RSI + MFI Momentum Mapper - CoffeeKillerRSI + MFI Momentum Mapper - CoffeeKiller Indicator Guide
Welcome traders! This guide will walk you through the RSI + MFI Momentum Mapper indicator, an innovative market analysis tool developed by CoffeeKiller that combines two powerful oscillators to create a comprehensive momentum visualization system.
🔔 **Warning: This Is Not a Standard RSI or MFI Indicator** 🔔 This indicator combines and normalizes RSI and MFI data to create a unified momentum representation with boundary detection and peak signaling features.
Core Concept: Combined Momentum Analysis
The foundation of this indicator lies in merging the strengths of two complementary oscillators - Relative Strength Index (RSI) and Money Flow Index (MFI) - to provide a more robust momentum signal that accounts for both price action and volume.
Directional Columns: Momentum Strength
- Positive Green Columns: Bullish momentum
- Negative Red Columns: Bearish momentum
- Color intensity varies based on momentum strength
- Special coloring for new high/low boundaries
Marker Lines: Dynamic Support/Resistance
- High Marker Line (Magenta): Tracks the highest point reached during a bullish phase
- Low Marker Line (Cyan): Tracks the lowest point reached during a bearish phase
- Creates visual boundaries showing momentum extremes
Peak Detection System:
- Triangular markers identify significant local maxima and minima
- Background highlighting shows important momentum peaks
- Helps identify potential reversal points and momentum exhaustion
Reference Lines:
- Zero Line (Gray): Divides bullish from bearish momentum
- High Line (+1): Upper threshold for extremely bullish conditions
- Low Line (-1): Lower threshold for extremely bearish conditions
Core Components
1. Oscillator Normalization
- RSI and MFI values centered around zero
- Values scaled to create consistent visualization
- Normalized range typically between -1 and +1
- Combination of indicators for signal reliability
2. Boundary Tracking System
- Automatic detection of highest values in bullish phases
- Automatic detection of lowest values in bearish phases
- Step-line visualization of boundaries
- Color-coded for easy identification
3. Peak Detection System
- Identification of local maxima and minima
- Background highlighting of significant peaks
- Triangle markers for peak visualization
- Zero-line cross detection for trend changes
4. Signal Smoothing
- Signal line calculation via SMA
- Helps filter noise and identify trends
- Provides confirmation of momentum direction
Main Features
Oscillator Settings
- Customizable RSI length for sensitivity control
- Customizable MFI length for sensitivity control
- Normalized display for consistent visualization
- Signal smoothing for clearer readings
Visual Elements
- Color-coded columns showing momentum direction and strength
- Dynamic marker lines for momentum boundaries
- Peak triangles for significant turning points
- Background highlighting for peak identification
- Reference lines for momentum threshold levels
Signal Generation
- Zero-line crosses for trend change signals
- Boundary breaks for momentum strength
- Peak formation for potential reversals
- Color changes for momentum direction and acceleration
Customization Options
- RSI and MFI length parameters
- Marker line visibility and colors
- Peak marker color selection
- Peak background display options
Trading Applications
1. Trend Identification
- Directional line crossing above zero: bullish trend beginning
- Directional line crossing below zero: bearish trend beginning
- Column color: indicates momentum direction
- Column height: indicates momentum strength
2. Reversal Detection
- Peak triangles after extended trend: potential exhaustion
- Background highlighting: significant reversal points
- Directional line approaching marker lines: potential trend change
- Color shifts from bright to muted: decreasing momentum
3. Momentum Analysis
- Breaking above previous high boundary: accelerating bullish momentum
- Breaking below previous low boundary: accelerating bearish momentum
- Special coloring (magenta/cyan): boundary breaks indicating strength
- Approaching +1/-1 lines: extreme momentum conditions
4. Market Structure Assessment
- Consecutive higher peaks: strengthening bullish structure
- Consecutive lower troughs: strengthening bearish structure
- Peak comparisons: relative strength of momentum phases
- Boundary line steps: market structure levels
Optimization Guide
1. Oscillator Settings
- RSI Length: Default 14 provides balanced signals
- Lower values (7-10): More responsive, potentially noisier
- Higher values (20-30): Smoother, fewer false signals
- MFI Length: Default 14 provides balanced signals
- Lower values: More responsive to volume changes
- Higher values: Less sensitive to short-term volume spikes
2. Visual Customization
- Marker Line Colors: Adjust for visibility on your chart
- Peak Marker Color: Default yellow provides good contrast
- Enable/disable background highlights based on preference
- Consider chart background when selecting colors
3. Signal Interpretation
- Stronger signals: When directional line approaches +1/-1
- Confirmation: When peaks form after extended momentum
- Early warnings: When color intensity changes before direction
- Trend strength: Distance between zero line and current reading
4. Reference Line Usage
- Zero line: Primary trend divider
- +1/-1 lines: Extreme momentum thresholds
- Marker lines: Dynamic support/resistance levels
- Distance from reference: Momentum strength measure
Best Practices
1. Signal Confirmation
- Wait for zero-line crosses to confirm trend changes
- Look for peak formations to identify potential reversals
- Check for boundary breaks to confirm strong momentum
- Use with price action for entry/exit precision
2. Timeframe Selection
- Lower timeframes: more signals, potential noise
- Higher timeframes: cleaner signals, less frequent
- Multiple timeframes: confirm signals across time horizons
- Match to your trading style and holding period
3. Market Context
- Strong bullish phase: positive columns breaking above marker line
- Strong bearish phase: negative columns breaking below marker line
- Columns approaching zero: potential trend change
- Columns approaching +1/-1: extreme conditions, potential reversal
4. Combining with Other Indicators
- Use with trend indicators for confirmation
- Pair with other oscillators for divergence detection
- Combine with volume analysis for validation
- Consider support/resistance levels with boundary lines
Advanced Trading Strategies
1. Boundary Break Strategy
- Enter long when directional line breaks above previous high marker line
- Enter short when directional line breaks below previous low marker line
- Use zero-line as initial stop-loss reference
- Take profits at formation of opposing peaks
2. Peak Trading Strategy
- Identify significant peaks with triangular markers
- Look for consecutive lower peaks in bullish phases for shorting opportunities
- Look for consecutive higher troughs in bearish phases for buying opportunities
- Use zero-line crosses as confirmation
3. Extreme Reading Strategy
- Look for directional line approaching +1/-1 lines
- Watch for color changes and peak formations
- Enter counter-trend positions after confirmed peaks
- Use tight stops due to extreme momentum conditions
4. Column Color Strategy
- Enter long when columns turn bright green (increasing momentum)
- Enter short when columns turn bright red (increasing momentum)
- Exit when color intensity fades (decreasing momentum)
- Use marker lines as dynamic support/resistance
Practical Analysis Examples
Bullish Market Scenario
- Directional line crosses above zero line
- Green columns grow in height and intensity
- High marker line forms steps upward
- Peak triangles appear at local maxima
- Background highlights appear at significant momentum peaks
Bearish Market Scenario
- Directional line crosses below zero line
- Red columns grow in depth and intensity
- Low marker line forms steps downward
- Peak triangles appear at local minima
- Background highlights appear at significant momentum troughs
Consolidation Scenario
- Directional line oscillates around zero line
- Column colors alternate frequently
- Marker lines remain relatively flat
- Few or no new peak highlights appear
- Directional values remain small
Understanding Market Dynamics Through RSI + MFI Momentum Mapper
At its core, this indicator provides a unique lens to visualize market momentum by combining two complementary oscillators:
1. Combined Strength: By averaging RSI (price-based) and MFI (volume-based), the indicator provides a more comprehensive view of market momentum that considers both price action and buying/selling pressure.
2. Normalized Scale: The indicator normalizes values around zero, making it easier to identify bullish vs bearish conditions and the relative strength of momentum in either direction.
3. Dynamic Boundaries: The marker lines create a visual representation of the "high water marks" of momentum in both directions, helping to identify when markets are making new momentum extremes.
4. Exhaustion Signals: The peak detection system highlights moments where momentum has reached a local maximum or minimum, often precursors to reversals or consolidations.
Remember:
- Combine signals from directional line, marker lines, and peak formations
- Use appropriate timeframe settings for your trading style
- Customize the indicator to match your visual preferences
- Consider market conditions and correlate with price action
This indicator works best when:
- Used as part of a comprehensive trading system
- Combined with proper risk management
- Applied with an understanding of current market conditions
- Signals are confirmed by price action and other indicators
DISCLAIMER: This indicator and its signals are intended solely for educational and informational purposes. They do not constitute financial advice. Trading involves significant risk of loss. Always conduct your own analysis and consult with financial professionals before making trading decisions.
