It so happens to the traders that once in their lifetime journey they be sure to here the below statement. 1. I got struck in the consolidation zone 2. Signals from technical indicators failed because prices were consolidating. 3. Its pretty tuff to detect consolidation zone. (programmatically)
I don't know about other but I have heard this throughout my trading journey. Hence I started to debug the above 3 statements and came up with this indicator which detects consolidation zones in the chart.
there are 3 inputs settings 1. ATR multiplier = can be used to filter the consolidation box height. higher the value bigger the box (vertical view) and smaller the value smaller the box height. 2. Show Last No of Zones = set the No of previous zones you would like to see. 3. Consolidation Size = If set to small. all kind of sizes will be plotted ( majorly works for day trading) if set to wide, script looks for major consolidation zones (majorly works for higher timeframes). if set to medium, script looks medium size to wide size zones majorly for timeframe with more than 30 min.
What's this indicator is taking into account? 1. Moving Averages 2. Linear Regression curves 3. ATR 4. BB 5. BBW 6. Couple of Math calculation to support the zone identification.
Note: Plz do suggest for any kind of improvements or feedbacks.
Regards
Nota Keluaran
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Dear Traders,
Thanks for the continued feedback and here is the updated version of the Consolidation Zone Detection script.
Major Changes: 1. If the Zone is getting tightened zone continues to shrink either from the top or from the bottom or from both the sides.' 2, Improvised Algorithm to detect bit early. 3. Uni directional slooooow movements will be detected accordingly. 4. Added option to get strategy alerts using Discord Chat . like deploying Iron Condor while in Consolidation zone and deploying Long Straddle once the momentum is ready post breaking the zone.
Happy Trading & plz do PM for suggestions and feedback...