Death Cross and Golden Cross Highlighter

5 Jun

Overview

The script is designed to visually indicate the occurrence of Death Cross and Golden Cross events on a TradingView chart. It achieves this by calculating two moving averages (short-term and long-term) and plotting them on the chart. It then detects when these moving averages cross and highlights these points with labels and background colors.

Inputs

The script begins by defining input parameters:
- Short Moving Average Length: This is set to 50 by default, representing the short-term moving average period.
- Long Moving Average Length: This is set to 200 by default, representing the long-term moving average period.

These inputs allow users to customize the lengths of the moving averages according to their trading strategy.

Moving Averages Calculation

The script calculates two simple moving averages (SMAs) based on the closing prices:
- Short Moving Average (shortMA): Calculated over the short-term period specified by the user.
- Long Moving Average (longMA): Calculated over the long-term period specified by the user.

Plotting the Moving Averages

The moving averages are then plotted on the chart:
- The short-term moving average is plotted in blue.
- The long-term moving average is plotted in red.

These lines help users visually track the trends and potential crossover points.

Identifying Crossovers

The script identifies two key events:
- Golden Cross: Occurs when the short-term moving average crosses above the long-term moving average. This is typically considered a bullish signal, indicating a potential upward trend.
- Death Cross: Occurs when the short-term moving average crosses below the long-term moving average. This is typically considered a bearish signal, indicating a potential downward trend.

Highlighting Crossovers

To make the crossover events more noticeable, the script adds visual cues:
- Golden Cross: When a Golden Cross is detected, a green label with an upward arrow is plotted below the bar where the crossover occurs.
- Death Cross: When a Death Cross is detected, a red label with a downward arrow is plotted above the bar where the crossover occurs.

Background Coloring

Additionally, the script highlights the background of the chart:
- When a Golden Cross occurs, the background color is changed to a translucent green.
- When a Death Cross occurs, the background color is changed to a translucent red.

These background colors help emphasize the crossover events, making them easier to spot.

Usage

To use this script, a user would:
1. Copy the script and paste it into the Pine Script editor on TradingView.
2. Save the script and apply it to their chart.

By doing so, the user will see the moving averages plotted, and any Golden Cross or Death Cross events will be highlighted with labels and background colors. This visual aid helps traders quickly identify significant crossover events, which can inform their trading decisions.