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Pristine Market Analysis DashboardThe Pristine Market Analysis indicator enables users to perform comprehensive top-down analysis of global risk assets in a fraction of the time! 🏆
Top-down analysis is important because the overall market environment has a significant impact on the success of individual trading setups.
💠 Market Analysis Insights
▪ Identify if money is flowing into equities, or equity alternatives like bonds,gold,and bitcoin
▪ Perform relative strength analysis of US vs International equities
▪ Identify rotation into risk-on or risk-off assets to determine overall market health
▪ Detect leading sectors to enable targeted stock screening, or to trade the ETFs themselves
💠 Market Analysis Metrics to Improve Your Situational Awareness!
▪ %Δ - 1-day percent change
▪ ATR Δ - 1-day percent change/ ATR %
▪ DCR - Daily closing range
▪ 52WR - Measures where a security is trading in relation to it’s 52wk high and 52wk low
▪ MAx - Measures how extended price is from a key moving average of your choosing in ATR% multiple terms
▪ ST ↑↓ (Short- Term Stage) - Measures the short-term trend using key moving averages of your choosing
▪ LT ↑↓ (Long-Term Stage) - Measures the long-term trend using key moving averages of your choosing
The indicator automatically sorts from greatest to least based on the %Δ column 👇
What is ATR?
The average true range (ATR) is a technical analysis indicator introduced by market technician J. Welles Wilder Jr. in his book New Concepts in Technical Trading Systems that measures security volatility by decomposing the entire range of an asset price for a time period.
Why do we use it?
Because converting price moves into ATR terms better contextualizes them relative to the asset's historical volatility!
Example: If the ATR is $2.50, it means the average price range each day is roughly $2.50.
We use an ATR length of 20 days in our calculation, and convert the 20D ATR into a 20D ATR %. The formula for ATR % is as follows:
ATR % = (ATR/Current Price) * 100
Why does MAx matter?
MAx measures the number of ATR % multiples a security is trading away from a key moving average.The default moving average length is 50 days.
MAx can be used to identify mean reversion trades . When a security trends strongly in one direction and moves significantly above or below its moving average, the price often tends to revert back toward the average.
Example, if the ATR % of the security is 5%, and the stock is trading 50% higher than the 50D SMA, the MAx would be 50%/5% = 10. A user might opt to take a countertrend trade when the MAx exceeds a predetermined level.
The MAx can also be useful when trading breakouts above or below the key moving average of your choosing. The lower the MAx, the tighter stop loss one can take if trading against that level.
Identifying an extreme price extension using MAx 👇
Price mean reverted immediately following the high MAx 👇
Why does 52WR matter?
Historical analysis conducted by market legends like William O’Neill and Mark Minervini indicates that stocks trading at or near 52wk highs tend to outperform over time, and vice versa for stocks trading close to 52wk lows. Avoiding stocks trading with a low 52WR metric can help traders avoid buying stocks in downtrends. Likewise, focusing on stocks trading with a high 52WR provides a technical edge.
💠 Stage Analysis Guide
Short-term and long-term stage analysis data is provided in the two rightmost columns of each table. The columns are labeled ST ⇅ and LT ⇅.
Why is Stage Analysis important? Popularized by Stan Weinstein, stage analysis is a trend following system that classifies assets into four stages based on price-trend analysis.
The problem? The interpretation of stage analysis is highly subjective. Based on the methodology provided in Stan Weinstein’s books, five different traders could look at the same chart, and come to different conclusions as to which stage the security is in!
We solved for this by creating our own methodology for classifying stocks into stages using moving averages. This indicator automates that analysis, and produces short-term and long-term trend signals based on user-defined key moving averages. You won’t find this in any textbook or course, because it’s completely unique to the Pristine trading methodology.
Our indicator calculates a short-term trend signal using two moving averages; a fast moving average, and a slow moving average. We default to the 10D EMA as the fast moving average & the 20D SMA as the slow moving average. A trend signal is generated based on where price is currently trading with respect to the fast moving average and the slow moving average. We use the signal to guide shorter-term swing trades.
In general, we want to take long trades in stocks with strengthening trends, and short trades in stocks with weakening trends. The user is free to change the moving averages based on their own short-term timeframe. Every trader is unique!
The same process is applied to calculate the long-term trend signal. We default to the 50D SMA as our fast moving average, and the 200D SMA as the slow moving average for the LT ⇅ signal calculation, but users can change these to fit their own unique trading style.
What is Stage 1?
Stage 1 identifies stocks that transitioned from downtrends, into bottoming bases.
Stage 1A - Bottom Signal: Marks the first day a security shows initial signs of recovery after a downtrend, with early indications of strength emerging.👇
Stage 1B - Bottoming Process: Identifies the ongoing phase where the security continues to stabilize and strengthen, confirming the base-building process after the initial signal.👇
Stage 1R - Failed Uptrend: Detects when a security that had entered an early uptrend loses momentum and slips back into a bottoming phase, signaling a failed breakout.👇
What is Stage 2?
Stage 2 identifies stocks that transitioned from bottoming bases to uptrends.
Stage 2A - Breakout: Marks the first day a security decisively breaks out, signaling the start of a new uptrend.👇
Stage 2B - Uptrend: Identifies when the security continues to trade in an established uptrend following the initial breakout, with momentum building but not yet showing full strength.👇
Stage 2C - Strong Uptrend: Detects when the uptrend strengthens further, with the security displaying clear signs of accelerating strength and buying pressure.👇
Stage 2R - Failed Breakdown: Detects when a security that had recently entered a corrective phase reverses course and reclaims its upward trajectory, moving back into an uptrend.👇
What is Stage 3?
Stage 3 identifies stocks that transitioned from uptrends to topping bases.
Stage 3A - Top Signal: Marks the first day a security shows initial signs of weakness after an uptrend, indicating the start of a potential topping phase.👇
Stage 3B - Topping Process: Identifies the period following the initial signal when the security continues to show signs of distribution and potential trend exhaustion.👇
Stage 3R - Failed Breakdown: Detects when a security that had entered a deeper corrective phase reverses upward, recovering enough strength to re-enter the topping phase.👇
What is Stage 4?
Stage 4 identifies stocks that transitioned from topping bases to downtrends.
Stage 4A - Breakdown: Marks the first day a security decisively breaks below key support levels, signaling the start of a new downward trend.👇
Stage 4B - Downtrend: Identifies when the security continues to trend lower following the initial breakdown, with sustained bearish momentum, though not yet fully entrenched.👇
Stage 4C - Strong Downtrend: Detects when the downtrend intensifies, with the security displaying clear signs of accelerating weakness and selling pressure.👇
Stage 4R - Failed Bottom: Detects when a security that had begun to show early signs of bottoming reverses course and resumes its decline, falling back into a downtrend.👇
Stage N/A - Recent IPO: Applies to stocks that recently IPO’ed and don’t have enough data to calculate all necessary moving averages.
💠 Historical Analysis
Users can leverage the Replay feature in TradingView to perform historical analysis and see how the overall configuration of global risk assets looked at key turning points in the market!
To perform historical analysis:
1) Show the chart if previously hidden (see Tips and Tricks).
2) Click the Replay button on the toolbar at the top of the chart.
3) Use the slider on the chart to select the bar to begin the analysis.
💠 Comprehensive Tooltips
Hover over header labels to get detailed information about the data and relevant calculations.
For stage analysis (Short Term and Long Term), the tooltips provide a complete key of all the relevant stages.
💠 Settings and Preferences
▪ Customize this script by setting preferred colors and thresholds.
▪ There are two tables that can be customized, one on each side of the chart. For each table you can configure the location and show/hide each table. You can also specify colors for header and row data, including your preferred text size.
▪ You can customize the moving averages that are used in stage analysis. Specify your preferred fast and slow moving averages for both short-term and long-term analysis.
▪ For the ATR extension, the default moving average is 50D SMA. You can choose the length and type (SMA or EMA) to align with your trading preferences.
💠 Tips and Tricks
▪ Hide/Show Chart:
To provide a clean backdrop for the tables, it can be helpful to hide the chart. Hover your mouse over the symbol information in the upper right. Select the "..." option and choose "Hide" option. Choose the option "Show" to see the chart details if hidden.
