Price Touches 50-Day MA and Fails to Cross

17 Sep

Overview: The Price Touches 50-Day MA and Fails to Cross Indicator is a powerful tool designed for traders and analysts using TradingView to monitor and identify key interactions between an asset's price and its 50-day Simple Moving Average (SMA). This indicator specifically highlights moments when the price touches the 50-day MA but fails to cross it, signaling potential support or resistance levels that could influence future price movements.

Key Features:

50-Day Simple Moving Average (SMA) Calculation:

Automatically calculates and plots the 50-day SMA on your chart, providing a clear reference point for price action analysis.
Touch Detection:

Identifies when the closing price comes within a user-defined tolerance (default is 0.1%) of the 50-day MA, indicating a "touch."
Failure to Cross Confirmation:

Determines if the price, after touching the MA, fails to cross it in the subsequent bar. This helps in recognizing potential reversal points or consolidation zones.
Visual Indicators:

Plots red downward triangles above the bars where a touch-and-fail event occurs, making it easy to spot these critical moments at a glance.
Customizable Touch Tolerance:

Allows users to adjust the sensitivity of touch detection by modifying the touch tolerance percentage, catering to different trading strategies and asset volatilities.
Alert Conditions:

Offers the option to set up alerts that notify you whenever a touch-and-fail event is detected, ensuring you never miss significant trading signals.
How It Works:

Calculating the 50-Day SMA:

The indicator computes the 50-day SMA using the closing prices, providing a smooth average that reflects the asset's mid-term trend.
Detecting a Touch:

A "touch" is registered when the absolute difference between the closing price and the 50-day SMA is less than or equal to the specified tolerance. This proximity suggests a potential support or resistance level.
Confirming Failure to Cross:

After a touch is detected, the indicator checks whether the price fails to move beyond the 50-day MA in the next bar. If the price remains on the original side of the MA, it signifies a failed attempt to cross, highlighting a possible reversal or consolidation.
Plotting Indicators:

When a touch-and-fail event is confirmed, a red downward triangle is plotted above the corresponding bar, providing a clear visual cue for traders.
Setting Up Alerts:

Users can enable alert conditions to receive real-time notifications whenever a touch-and-fail event is detected, allowing for timely trading decisions.
Customization Options:

Touch Tolerance (%):

Adjust the touch_tolerance input to set how close the price needs to be to the 50-day MA to be considered a touch. This flexibility allows the indicator to be tailored to different trading styles and asset behaviors.
Visual Styles:

Customize the appearance of the SMA line and the touch-fail indicators to match your charting preferences, ensuring seamless integration with your existing setup.
Benefits:

Enhanced Decision-Making:

By highlighting key interactions with the 50-day MA, this indicator aids in identifying potential entry and exit points, improving overall trading strategy.
Time Efficiency:

Automates the process of monitoring price movements relative to the 50-day MA, saving traders valuable time and reducing the need for constant manual analysis.
Versatility:

Suitable for various asset classes, including stocks, forex, commodities, and cryptocurrencies, making it a versatile tool for any trader's toolkit.

Happy Trading!