Smoothed Waddah ATR

13 Nov 2021

~~~All Credit to LAZY BEAR for posting the original Script which is an old MT4 indicator.~~~~

No this system does not repaint... if it does let me know. Either the code is wrong or you are using a repainting chart such as renko candles.

*PURPOSE*
This Is an "Enhanced or Smoothed" version of the script that captures the heiken-ashi closing price as its main calculation variable. While using normal bar or line charts. Enhancements integrate trade filters to reduce false signals.

*WHAT TYPE OF TRADING STRATEGY IS THIS?*
This is a Long Only, Trend Trading System. Is intended to be applied to Charts/Timeframes that produce sustainable trends for which ever asset you are trading.

*NOTE OF ADVICE REGARDING SETTINGS*
Settings can be tweaked but I have found that best results come with the given settings. If a chart is too choppy to trade this indicator successfully, it is advised not to change the settings but either find a different timeframe or different asset to apply this strategy to.

TLDR
Indicator measures the change of the MacD (difference between MAC D of given EMA's) and compares it to the difference between the Upper and Lower Bollinger bands. Green bar over trigger line= entry. Red bar over trigger line = close.


*SETTINGS AND INPUTS*
-MacD of HeikenAshi chart (will always be of the Heikenashi chart even when applied to different chart type)
sensitivity = input(150, title='Sensitivity') =range should be (125-175)multiplier so that MacD can be compared to BB
fastLength = input(20, title='MacD FastEMA Length')
slowLength = input(40, title='MacD SlowEMA Length')

-Bollinger Band of currently used price chart type
channelLength = input(20, title='BB Channel Length')
mult = input(1.5, title='BB Stdev Multiplier')

-14 Period RSI Trade Filter (set to 0 to Disable)
RSI14filter = input(40, title='RSI Value trade filter') =only gives entry when RSI is higher than given value


*ABSTRACT & CONCEPT*
TLDR - Indicator measures the change of the MacD (difference between MAC D of given EMA's) and compares it to the difference between the Upper and Lower Bollinger bands. Green bar over trigger line= entry. Red bar over trigger line = close.

Indicator plots -
Bars are the change in the MAC D and the indicator line is the difference in the BB.
When Bars are higher than the indicator line then it is considered a trend "Explosion"
Green Bars are Trend Explosion to the upside, Red Bars are Trend explosion to the downside.

GENERAL DETAIL-
the core calculation is measuring the change in MacD of current candle compared to the MacD of two previous candles.
[(MacD current)- (MacD two candle previous).]
This value is multiplied by the sensitivy so it can be compared to the change in Bollinger Band Width.
[(BBupper-BBlower)current - (BBupper-BBlower)one candle previous]

if the MACD change is positive then you get a green/lime bar for that value. If the MacDchange is negative you get a red/orange bar for that value.

[green vs lime] and [red vs orange] are determined by whether the actual change is increasing in that direction or decreasing. (bars getting taller or bars getting shorter)

Entry signal for long is A positive change in MACD difference (Green bar) that is greater than the change of the bollinger band (orange signal line) AND if the RSI value is above your filter.

Close signal or Trend Stop Warning Signal is given when a Negative MacD Difference (red bar) is greater than the change of the bollinger band (orange Line)

*CONSIDERATIONS AND THOUGHTS*
I have over 150 iterations of this indicator and this is the most consistent and best version of settings and filters I was able to generate. I built this indicator specifically for 3 charts. SPY monthly, QQQ monthly, BTC 3 Day. However this indicator works well on any long term bullish chart. (tech stocks are great) .

Trend trading systems are intended to be homerun hitting, plunge protecting indicators that allow for long legs and expanding volatility. This indicator does this as the trigger line is Dynamic with the expansion and contraction of the bollinger band.

I do not take every signal specifically not the close signals. Instead they more like warnings in ultra bullish environments.

If i had to pair this indicator with any other filter than the RSI, it would be a long term moving average i.e. the 50 week or equivalent for your chart. signals above rising moving averages means that you are trading with an upward trending market.

Hope this helps. Happy trades.

-SnarkyPuppy