▪ Futures Outside Regular Trading Hours (RTH):
In order for the data in the “%Δ” column of the the “Equity Alternatives” table to populate correctly when outside of regular trading hours, you must have your chart displaying a futures contract. Examples: ES, NQ, RTY, GC.
Trend Strength Momentum Indicator (TSMI)Introducing the Trend Strength Momentum Indicator (TSMI)
With over two decades of experience, I've found that no single indicator can consistently predict market movements. The key lies in combining multiple indicators to capture different market dimensions—trend, momentum, and volume. With this in mind, I present the Trend Strength Momentum Indicator (TSMI), a comprehensive tool designed to spot emerging uptrends and downtrends in cryptocurrency and other asset markets.
1. Overview of TSMI
The TSMI amalgamates three critical market aspects:
Trend Direction and Strength: Utilizing Moving Averages (MA) and the Average Directional Index (ADX).
Momentum: Incorporating the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI).
Volume Confirmation: Employing the On-Balance Volume (OBV) indicator.
By combining these elements, TSMI aims to provide a robust signal that not only indicates the direction of the trend but also confirms its strength and sustainability through momentum and volume analysis.
2. Components and Calculations
A. Trend Component
Exponential Moving Averages (EMA):
50-day EMA: Captures the short to medium-term trend.
200-day EMA: Reflects the long-term trend.
Average Directional Index (ADX):
Measures the strength of the trend regardless of its direction.
A value above 25 indicates a strong trend, while below 20 suggests a weak or non-trending market.
B. Momentum Component
Moving Average Convergence Divergence (MACD):
Calculated by subtracting the 26-day EMA from the 12-day EMA.
The MACD line crossing above the signal line (9-day EMA of MACD) indicates bullish momentum; crossing below suggests bearish momentum.
Relative Strength Index (RSI):
Oscillates between 0 and 100.
Readings above 70 indicate overbought conditions; below 30 suggest oversold conditions.
C. Volume Component
On-Balance Volume (OBV):
Cumulatively adds volume on up days and subtracts volume on down days.
A rising OBV alongside rising prices confirms an uptrend; divergence may signal a reversal.
3. TSMI Calculation Steps
Step 1: Trend Analysis
EMA Crossover:
Identify if the 50-day EMA crosses above the 200-day EMA (Golden Cross), indicating a potential uptrend.
Conversely, if the 50-day EMA crosses below the 200-day EMA (Death Cross), it may signal a downtrend.
ADX Confirmation:
Confirm the strength of the trend. An ADX value above 25 supports the EMA crossover signal.
Step 2: Momentum Assessment
MACD Evaluation:
Look for MACD crossing above its signal line for bullish momentum or below for bearish momentum.
RSI Check:
Ensure RSI is not in overbought (>70) or oversold (<30) territory to avoid potential reversals against the trend.
Step 3: Volume Verification
OBV Direction:
Confirm that OBV is moving in the same direction as the price trend.
Rising OBV with rising prices strengthens the bullish signal; falling OBV with falling prices strengthens the bearish signal.
Step 4: Composite Signal Generation
Bullish Signal:
50-day EMA crosses above 200-day EMA (Golden Cross).
ADX above 25, indicating a strong trend.
MACD crosses above its signal line.
RSI is between 30 and 70, avoiding overbought conditions.
OBV is rising.
Bearish Signal:
50-day EMA crosses below 200-day EMA (Death Cross).
ADX above 25.
MACD crosses below its signal line.
RSI is between 30 and 70, avoiding oversold conditions.
OBV is falling.
4. How to Use the TSMI
A. Entry Points
Buying into an Uptrend:
Wait for the bullish signal criteria to align.
Enter the position after the 50-day EMA crosses above the 200-day EMA, supported by positive momentum (MACD and RSI) and volume (OBV).
Selling or Shorting into a Downtrend:
Look for the bearish signal criteria.
Initiate the position after the 50-day EMA crosses below the 200-day EMA, with confirming momentum and volume indicators.
B. Exit Strategies
Protecting Profits:
Monitor RSI for overbought or oversold conditions, which may indicate potential reversals.
Watch for MACD divergences or crossovers against your position.
Use trailing stops based on the ATR (Average True Range) to allow profits to run while protecting against sharp reversals.
C. Risk Management
Position Sizing:
Use the ADX value to adjust position sizes. A stronger trend (higher ADX) may justify a larger position, whereas a weaker trend suggests caution.
Avoiding False Signals:
Be cautious during sideways markets where EMAs may whipsaw.
Confirm signals with multiple indicators before acting.
5. Examples
Example 1: Spotting an Emerging Uptrend in Bitcoin
Date: Let's assume on March 1st.
Observations:
EMA Crossover: The 50-day EMA crosses above the 200-day EMA.
ADX: Reading is 28, indicating a strong trend.
MACD: Crosses above the signal line and moves into positive territory.
RSI: Reading is 55, comfortably away from overbought levels.
OBV: Shows a rising trend, confirming increasing buying pressure.
Action:
Enter a long position in Bitcoin.
Set a stop-loss below recent swing lows.
Outcome:
Over the next few weeks, Bitcoin's price continues to rise, validating the TSMI signal.
Example 2: Identifying a Downtrend in Ethereum
Date: Let's assume on July 15th.
Observations:
EMA Crossover: The 50-day EMA crosses below the 200-day EMA.
ADX: Reading is 30, confirming a strong trend.
MACD: Crosses below the signal line into negative territory.
RSI: Reading is 45, not yet oversold.
OBV: Declining, indicating selling pressure.
Action:
Initiate a short position or exit long positions in Ethereum.
Place a stop-loss above recent resistance levels.
Outcome:
Ethereum's price declines over the following weeks, confirming the downtrend.
6. When to Use the TSMI
Trending Markets: TSMI is most effective in markets exhibiting clear trends, whether bullish or bearish.
Avoiding Sideways Markets: In range-bound markets, EMAs and momentum indicators may provide false signals. ADX readings below 20 suggest it's best to stay on the sidelines.
Volatile Assets: Particularly useful in cryptocurrency markets, which are known for their volatility and extended trends.
7. Limitations and Considerations
Lagging Indicators: Moving averages and ADX are lagging by nature. Rapid reversals may not be immediately captured.
False Signals: No indicator is foolproof. Always confirm signals with multiple components of TSMI.
Market Conditions: External factors like news events can significantly impact prices. Consider combining TSMI with fundamental analysis.
8. Enhancing TSMI
Customization: Adjust EMA periods (e.g., 20-day and 100-day) based on the asset's volatility and your trading timeframe.
Additional Indicators: Incorporate Bollinger Bands to gauge volatility or Fibonacci retracement levels to identify potential support and resistance.
Conclusion
The Trend Strength Momentum Indicator (TSMI) offers a holistic approach to spotting emerging trends by combining trend direction, momentum, and volume. By synthesizing the strengths of various traditional indicators while mitigating their individual limitations, TSMI provides traders with a powerful tool to navigate the complex landscape of cryptocurrency and other asset markets.
Key Benefits of TSMI:
Comprehensive Analysis: Integrates multiple market dimensions for well-rounded insights.
Early Trend Identification: Aims to spot trends early for optimal entry points.
Risk Management: Helps in making informed decisions, thereby reducing exposure to false signals.
By applying TSMI diligently and complementing it with sound risk management practices, traders can enhance their ability to capitalize on market trends and improve their overall trading performance.
Adaptive On Balance Volume with Trend█ Introduction
The Adaptive On Balance Volume (AOBV) indicator enhances the traditional On Balance Volume (OBV) by introducing adaptability, volatility detection, and trend analysis. It helps traders identify the direction of volume flow, assess volume momentum, and spot potential reversals in the market.
Detecting market tops and bottoms is crucial for making informed trading decisions. The AOBV indicator offers a method for identifying these points by using an adaptive volatility detection function that highlights potential volume peaks or climaxes, suggesting when a price top or bottom may be forming.
█ Understanding the AOBV
Note: Details on how calculations are conducted can be found at the end of this script description.
1. The Basics of the AOBV Function:
• Adaptive Momentum Calculation: Instead of using a fixed momentum formula, the AOBV uses the original formula for basic momentum and enhances it based on relative strength and applies an adaptive smoothing function.
• Dynamic Smoothing:
• Strong Momentum: When the AOBV detects significant changes (strong momentum), it reduces smoothing. This makes the indicator more responsive to major market movements.
• Weak Momentum: When momentum is weak (small changes), it increases smoothing to filter out market noise.
