertrend Advance Strategy is highly popular among stock traders. Its ability to capture long-term trends makes it particularly useful for those trading individual stocks or equity indices.
2. Forex: Given the 24-hour nature of the Forex market and its propensity for trends, the Supertrend Advance Strategy is a valuable tool for currency traders.
3. Commodities: Whether it's gold, oil, or agricultural products, commodities often move in extended trends. The strategy can help in identifying and capitalizing on these movements.
4. Cryptocurrencies: The volatile nature of cryptocurrencies means they can have pronounced trends. The Supertrend Advance Strategy can aid crypto traders in navigating these often tumultuous waters.
5. Futures & Options: Traders and investors in derivative markets can utilize the strategy to make more informed decisions about contract entries and exits.
It's important to note that while the Supertrend Advance Strategy can be applied across various assets and markets, its effectiveness might vary based on market conditions, timeframe, and the specific characteristics of the asset in question. As always, it's recommended to use the strategy in conjunction with other analytical tools and to backtest its effectiveness in specific scenarios before committing to trades.
4. Input Settings
Understanding and correctly configuring input settings is crucial for optimizing the Supertrend Advance Strategy for any specific market or asset. These settings, when tweaked correctly, can drastically impact the strategy's performance.
Grouping Inputs:
Before diving into individual input settings, it's important to group similar inputs. Grouping can simplify the user interface, making it easier to adjust settings related to a specific function or indicator.
Strategy Choice:
This input allows traders to select from various strategies that incorporate the Supertrend indicator. Options might include "Supertrend with RSI," "Supertrend with MACD," etc. By choosing a strategy, the associated input settings for that strategy become available.
Supertrend Settings:
1. Multiplier: Typically, a default value of 3 is used. This multiplier is used in the ATR calculation. Increasing it makes the Supertrend line further from prices, while decreasing it brings the line closer.
2. Period: The number of bars used in the ATR calculation. A common default is 7.
EMA Settings (Exponential Moving Average):
1. Period: Defines the number of previous bars used to calculate the EMA. Common periods are 9, 21, 50, and 200.
2. Source: Allows traders to choose which price (Open, Close, High, Low) to use in the EMA calculation.
RSI Settings (Relative Strength Index):
1. Length: Determines how many periods are used for RSI calculation. The standard setting is 14.
2. Overbought Level: The threshold at which the asset is considered overbought, typically set at 70.
3. Oversold Level: The threshold at which the asset is considered oversold, often at 30.
MACD Settings (Moving Average Convergence Divergence):
1. Short Period: The shorter EMA, usually set to 12.
2. Long Period: The longer EMA, commonly set to 26.
3. Signal Period: Defines the EMA of the MACD line, typically set at 9.
CCI Settings (Commodity Channel Index):
1. Period: The number of bars used in the CCI calculation, often set to 20.
2. Overbought Level: Typically set at +100, denoting overbought conditions.
3. Oversold Level: Usually set at -100, indicating oversold conditions.
SL/TP Settings (Stop Loss/Take Profit):
1. SL Multiplier: Defines the multiplier for the average true range (ATR) to set the stop loss.
2. TP Multiplier: Defines the multiplier for the average true range (ATR) to set the take profit.
Filtering Conditions:
This section allows traders to set conditions to filter out certain signals. For example, one might only want to take buy signals when the RSI is below 30, ensuring they buy during oversold conditions.
Trade Direction and Backtest Period:
1. Trade Direction: Allows traders to specify whether they want to take long trades, short trades, or both.
2. Backtest Period: Specifies the time range for backtesting the strategy. Traders can choose from options like 'Last 6 months,' 'Last 1 year,' etc.
It's essential to remember that while default settings are provided for many of these tools, optimal settings can vary based on the market, timeframe, and trading style. Always backtest new settings on historical data to gauge their potential efficacy.
5. Understanding Strategy Conditions
Developing an understanding of the conditions set within a trading strategy is essential for traders to maximize its potential. Here, we delve deep into the logic behind these conditions, using the Supertrend Advance Strategy as our focal point.
