[blackcat] L1 An Adaptive Moving Average For Swing Trading

19 Apr 2023

Level 1

Background

Scott Cong published an article of “An Adaptive Moving Average For Swing Trading” on April 2023. I rewrite it for pine script.


Function

In "An Adaptive Moving Average For Swing Trading," author Scott Cong introduces a new adaptive moving average that is designed to be responsive, smooth, and robust. He begins with a discussion of Perry Kaufman's adaptive moving average and explains how an adaptive moving average (AMA) can adapt to different market environments. Later he explains his methods of adjusting and changing the smoothing factor, which has better response than traditional EMA and SMA. I rewrited this new kind of moving average in pine script and use yellow color for its fast line while fuchsia color for its trigger signal as a slow line. By the way, divergence detector is also added for divergence notification. You can change period or length, and signal source parameters in setting dialog.

Remarks

Feedbacks are appreciated.

23 Apr

Nota Keluaran

OVERVIEW
The [blackcat] L1 Adaptive Moving Average for Swing Trading is designed to help swing traders identify potential entry and exit points using an adaptive moving average approach. This indicator calculates a unique adaptive moving average based on Scott Cong's method, which adjusts its sensitivity according to market volatility. By plotting this adaptive moving average alongside trigger lines, users can easily spot buy and sell opportunities 📈💹.

FEATURES

Implements Scott Cong’s Adaptive Moving Average:
Automatically adapts to changing market conditions.
Uses price range and total effort over a specified period.
Plots two key lines:
Adaptive AMA: Yellow line representing the calculated adaptive moving average.
Trigger Line: Fuchsia line acting as a reference for crossover signals.
Displays buy ('Buy') and sell ('Sell') labels on the chart for quick identification 🏷️
Generates alerts when crossover events occur between the adaptive moving average and the trigger line 🔔
Allows customization of the Length parameter to adjust sensitivity.
HOW TO USE

Add the indicator to your TradingView chart by selecting it from the indicators list.
Adjust the Length parameter to suit your preferred sensitivity.
Monitor the chart for buy and sell labels indicating potential trade opportunities.
Set up alerts based on the generated signals to receive notifications when conditions are met 📲.
Use the adaptive moving average and trigger lines to make informed trading decisions.
LIMITATIONS

The indicator may generate false signals in highly volatile or ranging markets 🌪️.
Users should combine this indicator with other forms of analysis for more reliable trading decisions.
The effectiveness of the indicator may vary depending on the asset and timeframe being analyzed.
NOTES

Ensure that you have sufficient historical data available for accurate calculations.
Test the indicator thoroughly on demo accounts before applying it to live trading 🔍.
Customize the appearance and parameters as needed to fit your trading strategy.