This adaptability allows the AOBV to more accurately reflect volume momentum, responding promptly during significant market moves and remaining stable during quieter periods.
To determine the trend direction (bullish or bearish), the indicator calculates a signal curve and displays the difference as bars:
• Bar Above the Middle Line: Indicates a bullish trend.
• Bar Below the Middle Line: Indicates a bearish trend.
2. Volatility Function:
The volatility function measures how much the AOBV deviates from its average by comparing it to its smoothed version. It calculates the exponential standard deviation to estimate volatility.
• Purpose: Identifies when volume momentum is near a climax or when a trend is nearing exhaustion.
• How It Works:
• Compares current volatility to previous bars.
• Computes a percentage indicating how often the current volatility is higher than past values.
• If this percentage exceeds a defined threshold, it signals a significant volatility event by plotting a dot above or below the bar.
This pattern typically manifests itself during strong runs on price followed by a period of consolidation. Thus, estimating volatility would be an acceptable measure of when a market is reaching or nearing an implied top or bottom.
3. The Trend Function:
The trend function combines several common indicators to gauge buildup toward a reversal or a continuation of a trend when the AOBV changes direction.
• Components:
• AOBV Strength Percentage: Calculates the percentage change in the AOBV to gauge its strength and direction.
• Supertrend Indicator: Acts as the main driver for trend buildup.
• Vertical Horizontal Filter (VHF): Measures market consolidation, adjusting the trend strength accordingly.
• Adaptive RSI: Further refines the trend strength based on volume momentum.
• Trend Ranking:
• Assigns a trend rank to the AOBV that reflects both market direction and momentum.
• Colors are used to represent different trend strengths: Strong Bullish, Bullish, Strong Bearish, and Bearish.
█ How to Use the AOBV
• Above the Middle Line: Suggests a bullish trend.
• Below the Middle Line: Suggests a bearish trend
• The Volatility dots:
• Indicate strong momentum relative to previous bars.
• Signal that the trend may be nearing a climax or exhaustion.
• Can imply a potential market top or bottom.
• Consolidation can be detected by visually comparing current bars to previous ones. This should be obvious since, and as described, the AOBV bars represent volume momentum.
• The trend function is used to gauge the likelihood of a reversal or a continuation of a trend; trend is represented with several colors: strong bullish trend, bullish trend, strong bearish trend, and finally simply a bearish trend.
It is important to understand that this trend function is not the typical trend function found on other technical indicators. It must be viewed within the context of the AOBV momentum. For example, if AOBV is exerting a bullish trend (bars above middle line), then a bearish trend with no major change in momentum and no volatility indication could mean a false reversal. Conversely, a large charge in AOBV could be a strong indication of a market reversal.
█ Key Features
• Two Display Modes: Curve and Bars:
The Adaptive OBV can be viewed in two different display modes: Curve and Bars Mode. "Curve Mode" offers the classic OBV representation (but as AOBV) with trend, while "Bars Mode" incorporates volatility detection and trend, making it the recommended mode.
• Volatility Function:
• Dots appear above or below the volume bars when significant volatility events are detected.
• The sensitivity can be adjusted by changing the percentage threshold.
• Trend Analysis:
• Helps gauge the likelihood of a trend continuation or reversal.
• Uses color-coded trend ranks for easy interpretation.
• Flexible Lookback Period:
Lookback periods for the main AOBV, its signal line, trend function, and volatility function can be customized.
• Recommendations:
• Match the main lookback period with the volatility period: Ensures consistency in momentum and volatility measurements.
• Match the trend lookback period with the signal AOBV lookback period: Aligns trend analysis with the underlying momentum signals.
Below is a sample demonstrating the utility on a 1- minute chart.
█ Calculation Details:
• AOBV Calculations
The AOBV differs the traditional OBV by focusing on the differences in OBV values rather than absolute price movements. Initially, it calculates the standard OBV by accumulating volume based on whether the closing price is higher or lower than the previous close. Next, it computes the difference between the current OBV and the previous OBV to measure changes in volume momentum. It calculates the average net change and average total change of these OBV differences over a specified period using a selected averaging method (e.g., EMA, SMA). By dividing the average net change by the average total change, it obtains a change ratio that reflects the strength and direction of volume momentum.
This change ratio is then scaled to an RSI-like value between 0 and 100, which is used to derive an adaptive smoothing factor (alpha). The alpha adjusts dynamically—when the change ratio indicates strong momentum, alpha increases, making the indicator more responsive to recent changes; when momentum is weak, alpha decreases, increasing smoothing to filter out noise.
The adaptive OBV is calculated by applying this alpha to combine the current OBV and the previous adaptive OBV value. This adaptive smoothing allows the indicator to adjust its sensitivity based on market conditions, becoming more responsive during strong momentum and more stable during weak momentum.
A smoothed OBV signal line is also computed using weighted moving averages for comparison. By analyzing the difference between the adaptive OBV and this smoothed signal line, the indicator identifies bullish or bearish trends. Positive differences suggest bullish momentum (bars above the middle line), while negative differences indicate bearish momentum (bars below the middle line).
• Volatility Calculations
The volatility function in the AOBV indicator identifies significant changes in volume momentum by estimating the variability of recent momentum shifts. It begins by calculating the difference between the AOBV and its smoothed signal line, capturing the current change in volume momentum. To assess volatility, the function employs exponential smoothing to compute adaptive averages of both the volume and the squared volume over a specified lookback period. By combining these averages, it estimates the current standard deviation of the volume momentum changes, effectively measuring how much the momentum deviates from its average level.
This estimated volatility is then compared to historical volatility values over the lookback period to determine how frequently the current volatility exceeds past levels. If the proportion of times the current volatility is higher than previous values and it surpasses a user-defined threshold, it signals a significant volatility event, indicating a potential volume climax
• Trend Calculations
As outlined earlier in description, the trend function is composed of several components:
The Supertrend indicator calculates dynamic support and resistance levels based on price movements and volatility using the Average True Range. It assesses whether the closing price is above or below these levels to determine the primary trend direction. If the price is above the Supertrend line: The market is considered to be in an uptrend. If the price is below the Supertrend line: The market is considered to be in a downtrend.
The Vertical Horizontal Filter measures the strength of the trend by comparing the price range over a period to the sum of absolute price changes. It does this by comparing the difference between the highest and lowest prices over a given period (the "vertical" movement) to the sum of the absolute differences between consecutive prices (the "horizontal" movement). A higher VHF value indicates a stronger, more directional trend, while a lower value suggests that the market is moving sideways without a clear trend.. If the VHF detects consolidation, it downgrades the trend strength indicated by the Supertrend. This prevents the trend function from overemphasizing the Supertrend's signals when the market lacks clear direction.
The Adaptive RSI Analyzes recent changes in the AOBV to identify whether volume momentum is strengthening or weakening (based on the volume percent change) correlating price movement with volume momentum. It only upgrades or downgrades on a bar by bar basis if price movement is correlating with percent change. This acts as a corrective measure against the VHF since quiet periods (consolidation) can occur between strong moves. The alpha generated from the adaptive function is the same as the one generated with the AOBV calculations.
█ Disclaimer
This script is provided for educational and informational purposes only and should not be considered financial advice. Trading financial instruments carries a high level of risk and may not be suitable for all investors. Before using this script, please consult with a qualified financial advisor to ensure it aligns with your individual circumstances. The author does not guarantee the accuracy or completeness of the script and is not responsible for any losses or damages that may occur from its use. Use this script at your own risk.
Currency Strength [LuxAlgo]The Currency Strength indicator displays the historical relative strength of 5 user selected currencies over a user selected period of time. Users can also display relative strength of currencies as a scatter plot, further informing on the evolution of currency strength.
🔶 SETTINGS
Display: Determines the type of data displayed by the indicator. By default, the trailing relative strength of currencies is displayed, with the other option displaying the scatter plot.
Timeframe: Timeframe period used to calculate currency relative strength.
🔹 Meter
Show Strength Meter: Displays the currency strength meter on the indicator panel.
Strength Meter Resolution: Resolution of the currency strength meter, higher resolutions allow to observe smaller difference in strength.
Location: Location of the currency strength meter on the indicator pane.
Size: Size of the currency strength meter.
🔹 Relative Strength Scatter Graph
Scatter Graph Resolution: Horizontal and vertical width of the scatter plot (in bars). Higher values allow a more precise position on the X axis.
🔶 USAGE
Measuring the relative strength of a currency allows users to assess the relative performance of a currency against a basket of other currencies.