Basic Logic Behind Conditions:
Every strategy is built around a set of conditions that provide buy or sell signals. The conditions are based on mathematical or statistical methods and are rooted in the study of historical price data. The fundamental idea is to recognize patterns or behaviors that have been profitable in the past and might be profitable in the future.
Buy and Sell Conditions:
1. Buy Conditions: Usually formulated around bullish signals or indicators suggesting upward price momentum.
2. Sell Conditions: Centered on bearish signals or indicators indicating downward price momentum.
Simple Strategy:
The simple strategy could involve using just the Supertrend indicator. Here:
• Buy: When price closes above the Supertrend line.
• Sell: When price closes below the Supertrend line.
Pullback Strategy:
This strategy capitalizes on price retracements:
• Buy: When the price retraces to the Supertrend line after a bullish signal and is supported by another bullish indicator.
• Sell: When the price retraces to the Supertrend line after a bearish signal and is confirmed by another bearish indicator.
Indicators Used:
EMA (Exponential Moving Average):
• Logic: EMA gives more weight to recent prices, making it more responsive to current price movements. A shorter-period EMA crossing above a longer-period EMA can be a bullish sign, while the opposite is bearish.
RSI (Relative Strength Index):
• Logic: RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions. Values above 70 are typically considered overbought, and values below 30 are considered oversold.
MACD (Moving Average Convergence Divergence):
• Logic: MACD assesses the relationship between two EMAs of a security’s price. The MACD line crossing above the signal line can be a bullish signal, while crossing below can be bearish.
CCI (Commodity Channel Index):
• Logic: CCI compares a security's average price change with its average price variation. A CCI value above +100 may mean the price is overbought, while below -100 might signify an oversold condition.
And others...
As the strategy expands or contracts, more indicators might be added or removed. The crucial point is to understand the core logic behind each, ensuring they align with the strategy's objectives.
Logic Behind Each Indicator:
1. EMA: Emphasizes recent price movements; provides dynamic support and resistance levels.
2. RSI: Indicates overbought and oversold conditions based on recent price changes.
3. MACD: Showcases momentum and direction of a trend by comparing two EMAs.
4. CCI: Measures the difference between a security's price change and its average price change.
Understanding strategy conditions is not just about knowing when to buy or sell but also about comprehending the underlying market dynamics that those conditions represent. As you familiarize yourself with each condition and indicator, you'll be better prepared to adapt and evolve with the ever-changing financial markets.
6. Trade Execution and Management
Trade execution and management are crucial aspects of any trading strategy. Efficient execution can significantly impact profitability, while effective management can preserve capital during adverse market conditions. In this section, we'll explore the nuances of position entry, exit strategies, and various Stop Loss (SL) and Take Profit (TP) methodologies within the Supertrend Advance Strategy.
Position Entry:
Effective trade entry revolves around:
1. Timing: Enter at a point where the risk-reward ratio is favorable. This often corresponds to confirmatory signals from multiple indicators.
2. Volume Analysis: Ensure there's adequate volume to support the movement. Volume can validate the strength of a signal.
3. Confirmation: Use multiple indicators or chart patterns to confirm the entry point. For instance, a buy signal from the Supertrend indicator can be confirmed with a bullish MACD crossover.
Position Exit Strategies:
A successful exit strategy will lock in profits and minimize losses. Here are some strategies:
1. Fixed Time Exit: Exiting after a predetermined period.
2. Percentage-based Profit Target: Exiting after a certain percentage gain.
3. Indicator-based Exit: Exiting when an indicator gives an opposing signal.
Percentage-based SL/TP:
• Stop Loss (SL): Set a fixed percentage below the entry price to limit potential losses.
• Example: A 2% SL on an entry at $100 would trigger a sell at $98.
• Take Profit (TP): Set a fixed percentage above the entry price to lock in gains.
• Example: A 5% TP on an entry at $100 would trigger a sell at $105.
Supertrend-based SL/TP:
• Stop Loss (SL): Position the SL at the Supertrend line. If the price breaches this line, it could indicate a trend reversal.
• Take Profit (TP): One could set the TP at a point where the Supertrend line flattens or turns, indicating a possible slowdown in momentum.
