FTD & DD Analyzer

3 hari lalu

FTD & DD Analyzer

A comprehensive tool for identifying Follow-Through Days (FTDs) and Distribution Days (DDs) to analyze market conditions and potential trend changes, based on William J. O'Neil's proven methodology.

About the Methodology
This indicator implements the market analysis techniques developed by William J. O'Neil, founder of Investor's Business Daily and author of "How to Make Money in Stocks." O'Neil's research, spanning market data back to the 1880s, has successfully identified major market turns throughout history. His FTD and DD concepts remain crucial tools for institutional investors and serious traders.

Overview
This indicator helps traders identify two critical market conditions:

1. Distribution Days (DDs) - days of institutional selling pressure
   
2. Follow-Through Days (FTDs) - confirmation of potential market bottoms and new uptrends
   

The combination of these signals provides valuable insight into market health and potential trend changes.

Key Features

• Distribution Day detection with customizable criteria
  
• Follow-Through Day identification based on classical methodology
  
• Market bottom detection using EMA analysis
  
• Dynamic warning system for accumulated Distribution Days
  
• Visual alerts with customizable labels
  
• Advanced debug mode for detailed analysis
  
• Flexible display options for different trading styles
  

Distribution Days Analysis

What is a Distribution Day?

A Distribution Day occurs when:

• The price closes lower by a specified percentage (default -0.2%)
  
• Volume is higher than the previous day
  

DD Settings

• Price Threshold: Minimum price decline to qualify (default -0.2%)
  
• Lookback Period: Number of days to analyze for DD accumulation (default 25)
  
• Warning Levels:
• First warning at 4 DDs
  
• Severe warning (SOS - Sign of Strength) at 6 DDs
  
• Display Options:
• Show/hide DD count
  
• Show/hide DD labels
  
• Choose between showing all DDs or only within lookback period
  

Follow-Through Day Detection

What is a Follow-Through Day?

Following O'Neil's research, a Follow-Through Day confirms a potential market bottom when:

• Occurs between day 4 and 13 after a bottom formation (optimal: days 4-7)
  
• Shows significant price gain (default 1.5%)
  
• Accompanied by higher volume than the previous day
  

Key Statistics:

• FTDs followed by distribution on days 1-2 fail 95% of the time
  
• Distribution on day 3 leads to 70% failure rate
  
• Later distribution (days 4-5) shows only 30% failure rate
  

FTD Settings

• Minimum Price Gain: Required percentage gain (default 1.5%)
  
• Valid Window: Day 4 to Day 13 after bottom
  
• Quality Rating:
• 🚀 for FTDs occurring within 7 days (historically most reliable)
  
• ⭐ for later FTDs
  

Market Bottom Detection
The indicator uses a sophisticated approach to identify potential market bottoms:
EMA Analysis:

• Tracks 8 and 21-period EMAs
  
• Monitors EMA alignment and momentum
  
• Customizable tolerance levels
  

Price Action:

• Looks for lower lows within specified lookback period
  
• Confirms bottom with subsequent price action
  
• Reset mechanism to prevent false signals
  

Visual Indicators

Label Types

• 📉 Distribution Days
  
• ⬇️ Market Bottoms
  
• 🚀/⭐ Follow-Through Days
  
• ⚠️ DD Warning Levels
  

Customization Options

• Label size: Tiny, Small, Normal, Large
  
• Label style: Default, Arrows, Triangles
  
• Background colors for different signals
  
• Dynamic positioning using ATR multiplier
  

Practical Usage

1. Monitor DD Accumulation:

• Watch for increasing number of Distribution Days
  
• Pay attention to warning levels (4 and 6 DDs)
  
• Consider reducing exposure when warnings appear
  

2. Bottom Recognition:

• Look for potential bottom formations
  
• Monitor EMA alignment and price action
  
• Wait for confirmation signals
  

3. FTD Confirmation:

• Track days after potential bottom
  
• Watch for strong price/volume action in valid window
  
• Note FTD quality rating for additional context
  

Alert System

Built-in alerts for:

• New Distribution Days
  
• Follow-Through Day signals
  
• High DD accumulation warnings
  

Tips for Best Results

1. Use multiple timeframes for confirmation
   
2. Combine with other market health indicators
   
3. Pay attention to sector rotation and market leadership
   
4. Monitor volume patterns for confirmation
   
5. Consider market context and external factors
   

Technical Notes

• The indicator uses advanced array handling for DD tracking
  
• Dynamic calculations ensure accurate signal generation
  
• Debug mode available for detailed analysis
  
• Optimized for real-time and historical analysis
  

Additional Information

• Compatible with all markets and timeframes
  
• Best suited for daily charts
  
• Regular updates and maintenance
  
• Based on O'Neil's time-tested market analysis principles
  

Conclusion

The FTD & DD Analyzer provides a systematic approach to market analysis, combining O'Neil's proven methodologies with modern technical analysis. It helps traders identify potential market turns while monitoring institutional participation through volume analysis.

Remember that no indicator is perfect - always use in conjunction with other analysis tools and proper risk management.