The term "strength" can convey various interpretations depending on the indicator. Here "strength" is interpreted as an indicator of performance, with stronger currencies having greater performances over the selected period (positive changes of higher magnitude).
The Currency Strength indicator allows users to analyze the relative strength of currencies over a user selected period - the returned results will reset periodically and will accumulate afterward.
The above chart shows the hourly relative strength of various currencies on the 1min TF.
🔹 Scatter Graph
The scatter graph displays the relative strength of a currency over its value during the previous period. This not only allows users to see if a currency is strong... but also if it's getting stronger compared to the previous period.
In order to quickly interpret results, the graph is divided into four areas. A currency (displayed as a point) being in a specific area returns the following information:
Strong(Green): Currency has a positive relative strength (bullish) and is greater than its value over the previous period.
Improving (Yellow): Currency has a negative relative strength (bearish) and is greater than its value over the previous period.
Weakening (Aqua): Currency has a positive relative strength (bullish) and is lower than its value over the previous period.
Weak (Red): Currency has a negative relative strength (bearish) and is lower than its value over the previous period.
🔶 DETAILS
There is a wide variety of methods for the calculation of a currency's relative strength. The primary focus of the indicator is on the meter as well as the relative strength scatter graph. The currency strength calculation can be considered more basic.
Given two currencies, B (base) and Q (quote), the proposed indicator calculation process is as follows:
Exchange rate BQ(t) over time t is obtained, a rising value of BQ(t) means that a unit of B is now worth a higher amount of Q , highlighting strength of B over Q on that precise variation.
The individual relative strength over time IRS(t) is obtained as the percentage relatively close to the open difference of BQ(t) , that is:
IRS(t) = / open(t) * 100
Normalizing the close to open difference allows for the various currencies' relative strengths to approximately share the same scale.
The above operation is performed n times over a space of n currencies O( n ) . The obtained individual relative strengths for one specific currency are then added together, forming the final composite relative strength ( CRS ) of that currency:
CRS (t) = IRS (t) + IRS (t) + ... + IRS (t)
The cumulative sum of CRS(t) over the user selected period is then obtained.
GA - Momentum DivergencesGA Momentum Divergences Script highlights Trend Strength, Overbought-Oversold Conditions, Regular-Hidden Divergences. Besides, it shows the Buying-Selling Pressure.
The practical use of any Momentum Curve helps in the comprehension of:
Supply-Demand Absorption.
Thrusts and their shortening.
The reversing and the continuation of the trend.
True Strength of the Trend.
Price Strength.
Increase and Decrease in Buying-Selling Pressure.
You choose which curve to show, according to your needs. There are 2 groups of curves.
Momentum Curves
GA Momentum.
Commodity Channel Index ( CCI ).
Relative Strength Index ( RSI ).
Stochastic %K.
True Strength Indicator ( TSI ).
Money Flow Curves
GA Money Flow.
Chaikin Money Flow.
Money Flow Index.
Every Curve used in this script has 0 as center. This means that RSI and Stochastic Curves wave around 0 and not around 50.
Fractal Algorithm for Pivots and Divergences
GA Momentum script highlights Divergences. This is possible by the Fractal Calculation of Pivot Points .
The sensibility of the algorithm depends on the look back and on the look forward of pivot points . This means that it does not highlight every divergence. But it marks divergences according to settings.
Besides, the interpretation of those divergences depends on the experience of the trader.
This feature has a particular use for the purpose to simplify and optimize. Besides, it is a very important feature provided by the GA Money Flow script.
Regular and Hidden Divergences highlight the weakening and strengthening of the price behavior. They give an anticipation to price changing. Besides, they enforce the judgment on the condition that marks the price continuation.
The Fractal Algorithm can also mark a Channel. This happens enveloping the Curve between its marked pivot points .
Flags and lines mark Divergences in the Curve. GA Momentum Divergences highlights Regular Divergences and Hidden Divergences.
Price and Momentum, Volume and Money Flow
The GA Momentum script works with any marketplace. It uses price variations and volume variations, according to needs and market.
Every curve available in the script is a mathematical discretization of the market. But in those marketplaces that includes the volume you can use Money Flow Curves. Where the volume is missing the Money Flow Curves return zero. In this case, a Momentum Curve is the right choice because it uses the price variations.
GA Momentum and GA Money Flow are formulas built for this script. They include several peculiarities that are a privilege of other functions. This gives a better visual impact by their practical use.
TSI Curve or RSI Curve are the right choices to replace Money Flow Curves where the volume is not available. In the same way, RSI Curve can replace the TSI Curve for the Trend Strength. Then, the RSI Curve is universal. It works on any marketplace giving a lot of information, using it in the right way.
RSI is a slow curve. It waves above and below the middle line, according to the bullish and bearish trend . This is why it incorporates the Trend Strength in its calculation.
Instead, other choices give Faster Momentum Curves that give different advantages and peculiarities. The final result and purpose do not change.
Market Conditions
Overbought and Oversold Conditions could not cause the immediate reversing of the trend. The changing occurs according to Thrusts and their shortening.
This happens by one or more rebounds in the price action. Indeed, this marks hesitation to continue the advancing or the declining of the price.
The Momentum Curve can highlight the absorption of Supply Pressure and Supporting Demand. This precedes the Climactic Point so as a Thrust during the advancing or declining of the price.
True Strength and Money Flow curves follow the trend. They show where the trend is weakening or strengthening.
When these curves rise together with the trend, this confirms the trend. Instead, when these curves hesitate, they are marking a changing.
TSI and Money Flow have advantages. They show the continuation of the trend by its positive or negative value. Besides, they show the shortening of the trend. Moreover, the curve anticipates the shortening of the thrust.
Money Flow Curves highlights the prevailing of Buying Pressure of Selling Pressure. This is possible because their formulas includes the volume . But the TSI discretization that uses prices, works giving a fair result.
This returns an unconditional conclusion. The volume has a high relevance because of the correlation between effort and result. But despite this, the mathematical discretization of the market can work without it.
Short and Long Signal Lines
The GA Momentum plots 2 extra curves to support the market momentum interpretation. They are Exponential Moving Average applied to the momentum curve.
The Short Signal Line follows the main curve and it gives the first crossing for an entry signal. Of course, this is useful only when there are the right condition for an entry point.
Instead, the Long Signal Line exists to be a trending indicator. When the main curve is approaching it, rebounds, the shortening of the thrust, can mark a changing. Following the thrust, these curves become closer and closer for some waves. This becomes better visible by the plotting of the Histogram.
The Histogram shows the difference between the main curve and the Long Signal Line. The distance between those curves becomes relevant and helpful in many circumstances. This highlights the changing in the Strength or Weakness of the trend.
Short and Long Signal Curves can have a partial plotting. This reduces the impact of those curves on screen. The script can show them only when they give a relevant visual impact for the trading practice.
Coloring
GA Momentum Script colors curve and price bars. It highlights conditions where the price is Overbought or Oversold. But it highlights also divergences with labels and colored lines.
The script plots colors on bars with extended prices. Besides, the script plots colors on bars that are the ending of divergences
GA Momentum script colors the price bars using the same criteria applied to color curves. Color used on the Curve are the same used on the price bars.
True Strength Curve and Momentum Curves color price bars. This happens for the entire Trend Strength. Then the prevailing of the Buying Pressure or Bearish Pressure is also visible on bars. This occurs by the persistent green or red colors according to Pressure and Trend.
Alerts
GA Momentum provides 2 alerts for Bearish and Bullish Signals. Both uses the crossing of Short and Long Signals in the same direction.
Note: I restrict access to the tool.
Regards
Girolamo Aloe
Founder of Profiting Me
Fuzzy SMA Trend Analyzer (experimental)[FibonacciFlux]Fuzzy SMA Trend Analyzer (Normalized): Advanced Market Trend Detection Using Fuzzy Logic Theory
Elevate your technical analysis with institutional-grade fuzzy logic implementation
Research Genesis & Conceptual Framework
This indicator represents the culmination of extensive research into applying fuzzy logic theory to financial markets. While traditional technical indicators often produce binary outcomes, market conditions exist on a continuous spectrum. The Fuzzy SMA Trend Analyzer addresses this limitation by implementing a sophisticated fuzzy logic system that captures the nuanced, multi-dimensional nature of market trends.