Swing high/low-based SL/TP:
• Stop Loss (SL): For a long position, set the SL just below the recent swing low. For a short position, set it just above the recent swing high.
• Take Profit (TP): For a long position, set the TP near a recent swing high or resistance. For a short position, near a swing low or support.
And other methods...
1. Trailing Stop Loss: This dynamic SL adjusts with the price movement, locking in profits as the trade moves in your favor.
2. Multiple Take Profits: Divide the position into segments and set multiple TP levels, securing profits in stages.
3. Opposite Signal Exit: Exit when another reliable indicator gives an opposite signal.
Trade execution and management are as much an art as they are a science. They require a blend of analytical skill, discipline, and intuition. Regularly reviewing and refining your strategies, especially in light of changing market conditions, is crucial to maintaining consistent trading performance.
7. Visual Representations
Visual tools are essential for traders, as they simplify complex data into an easily interpretable format. Properly analyzing and understanding the plots on a chart can provide actionable insights and a more intuitive grasp of market conditions. In this section, we’ll delve into various visual representations used in the Supertrend Advance Strategy and their significance.
Understanding Plots on the Chart:
Charts are the primary visual aids for traders. The arrangement of data points, lines, and colors on them tell a story about the market's past, present, and potential future moves.
1. Data Points: These represent individual price actions over a specific timeframe. For instance, a daily chart will have data points showing the opening, closing, high, and low prices for each day.
2. Colors: Used to indicate the nature of price movement. Commonly, green is used for bullish (upward) moves and red for bearish (downward) moves.
Trend Lines:
Trend lines are straight lines drawn on a chart that connect a series of price points. Their significance:
1. Uptrend Line: Drawn along the lows, representing support. A break below might indicate a trend reversal.
2. Downtrend Line: Drawn along the highs, indicating resistance. A break above might suggest the start of a bullish trend.
Filled Areas:
These represent a range between two values on a chart, usually shaded or colored. For instance:
1. Bollinger Bands: The area between the upper and lower band is filled, giving a visual representation of volatility.
2. Volume Profile: Can show a filled area representing the amount of trading activity at different price levels.
Stop Loss and Take Profit Lines:
These are horizontal lines representing pre-determined exit points for trades.
1. Stop Loss Line: Indicates the level at which a trade will be automatically closed to limit losses. Positioned according to the trader's risk tolerance.
2. Take Profit Line: Denotes the target level to lock in profits. Set according to potential resistance (for long trades) or support (for short trades) or other technical factors.
Trailing Stop Lines:
A trailing stop is a dynamic form of stop loss that moves with the price. On a chart:
1. For Long Trades: Starts below the entry price and moves up with the price but remains static if the price falls, ensuring profits are locked in.
2. For Short Trades: Starts above the entry price and moves down with the price but remains static if the price rises.
Visual representations offer traders a clear, organized view of market dynamics. Familiarity with these tools ensures that traders can quickly and accurately interpret chart data, leading to more informed decision-making. Always ensure that the visual aids used resonate with your trading style and strategy for the best results.
8. Backtesting
Backtesting is a fundamental process in strategy development, enabling traders to evaluate the efficacy of their strategy using historical data. It provides a snapshot of how the strategy would have performed in past market conditions, offering insights into its potential strengths and vulnerabilities. In this section, we'll explore the intricacies of setting up and analyzing backtest results and the caveats one must be aware of.
Setting Up Backtest Period:
1. Duration: Determine the timeframe for the backtest. It should be long enough to capture various market conditions (bullish, bearish, sideways). For instance, if you're testing a daily strategy, consider a period of several years.
2. Data Quality: Ensure the data source is reliable, offering high-resolution and clean data. This is vital to get accurate backtest results.
3. Segmentation: Instead of a continuous period, sometimes it's helpful to backtest over distinct market phases, like a particular bear or bull market, to see how the strategy holds up in different environments.
Analyzing Backtest Results:
1. Performance Metrics: Examine metrics like the total return, annualized return, maximum drawdown, Sharpe ratio, and others to gauge the strategy's efficiency.