Core Fuzzy Logic Principles
At the heart of this indicator lies fuzzy logic theory - a mathematical framework designed to handle imprecision and uncertainty:
// Improved fuzzy_triangle function with guard clauses for NA and invalid parameters.
fuzzy_triangle(val, left, center, right) =>
if na(val) or na(left) or na(center) or na(right) or left > center or center > right // Guard checks
0.0
else if left == center and center == right // Crisp set (single point)
val == center ? 1.0 : 0.0
else if left == center // Left-shoulder shape (ramp down from 1 at center to 0 at right)
val >= right ? 0.0 : val <= center ? 1.0 : (right - val) / (right - center)
else if center == right // Right-shoulder shape (ramp up from 0 at left to 1 at center)
val <= left ? 0.0 : val >= center ? 1.0 : (val - left) / (center - left)
else // Standard triangle
math.max(0.0, math.min((val - left) / (center - left), (right - val) / (right - center)))
This implementation of triangular membership functions enables the indicator to transform crisp numerical values into degrees of membership in linguistic variables like "Large Positive" or "Small Negative," creating a more nuanced representation of market conditions.
Dynamic Percentile Normalization
A critical innovation in this indicator is the implementation of percentile-based normalization for SMA deviation:
// ----- Deviation Scale Estimation using Percentile -----
// Calculate the percentile rank of the *absolute* deviation over the lookback period.
// This gives an estimate of the 'typical maximum' deviation magnitude recently.
diff_abs_percentile = ta.percentile_linear_interpolation(math.abs(raw_diff), normLookback, percRank) + 1e-10
// ----- Normalize the Raw Deviation -----
// Divide the raw deviation by the estimated 'typical max' magnitude.
normalized_diff = raw_diff / diff_abs_percentile
// ----- Clamp the Normalized Deviation -----
normalized_diff_clamped = math.max(-3.0, math.min(3.0, normalized_diff))
This percentile normalization approach creates a self-adapting system that automatically calibrates to different assets and market regimes. Rather than using fixed thresholds, the indicator dynamically adjusts based on recent volatility patterns, significantly enhancing signal quality across diverse market environments.
Multi-Factor Fuzzy Rule System
The indicator implements a comprehensive fuzzy rule system that evaluates multiple technical factors:
SMA Deviation (Normalized): Measures price displacement from the Simple Moving Average
Rate of Change (ROC): Captures price momentum over a specified period
Relative Strength Index (RSI): Assesses overbought/oversold conditions
These factors are processed through a sophisticated fuzzy inference system with linguistic variables:
// ----- 3.1 Fuzzy Sets for Normalized Deviation -----
diffN_LP := fuzzy_triangle(normalized_diff_clamped, 0.7, 1.5, 3.0) // Large Positive (around/above percentile)
diffN_SP := fuzzy_triangle(normalized_diff_clamped, 0.1, 0.5, 0.9) // Small Positive
diffN_NZ := fuzzy_triangle(normalized_diff_clamped, -0.2, 0.0, 0.2) // Near Zero
diffN_SN := fuzzy_triangle(normalized_diff_clamped, -0.9, -0.5, -0.1) // Small Negative
diffN_LN := fuzzy_triangle(normalized_diff_clamped, -3.0, -1.5, -0.7) // Large Negative (around/below percentile)
// ----- 3.2 Fuzzy Sets for ROC -----
roc_HN := fuzzy_triangle(roc_val, -8.0, -5.0, -2.0)
roc_WN := fuzzy_triangle(roc_val, -3.0, -1.0, -0.1)
roc_NZ := fuzzy_triangle(roc_val, -0.3, 0.0, 0.3)
roc_WP := fuzzy_triangle(roc_val, 0.1, 1.0, 3.0)
roc_HP := fuzzy_triangle(roc_val, 2.0, 5.0, 8.0)
// ----- 3.3 Fuzzy Sets for RSI -----
rsi_L := fuzzy_triangle(rsi_val, 0.0, 25.0, 40.0)
rsi_M := fuzzy_triangle(rsi_val, 35.0, 50.0, 65.0)
rsi_H := fuzzy_triangle(rsi_val, 60.0, 75.0, 100.0)
Advanced Fuzzy Inference Rules
The indicator employs a comprehensive set of fuzzy rules that encode expert knowledge about market behavior:
// --- Fuzzy Rules using Normalized Deviation (diffN_*) ---
cond1 = math.min(diffN_LP, roc_HP, math.max(rsi_M, rsi_H)) // Strong Bullish: Large pos dev, strong pos roc, rsi ok
strength_SB := math.max(strength_SB, cond1)
cond2 = math.min(diffN_SP, roc_WP, rsi_M) // Weak Bullish: Small pos dev, weak pos roc, rsi mid
strength_WB := math.max(strength_WB, cond2)
cond3 = math.min(diffN_SP, roc_NZ, rsi_H) // Weakening Bullish: Small pos dev, flat roc, rsi high
strength_N := math.max(strength_N, cond3 * 0.6) // More neutral
strength_WB := math.max(strength_WB, cond3 * 0.2) // Less weak bullish
This rule system evaluates multiple conditions simultaneously, weighting them by their degree of membership to produce a comprehensive trend assessment. The rules are designed to identify various market conditions including strong trends, weakening trends, potential reversals, and neutral consolidations.
Defuzzification Process
The final step transforms the fuzzy result back into a crisp numerical value representing the overall trend strength:
// --- Step 6: Defuzzification ---
denominator = strength_SB + strength_WB + strength_N + strength_WBe + strength_SBe
if denominator > 1e-10 // Use small epsilon instead of != 0.0 for float comparison
fuzzyTrendScore := (strength_SB * STRONG_BULL +
strength_WB * WEAK_BULL +
strength_N * NEUTRAL +
strength_WBe * WEAK_BEAR +
strength_SBe * STRONG_BEAR) / denominator
The resulting FuzzyTrendScore ranges from -1 (strong bearish) to +1 (strong bullish), providing a smooth, continuous evaluation of market conditions that avoids the abrupt signal changes common in traditional indicators.
Advanced Visualization with Rainbow Gradient
The indicator incorporates sophisticated visualization using a rainbow gradient coloring system:
// Normalize score to for gradient function
normalizedScore = na(fuzzyTrendScore) ? 0.5 : math.max(0.0, math.min(1.0, (fuzzyTrendScore + 1) / 2))
// Get the color based on gradient setting and normalized score
final_color = get_gradient(normalizedScore, gradient_type)
This color-coding system provides intuitive visual feedback, with color intensity reflecting trend strength and direction. The gradient can be customized between Red-to-Green or Red-to-Blue configurations based on user preference.
Practical Applications
The Fuzzy SMA Trend Analyzer excels in several key applications:
Trend Identification: Precisely identifies market trend direction and strength with nuanced gradation
Market Regime Detection: Distinguishes between trending markets and consolidation phases
Divergence Analysis: Highlights potential reversals when price action and fuzzy trend score diverge
Filter for Trading Systems: Provides high-quality trend filtering for other trading strategies
Risk Management: Offers early warning of potential trend weakening or reversal
Parameter Customization
The indicator offers extensive customization options:
SMA Length: Adjusts the baseline moving average period
ROC Length: Controls momentum sensitivity
RSI Length: Configures overbought/oversold sensitivity
Normalization Lookback: Determines the adaptive calculation window for percentile normalization
Percentile Rank: Sets the statistical threshold for deviation normalization
Gradient Type: Selects the preferred color scheme for visualization
These parameters enable fine-tuning to specific market conditions, trading styles, and timeframes.
Acknowledgments
The rainbow gradient visualization component draws inspiration from LuxAlgo's "Rainbow Adaptive RSI" (used under CC BY-NC-SA 4.0 license). This implementation of fuzzy logic in technical analysis builds upon Fermi estimation principles to overcome the inherent limitations of crisp binary indicators.
This indicator is shared under Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license.
Remember that past performance does not guarantee future results. Always conduct thorough testing before implementing any technical indicator in live trading.
S&P 500 Sector StrengthsThe "S&P 500 Sector Strengths" indicator is a sophisticated tool designed to provide traders and investors with a comprehensive view of the relative performance of various sectors within the S&P 500 index. This indicator utilizes the True Strength Index (TSI) to measure and compare the strength of different sectors, offering valuable insights into market trends and sector rotations.
At its core, the indicator calculates the TSI for each sector using price data obtained through the request.security() function. The TSI, a momentum oscillator, is computed using a user-defined smoothing period, allowing for customization based on individual preferences and trading styles. The resulting TSI values for each sector are then plotted on the chart, creating a visual representation of sector strengths.
To use this indicator effectively, traders should focus on comparing the movements of different sector lines. Sectors with lines moving higher are showing increasing strength, while those with descending lines are exhibiting weakness. This comparative analysis can help identify potential investment opportunities and sector rotations. Additionally, when multiple sector lines move in tandem, it may signal a broader market trend.
The indicator includes dashed lines at 0.5 and -0.5, serving as reference points for overbought and oversold conditions. Sectors with TSI values above 0.5 might be considered overbought, suggesting caution, while those below -0.5 could be viewed as oversold, potentially indicating buying opportunities.
One of the key advantages of this indicator is its flexibility. Users can toggle the visibility of individual sectors and customize their colors, allowing for a tailored analysis experience. This feature is particularly useful when focusing on specific sectors or reducing chart clutter for clearer visualization.
The indicator's ability to provide a comprehensive overview of all major S&P 500 sectors in a single chart is a significant benefit. This consolidated view enables quick comparisons and helps in identifying relative strengths and weaknesses across sectors. Such insights can be invaluable for portfolio allocation decisions and in spotting emerging market trends.
Moreover, the dynamic legend feature enhances the indicator's usability. It automatically updates to display only the visible sectors, improving chart readability and interpretation.
By leveraging this indicator, market participants can gain a deeper understanding of sector dynamics within the S&P 500. This enhanced perspective can lead to more informed decision-making in sector allocation strategies and individual stock selection. The indicator's ability to potentially detect early trends by comparing sector strengths adds another layer of value, allowing users to position themselves ahead of broader market movements.
In conclusion, the "S&P 500 Sector Strengths" indicator is a powerful tool that combines technical analysis with sector comparison. Its user-friendly interface, customizable features, and comprehensive sector coverage make it an valuable asset for traders and investors seeking to navigate the complexities of the S&P 500 market with greater confidence and insight.
Uptrick: RSI Histogram
1. **Introduction to the RSI and Moving Averages**
2. **Detailed Breakdown of the Uptrick: RSI Histogram**
3. **Calculation and Formula**
4. **Visual Representation**
5. **Customization and User Settings**
6. **Trading Strategies and Applications**
7. **Risk Management**
8. **Case Studies and Examples**
9. **Comparison with Other Indicators**
10. **Advanced Usage and Tips**
---
## 1. Introduction to the RSI and Moving Averages
### **1.1 Relative Strength Index (RSI)**
The Relative Strength Index (RSI) is a momentum oscillator developed by J. Welles Wilder and introduced in his 1978 book "New Concepts in Technical Trading Systems." It is widely used in technical analysis to measure the speed and change of price movements.
**Purpose of RSI:**
- **Identify Overbought/Oversold Conditions:** RSI values range from 0 to 100. Traditionally, values above 70 are considered overbought, while values below 30 are considered oversold. These thresholds help traders identify potential reversal points in the market.
- **Trend Strength Measurement:** RSI also indicates the strength of a trend. High RSI values suggest strong bullish momentum, while low values indicate bearish momentum.
**Calculation of RSI:**
1. **Calculate the Average Gain and Loss:** Over a specified period (e.g., 14 days), calculate the average gain and loss.
2. **Compute the Relative Strength (RS):** RS is the ratio of average gain to average loss.
3. **RSI Formula:** RSI = 100 - (100 / (1 + RS))
### **1.2 Moving Averages (MA)**
Moving Averages are used to smooth out price data and identify trends by filtering out short-term fluctuations. Two common types are:
**Simple Moving Average (SMA):** The average of prices over a specified number of periods.
**Exponential Moving Average (EMA):** A type of moving average that gives more weight to recent prices, making it more responsive to recent price changes.
**Smoothed Moving Average (SMA):** Used to reduce the impact of volatility and provide a clearer view of the underlying trend. The RMA, or Running Moving Average, used in the USH script is similar to an EMA but based on the average of RSI values.
## 2. Detailed Breakdown of the Uptrick: RSI Histogram
### **2.1 Indicator Overview**
The Uptrick: RSI Histogram (USH) is a technical analysis tool that combines the RSI with a moving average to create a histogram that reflects momentum and trend strength.
**Key Components:**
- **RSI Calculation:** Determines the relative strength of price movements.
- **Moving Average Application:** Smooths the RSI values to provide a clearer trend indication.
- **Histogram Plotting:** Visualizes the deviation of the smoothed RSI from a neutral level.
### **2.2 Indicator Purpose**
The primary purpose of the USH is to provide a clear visual representation of the market's momentum and trend strength. It helps traders identify:
- **Bullish and Bearish Trends:** By showing how far the smoothed RSI is from the neutral 50 level.
- **Potential Reversal Points:** By highlighting changes in momentum.
### **2.3 Indicator Design**
**RSI Moving Average (RSI MA):** The RSI MA is a smoothed version of the RSI, calculated using a running moving average. This smooths out short-term fluctuations and provides a clearer indication of the underlying trend.
**Histogram Calculation:**
- **Neutral Level:** The histogram is plotted relative to the neutral level of 50. This level represents a balanced market where neither bulls nor bears have dominance.
- **Histogram Values:** The histogram bars show the difference between the RSI MA and the neutral level. Positive values indicate bullish momentum, while negative values indicate bearish momentum.
## 3. Calculation and Formula
### **3.1 RSI Calculation**
The RSI calculation involves:
1. **Average Gain and Loss:** Calculated over the specified length (e.g., 14 periods).
2. **Relative Strength (RS):** RS = Average Gain / Average Loss.
3. **RSI Formula:** RSI = 100 - (100 / (1 + RS)).
### **3.2 Moving Average Calculation**
For the USH indicator, the RSI is smoothed using a running moving average (RMA). The RMA formula is similar to that of the EMA but is based on averaging RSI values over the specified length.
### **3.3 Histogram Calculation**
The histogram value is calculated as:
- **Histogram Value = RSI MA - 50**
**Plotting the Histogram:**
- **Positive Histogram Values:** Indicate that the RSI MA is above the neutral level, suggesting bullish momentum.
- **Negative Histogram Values:** Indicate that the RSI MA is below the neutral level, suggesting bearish momentum.
## 4. Visual Representation
### **4.1 Histogram Bars**
The histogram is plotted as bars on the chart:
- **Bullish Bars:** Colored green when the RSI MA is above 50.
- **Bearish Bars:** Colored red when the RSI MA is below 50.
### **4.2 Customization Options**
Traders can customize:
- **RSI Length:** Adjust the length of the RSI calculation to match their trading style.
- **Bull and Bear Colors:** Choose colors for histogram bars to enhance visual clarity.
### **4.3 Interpretation**
**Bullish Signal:** A histogram bar that moves from red to green indicates a potential shift to a bullish trend.
**Bearish Signal:** A histogram bar that moves from green to red indicates a potential shift to a bearish trend.
## 5. Customization and User Settings
### **5.1 Adjusting RSI Length**
The length parameter determines the number of periods over which the RSI is calculated and smoothed. Shorter lengths make the RSI more sensitive to price changes, while longer lengths provide a smoother view of trends.
### **5.2 Color Settings**
Traders can adjust:
- **Bull Color:** Color of histogram bars indicating bullish momentum.
- **Bear Color:** Color of histogram bars indicating bearish momentum.
**Customization Benefits:**
- **Visual Clarity:** Traders can choose colors that stand out against their chart’s background.
- **Personal Preference:** Adjust settings to match individual trading styles and preferences.
## 6. Trading Strategies and Applications
### **6.1 Trend Following**
**Identifying Entry Points:**
- **Bullish Entry:** When the histogram changes from red to green, it signals a potential entry point for long positions.
- **Bearish Entry:** When the histogram changes from green to red, it signals a potential entry point for short positions.
**Trend Confirmation:** The histogram helps confirm the strength of a trend. Strong, consistent green bars indicate robust bullish momentum, while strong, consistent red bars indicate robust bearish momentum.
### **6.2 Swing Trading**
**Momentum Analysis:**
- **Entry Signals:** Look for significant shifts in the histogram to time entries. A shift from bearish to bullish (red to green) indicates potential for upward movement.
- **Exit Signals:** A shift from bullish to bearish (green to red) suggests a potential weakening of the trend, signaling an exit or reversal point.
### **6.3 Range Trading**
**Market Conditions:**
- **Consolidation:** The histogram close to zero suggests a range-bound market. Traders can use this information to identify support and resistance levels.
- **Breakout Potential:** A significant move away from the neutral level may indicate a potential breakout from the range.