2. Win Rate: It's the ratio of winning trades to total trades. A high win rate doesn't always signify a good strategy; it should be evaluated in conjunction with other metrics.
3. Risk/Reward: Understand the average profit versus the average loss per trade. A strategy might have a low win rate but still be profitable if the average gain far exceeds the average loss.
4. Drawdown Analysis: Review the periods of losses the strategy could incur and how long it takes, on average, to recover.
9. Tips and Best Practices
Successful trading requires more than just knowing how a strategy works. It necessitates an understanding of when to apply it, how to adjust it to varying market conditions, and the wisdom to recognize and avoid common pitfalls. This section offers insightful tips and best practices to enhance the application of the Supertrend Advance Strategy.
When to Use the Strategy:
1. Market Conditions: Ideally, employ the Supertrend Advance Strategy during trending market conditions. This strategy thrives when there are clear upward or downward trends. It might be less effective during consolidative or sideways markets.
2. News Events: Be cautious around significant news events, as they can cause extreme volatility. It might be wise to avoid trading immediately before and after high-impact news.
3. Liquidity: Ensure you are trading in assets/markets with sufficient liquidity. High liquidity ensures that the price movements are more reflective of genuine market sentiment and not due to thin volume.
Adjusting Settings for Different Markets/Timeframes:
1. Markets: Each market (stocks, forex, commodities) has its own characteristics. It's essential to adjust the strategy's parameters to align with the market's volatility and liquidity.
2. Timeframes: Shorter timeframes (like 1-minute or 5-minute charts) tend to have more noise. You might need to adjust the settings to filter out false signals. Conversely, for longer timeframes (like daily or weekly charts), you might need to be more responsive to genuine trend changes.
3. Customization: Regularly review and tweak the strategy's settings. Periodic adjustments can ensure the strategy remains optimized for the current market conditions.
10. Frequently Asked Questions (FAQs)
Given the complexities and nuances of the Supertrend Advance Strategy, it's only natural for traders, both new and seasoned, to have questions. This section addresses some of the most commonly asked questions regarding the strategy.
1. What exactly is the Supertrend Advance Strategy?
The Supertrend Advance Strategy is an evolved version of the traditional Supertrend indicator. It's designed to provide clearer buy and sell signals by incorporating additional indicators like EMA, RSI, MACD, CCI, etc. The strategy aims to capitalize on market trends while minimizing false signals.
2. Can I use the Supertrend Advance Strategy for all asset types?
Yes, the strategy can be applied to various asset types like stocks, forex, commodities, and cryptocurrencies. However, it's crucial to adjust the settings accordingly to suit the specific characteristics and volatility of each asset type.
3. Is this strategy suitable for day trading?
Absolutely! The Supertrend Advance Strategy can be adjusted to suit various timeframes, making it versatile for both day trading and long-term trading. Remember to fine-tune the settings to align with the timeframe you're trading on.
4. How do I deal with false signals?
No strategy is immune to false signals. However, by combining the Supertrend with other indicators and adhering to strict risk management protocols, you can minimize the impact of false signals. Always use stop-loss orders and consider filtering trades with additional confirmation signals.
5. Do I need any prior trading experience to use this strategy?
While the Supertrend Advance Strategy is designed to be user-friendly, having a foundational understanding of trading and market analysis can greatly enhance your ability to employ the strategy effectively. If you're a beginner, consider pairing the strategy with further education and practice on demo accounts.
6. How often should I review and adjust the strategy settings?
There's no one-size-fits-all answer. Some traders adjust settings weekly, while others might do it monthly. The key is to remain responsive to changing market conditions. Regular backtesting can give insights into potential required adjustments.
7. Can the Supertrend Advance Strategy be automated?
Yes, many traders use algorithmic trading platforms to automate their strategies, including the Supertrend Advance Strategy. However, always monitor automated systems regularly to ensure they're operating as intended.
8. Are there any markets or conditions where the strategy shouldn't be used?
The strategy might generate more false signals in markets that are consolidative or range-bound. During significant news events or times of unexpected high volatility, it's advisable to tread with caution or stay out of the market.
9. How important is backtesting with this strategy?
Backtesting is crucial as it allows traders to understand how the strategy would have performed in the past, offering insights into potential profitability and areas of improvement. Always backtest any new setting or tweak before applying it to live trades.
10. What if the strategy isn't working for me?
No strategy guarantees consistent profits. If it's not working for you, consider reviewing your settings, seeking expert advice, or complementing the Supertrend Advance Strategy with other analysis methods. Remember, continuous learning and adaptation are the keys to trading success.
Other comments
Value of combining several indicators in this script and how they work together
Diversification of Signals: Just as diversifying an investment portfolio can reduce risk, using multiple indicators can offer varied perspectives on potential price movements. Each indicator can capture a different facet of the market, ensuring that traders are not overly reliant on a single data point.
Confirmation & Reduced False Signals: A common challenge with many indicators is the potential for false signals. By requiring confirmation from multiple indicators before acting, the chances of acting on a false signal can be significantly reduced.
Flexibility Across Market Conditions: Different indicators might perform better under different market conditions. For example, while moving averages might excel in trending markets, oscillators like RSI might be more useful during sideways or range-bound conditions. A mashup strategy can potentially adapt better to varying market scenarios.
Comprehensive Analysis: With multiple indicators, traders can gauge trend strength, momentum, volatility, and potential market reversals all at once, providing a holistic view of the market.
How do the different indicators in the Supertrend Advance Strategy work together?
Supertrend: This is primarily a trend-following indicator. It provides traders with buy and sell signals based on the volatility of the price. When combined with other indicators, it can filter out noise and give more weight to strong, confirmed trends.
EMA (Exponential Moving Average): EMA gives more weight to recent price data. It can be used to identify the direction and strength of a trend. When the price is above the EMA, it's generally considered bullish, and vice versa.
RSI (Relative Strength Index): An oscillator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions. By cross-referencing with other indicators like EMA or MACD, traders can spot potential reversals or confirmations of a trend.
MACD (Moving Average Convergence Divergence): This indicator identifies changes in the strength, direction, momentum, and duration of a trend in a stock's price. When the MACD line crosses above the signal line, it can be a bullish sign, and when it crosses below, it can be bearish. Pairing MACD with Supertrend can provide dual confirmation of a trend.
CCI (Commodity Channel Index): Initially developed for commodities, CCI can indicate overbought or oversold conditions. It can be used in conjunction with other indicators to determine entry and exit points.
In essence, the synergy of these indicators provides a balanced, comprehensive approach to trading. Each indicator offers its unique lens into market conditions, and when they align, it can be a powerful indication of a trading opportunity. This combination not only reduces the potential drawbacks of each individual indicator but leverages their strengths, aiming for more consistent and informed trading decisions.
Backtesting and Default Settings
• This indicator has been optimized to be applied for 1 hour-charts. However, the underlying principles of this strategy are supply and demand in the financial markets and the strategy can be applied to all timeframes. Daytraders can use the 1min- or 5min charts, swing-traders can use the daily charts.
• This strategy has been designed to identify the most promising, highest probability entries and trades for each stock or other financial security.
• The combination of the qualifiers results in a highly selective strategy which only considers the most promising swing-trading entries. As a result, you will normally only find a low number of trades for each stock or other financial security per year in case you apply this strategy for the daily charts. Shorter timeframes will result in a higher number of trades / year.
• Consequently, traders need to apply this strategy for a full watchlist rather than just one financial security.
• Default properties: RSI on (length 14, RSI buy level 50, sell level 50), EMA, RSI, MACD on, type of strategy pullback, SL/TP type: ATR (length 10, factor 3), trade direction both, quantity 5, take profit swing hl 5.1, highest / lowest lookback 2, enable ATR trail (ATR length 10, SL ATR multiplier 1.4, TP multiplier 2.1, lookback = 4, trade direction = both).
Euclidean Distance Predictive Candles [SS]Finally releasing this, its been in the works for the past 2 weeks and has undergone many iterations.
I am not sure if I am 100% happy with it yet, but I guess its best to release and get feedback to make improvements.
So this is the Euclidean distance predictive candle indicator and what it does is exactly what it sounds like, it uses Euclidean distance to identify similar candles and then plot the candles and range that immediately proceeded like candles.
While this is using a general machine learning/data science approach (Euclidean distance), I do not employ the KNN (Nearest Neighbors) algo into this. The reason being is it simply offered no predictive advantage than isolating for the last case. I tried it, I didn't like it, the results were not improve and, at times, acutally hindered so I ditched it. Perhaps it was my approach but using some other KNN indicators, I just don't really find them all that more advantageous to simply relying on the Law of Large Numbers and collecting more data rather than less data (which we will get into later in this explanation).
So using this indicator:
There is a lot of customizability here. And the reason is, not all settings are going to work the same for all tickers. To help you narrow down your parameters, I have included various backtest results that show you how the model is performing. You see in the AMZN chart above, with the current settings, it is performing optimally, with a cumulative range pass of 99% (meaning that, of all the cases, the indicator accurately predicted the next day high OR low range 99% of the time), and the ability to predict the candle slightly over 52%.
The recommended settings, from me, are as follows:
So these are generally my recommended settings.
Euclidian Tolerance: This will determine the parameters to look for similar candles. In general, the lower the tolerance, the greater the precision. I recommend keeping it between 0.5, for tickers with larger prices (like ES1! futures or NQ1!) or 0.05 for tickers with lower TPs, like SPY or QQQ.
If the ED Tolerance is too extreme that the indicator cannot find identical setups, it will alert you:
But in general, the more precise you can get it, the better.
Anchor Type: You will see the option to anchor by "Predicted Open" or by "Previous Close". I suggest sticking with anchoring by predicted open. All this means is, it is going to anchor your range, candle, high and low targets by the predicted open price. Anchoring by previous close will anchor by the close of yesterday. Both work okay, but in general the results from anchoring to predicted open have higher pass rates and more accurately depict the candle.
Euclidean Distance Measurement Type: You can choose to measure by candle body or from high to low wicks. I haven't played around with measuring from high to low wicks all that much, because candle body tends to do the job. But remember, ED is a neutral measurement. Which means, its not going to distinguish between a red or green candle, just the formation of the candle. Thus, I tend to recommend, pragmatically, not to necessarily rely on the candle being red or green, but one the formation of the candle (where are the wicks going, are there more bearish wicks or bullish wicks) etc. Examples will follow.
Range Prediction Type: You can filter the range prediction type by last instance (in which, it will pull the previous identical candle and plot the next candle that followed it, adjusted for the current ranges) or "Average of All Cases". So this is where we need to talk a little bit about the law of large numbers.
In general, in statistics, when you have a huge amount of random data, the law of large numbers stipulates that, within this randomness should be repeated events. This is why sometimes chart patterns work, sometimes they don't. When we filter by the average of all cases, we are relying on the law of large numbers. In general, if you are getting good Backtest readings from Last Instance, then you don't need to use this function. But it provides an alternative insight into potential candle formations next day. Its not a bad idea to compare between the two and look for similarities and differences.
So now that we have covered the boring details, let's get into how to use the indicator and some examples.
So the indicator is plotting the range and candle for the next day. As such, we are not looking at the current candle being plotted, but we are looking at the previous candle (see image below for example):
The green arrow shows the prediction for Friday, along with the corresponding result. The purple arrow shows the prediction for Monday which we have yet to realize.
So remember when you are using this, you need to look at the previous candle, and not the candle that it is currently plotting with realtime data, because it is plotting for the next candle.
If you are plotting by last instance, the indicator will tell you which day it is pulling its data from if you have opted to toggle on the demographic data:
You can see the green arrow pointing to the date where it is pulling from. This data serves as the example candle with the candle proceeding this date being the anchored candle (or the predicted candle).
Price Targets and Probability:
In the chart, you can see the green arrow pointing to the green portion of the table. In this table, it will give you the current TPs. These represent the current time target price, which means, the TPs shown here are for Friday. On Monday, the table will update with the TPs for Monday, etc. If you want to view the TPs in advance, you can view them from the actual candle itself.
Below the TPs, you see a bullish 7:6. It means, in a total of 13 cases, the next candle was bullish 7 times and bearish 6 times. Where do we see the number of cases? In the demographic table as well:
Auxiliary functions
Because you are using the previous candle, if you want to avoid confusion, you can have the indicator plot the price targets over the predicted candle, to anchor your attention so to speak. Simply select "Label" in the "Show Price Targets" section, which will look like this:
You can also ask the indicator to plot the demographic data of Higher High, Low, etc. information. What this does is simply looks at all the cases and plots how many times higher highs, lows, lower lows, highs etc. were made:
This will just count all of the cases identified and plot the number of times higher highs, lows, etc. were made.
Concluding Remarks
This is a kind of complex indicator and I can appreciate it may take some getting used to.
I will try to post a tutorial video at some point next week for it, so stay tuned for that.
But this isn't designed to make your life more complicated, just to help give you insights into potential outcomes for the next day or hour or 5 minute (it can be used on all timeframes).
If you find it helpful, great! If not, that's okay, too :-).
Please be aware, this is not my forte of indicators. I am not a data scientist or programmer. My background is in Epi and we don't use these types of data science approaches, so if you have any suggestions or critiques, feel free to share them below.
Otherwise, I hope you enjoy!
Take care everyone and safe trades!
Intraday Intensity Index [SyntaxGeek]Intraday Intensity Index
This is a volume-based technical indicator that integrates volume with a security’s price. Use this to follow how intraday highs and lows are moving with volume.
The Intraday Intensity Index was developed by Dave Bostian.
It is one of several indicators that can be used to follow how volume is influencing a security’s price. It provides a continuous volume-focused indicator by using a security’s most recent close, high and low in its calculation while also factoring in volume.
I've searched high and low for the correct implementation of this measure and I can only find it buried within old books or in PineScript's own ta.iii, but no one has provided it as a histogram indicator correctly.
The main difference I can find is that most are not restricting volumes influence to the denominator solely, which is how Dave designed it.
For illustration the correct implementation is:
(2 * close - high - low) / ((high - low) * volume)
Such a simple change but compare to many other indicators that claim to implement the measure and it's easy to see the difference.
I also provided a high/low mode that aims to ease comparison to Bollinger Bands which is something that John Bollinger references when utilizing III.
Setting III to 20 trend and high/low mode can present similar areas of extreme breaks to the high or low and may be great entries for trades but you must complete your own analysis.
YinYang RSI Volume Trend StrategyThere are many strategies that use RSI or Volume but very few that take advantage of how useful and important the two of them combined are. This strategy uses the Highs and Lows with Volume and RSI weighted calculations on top of them. You may be wondering how much of an impact Volume and RSI can have on the prices; the answer is a lot and we will discuss those with plenty of examples below, but first…
How does this strategy work?
It’s simple really, when the purchase source crosses above the inner low band (red) it creates a Buy or Long. This long has a Trailing Stop Loss band (the outer low band that's also red) that can be adjusted in the Settings. The Stop Loss is based on a % of the inner low band’s price and by default it is 0.1% lower than the inner band’s price. This Stop Loss is not only a stop loss but it can also act as a Purchase Available location.
You can get back into a trade after a stop loss / take profit has been hit when your Reset Purchase Availability After condition has been met. This can either be at Stop Loss, Entry or None.
It is advised to allow it to reset in case the stop loss was a fake out but the call was right. Sometimes it may trigger stop loss multiple times in a row, but you don’t lose much on stop loss and you gain lots when the call is right.
The Take Profit location is the basis line (white). Take Profit occurs when the Exit Source (close, open, high, low or other) crosses the basis line and then on a different bar the Exit Source crosses back over the basis line. For example, if it was a Long and the bar’s Exit Source closed above the basis line, and then 2 bars later its Exit Source closed below the basis line, Take Profit would occur. You can disable Take Profit in Settings, but it is very useful as many times the price will cross the Basis and then correct back rather than making it all the way to the opposing zone.
Longs:
If for instance your Long doesn’t need to Take Profit and instead reaches the top zone, it will close the position when it crosses above the inner top line (green).
Please note you can change the Exit Source too which is what source (close, open, high, low) it uses to end the trades.
The Shorts work the same way as the Long but just opposite, they start when the purchase source crosses under the inner upper band (green).
Shorts:
Shorts take profit when it crosses under the basis line and then crosses back.
Shorts will Stop loss when their outer upper band (green) is crossed with the Exit Source.
Short trades are completed and closed when its Exit Source crosses under the inner low red band.
So, now that you understand how the strategy works, let’s discuss why this strategy works and how it is profitable.
First we will discuss Volume as we deem it plays a much bigger role overall and in our strategy:
As I’m sure many of you know, Volume plays a huge factor in how much something moves, but it also plays a role in the strength of the movement. For instance, let’s look at two scenarios:
Bitcoin’s price goes up $1000 in 1 Day but the Volume was only 10 million
Bitcoin’s price goes up $200 in 1 Day but the Volume was 40 million
If you were to only look at the price, you’d say #1 was more important because the price moved x5 the amount as #2, but once you factor in the volume, you know this is not true. The reason why Volume plays such a huge role in Price movement is because it shows there is a large Limit Order battle going on. It means that both Bears and Bulls believe that price is a good time to Buy and Sell. This creates a strong Support and Resistance price point in this location. If we look at scenario #2, when there is high volume, especially if it is drastically larger than the average volume Bitcoin was displaying recently, what can we decipher from this? Well, the biggest take away is that the Bull’s won the battle, and that likely when that happens we will see bullish movement continuing to happen as most of the Bears Limit Orders have been fulfilled. Whereas with #2, when large price movement happens and Bitcoin goes up $1000 with low volume what can we deduce? The main takeaway is that Bull’s pressured the price up with Market Orders where they purchased the best available price, also what this means is there were very few people who were wanting to sell. This generally dictates that Whale Limit orders for Sells/Shorts are much higher up and theres room for movement, but it also means there is likely a whale that is ready to dump and crash it back down.
You may be wondering, what did this example have to do with YinYang RSI Volume Trend Strategy? Well the reason we’ve discussed this is because we use Volume multiple times to apply multiplications in our calculations to add large weight to the price when there is lots of volume (this is applied both positively and negatively). For instance, if the price drops a little and there is high volume, our strategy will move its bounds MUCH lower than the price actually dropped, and if there was low volume but the price dropped A LOT, our strategy will only move its bounds a little. We believe this reflects higher levels of price accuracy than just price alone based on the examples described above.
Don’t believe us?
Here is with Volume NOT factored in (VWMA = SMA and we remove our Volume Filter calculation):
Which produced -$2880 Profit
Here is with our Volume factored in:
Which produced $553,000 (55.3%)
As you can see, we wen’t from $-2800 profit with volume not factored to $553,000 with volume factored. That's quite a big difference! (Please note previous success does not predict future success we are simply displaying the $ amounts as example).
Now how about RSI and why does it matter in this strategy?
As I’m sure most of you are aware, RSI is one of the leading indicators used in trading. For this reason we figured it would only make sense to incorporate it into our calculations. We fiddled with RSI for quite awhile and sometimes what logically seems to be the right way to use it isn’t. Now, because of this, our RSI calculation is a little odd, but basically what we’re doing is we calculate the RSI, then turn it into a percentage (between 0-1) that can easily be multiplied to the price point we need. The price point we use is the difference between our high purchase zone and our low purchase zone. This allows us to see how much price movement there is between zones. We multiply our zone size with our RSI multiplication and we get the amount we will add +/- to our basis line (white line). This officially creates the NEW high and low purchase zones that we are actually using and displaying in our trades.
If you found that confusing, here are some examples to why it is an important calculation for this strategy:
Before RSI factored in:
Which produced 27.8% Profit
After RSI factored in:
Which produced 553% Profit
As you can see, the RSI makes not only the purchase zones more accurate, but it also greatly increases the profit the strategy is able to make. It also helps ensure an relatively linear profit slope so you know it is reliable with its trades.
This strategy can work on pretty much anything, but you should tweak the values a bit for each pair you are trading it with for best results.
We hope you can find some use out of this simple but effective strategy, if you have any questions, comments or concerns please let us know.
HAPPY TRADING!