### **6.4 Risk Management**
**Stop-Loss Placement:**
- **Bullish Positions:** Place stop-loss orders below recent support levels when the histogram is green.
- **Bearish Positions:** Place stop-loss orders above recent resistance levels when the histogram is red.
**Position Sizing:** Adjust position sizes based on the strength of the histogram signals. Strong trends (indicated by larger histogram bars) may warrant larger positions, while weaker signals suggest smaller positions.
## 7. Risk Management
### **7.1 Importance of Risk Management**
Effective risk management is crucial for long-term trading success. It involves protecting capital, managing losses, and optimizing trade setups.
### **7.2 Using USH for Risk Management**
**Stop-Loss and Take-Profit Levels:**
- **Stop-Loss Orders:** Use the histogram to set stop-loss levels based on trend strength. For instance, place stops below support levels in bullish trends and above resistance levels in bearish trends.
- **Take-Profit Targets:** Adjust take-profit levels based on histogram changes. For example, lock in profits as the histogram starts to shift from green to red.
**Position Sizing:**
- **Trend Strength:** Scale position sizes based on the strength of histogram signals. Larger histogram bars indicate stronger trends, which may justify larger positions.
- **Volatility:** Consider market volatility and adjust position sizes to mitigate risk.
## 8. Case Studies and Examples
### **8.1 Example 1: Bullish Trend**
**Scenario:** A trader notices a transition from red to green histogram bars.
**Analysis:**
- **Entry Point:** The transition indicates a potential bullish trend. The trader decides to enter a long position.
- **Stop-Loss:** Set stop-loss below recent support levels.
- **Take-Profit:** Consider taking profits as the histogram moves back towards zero or turns red.
**Outcome:** The bullish trend continues, and the histogram remains green, providing a profitable trade setup.
### **8.2 Example 2: Bearish Trend**
**Scenario:** A trader observes a transition from green to red histogram bars.
**Analysis:**
- **Entry Point:** The transition suggests a potential
bearish trend. The trader decides to enter a short position.
- **Stop-Loss:** Set stop-loss above recent resistance levels.
- **Take-Profit:** Consider taking profits as the histogram approaches zero or shifts to green.
**Outcome:** The bearish trend continues, and the histogram remains red, resulting in a successful trade.
## 9. Comparison with Other Indicators
### **9.1 RSI vs. USH**
**RSI:** Measures momentum and identifies overbought/oversold conditions.
**USH:** Builds on RSI by incorporating a moving average and histogram to provide a clearer view of trend strength and momentum.
### **9.2 RSI vs. MACD**
**MACD (Moving Average Convergence Divergence):** A trend-following momentum indicator that uses moving averages to identify changes in trend direction.
**Comparison:**
- **USH:** Provides a smoothed RSI perspective and visual histogram for trend strength.
- **MACD:** Offers signals based on the convergence and divergence of moving averages.
### **9.3 RSI vs. Stochastic Oscillator**
**Stochastic Oscillator:** Measures the level of the closing price relative to the high-low range over a specified period.
**Comparison:**
- **USH:** Focuses on smoothed RSI values and histogram representation.
- **Stochastic Oscillator:** Provides overbought/oversold signals and potential reversals based on price levels.
## 10. Advanced Usage and Tips
### **10.1 Combining Indicators**
**Multi-Indicator Strategies:** Combine the USH with other technical indicators (e.g., Moving Averages, Bollinger Bands) for a comprehensive trading strategy.
**Confirmation Signals:** Use the USH to confirm signals from other indicators. For instance, a bullish histogram combined with a moving average crossover may provide a stronger buy signal.
### **10.2 Customization Tips**
**Adjust RSI Length:** Experiment with different RSI lengths to match various market conditions and trading styles.
**Color Preferences:** Choose histogram colors that enhance visibility and align with personal preferences.
### **10.3 Continuous Learning**
**Backtesting:** Regularly backtest the USH with historical data to refine strategies and improve accuracy.
**Education:** Stay updated with trading education and adapt strategies based on market changes and personal experiences.
ZenAlgo - ADXThis open-source indicator builds upon the official Average Directional Index (ADX) implementation by TradingView. It preserves the core logic of the original ADX while introducing additional visualization features, configurability, and analytical overlays to assist with directional strength analysis.
Core Calculation
The script computes the ADX, +DI, and -DI based on smoothed directional movement and true range over a user-defined length. The smoothing is performed using Wilder’s method, as in the original implementation.
True Range is calculated from the current high, low, and previous close.
Directional Movement components (+DM, -DM) are derived by comparing the change in highs and lows between consecutive bars.
These values are then smoothed, and the +DI and -DI are expressed as percentages of the smoothed True Range.
The difference between +DI and -DI is normalized to derive DX, which is further smoothed to yield the ADX value.
The indicator includes a selectable signal line (SMA or EMA) applied to the ADX for crossover-based visualization.
Visualization Enhancements
Several plots and conditions have been added to improve interpretability:
Color-coded histograms and lines visualize DI relative to a configurable threshold (default: 25). Colors follow the ZenAlgo color scheme.
Dynamic opacity and gradient coloring are used for both ADX and DI components, allowing users to distinguish weak/moderate/strong directional trends visually.
Mirrored ADX is internally calculated for certain overlays but not directly plotted.
The script also provides small circles and diamonds to highlight:
Crossovers between ADX and its signal line.
DI crossing above or below the 25 threshold.
Rising ADX confirmed by rising DI values, with point size reflecting ADX strength.
Divergence Detection
The indicator includes optional detection of fractal-based divergences on the DI curve:
Regular and hidden bullish and bearish divergences are identified based on relative fractal highs/lows in both price and DI.
Detected divergences are optionally labeled with 'R' (Regular) or 'H' (Hidden), and color-coded accordingly.
Fractal points are defined using 5-bar patterns to ensure consistency and reduce false positives.
ADX/DI Table
When enabled, a floating table displays live values and summaries:
ADX value , trend direction (rising/falling), and qualitative strength.
DI composite , trend direction, and relative strength.
Contextual power dynamics , describing whether bulls or bears are gaining or losing strength.
The background colors of the table reflect current trend strength and direction.
Interpretation Guidelines
ADX indicates the strength of a trend, regardless of its direction. Values below 20 are often considered weak, while those above 40 suggest strong trending conditions.
+DI and -DI represent bullish and bearish directional movements, respectively. Crossovers between them are used to infer trend direction.
When ADX is rising and either +DI or -DI is dominant and increasing, the trend is likely strengthening.
Divergences between DI and price may suggest potential reversals but should be interpreted cautiously and not in isolation.
The threshold line (default 25) provides a basic filter for ignoring low-strength conditions. This can be adjusted depending on the market or timeframe.
Added Value over Existing Indicators
Fully color-graded ADX and DI display for better visual clarity.
Optional signal MA over ADX with crossover markers.
Rich contextual labeling for both divergence and threshold events.
Power dynamics commentary and live table help users contextualize current momentum.
Customizable options for smoothing type, divergence display, table position, and visual offsets.
These additions aim to improve situational awareness without altering the fundamental meaning of ADX/DI values.
Limitations and Disclaimers
As with any ADX-based tool, this indicator does not indicate market direction alone —it measures strength, not trend bias.
Divergence detection relies on fractal patterns and may lag or produce false positives in sideways markets.
Signal MA crossovers and DI threshold breaks are not entry signals , but contextual markers that may assist with timing or filtering other systems.
The table text and labels are for visual assistance and do not replace proper technical analysis or market context.
Adaptive Regression Channel [MissouriTim]The Adaptive Regression Channel (ARC) is a technical indicator designed to empower traders with a clear, adaptable, and precise view of market trends and price boundaries. By blending advanced statistical techniques with real-time market data, ARC delivers a comprehensive tool that dynamically adjusts to price action, volatility, volume, and momentum. Whether you’re navigating the fast-paced world of cryptocurrencies, the steady trends of stocks, or the intricate movements of FOREX pairs, ARC provides a robust framework for identifying opportunities and managing risk.
Core Components
1. Color-Coded Regression Line
ARC’s centerpiece is a linear regression line derived from a Weighted Moving Average (WMA) of closing prices. This line adapts its calculation period based on market volatility (via ATR) and is capped between a minimum of 20 bars and a maximum of 1.5 times the user-defined base length (default 100). Visually, it shifts colors to reflect trend direction: green for an upward slope (bullish) and red for a downward slope (bearish), offering an instant snapshot of market sentiment.
2. Dynamic Residual Channels
Surrounding the regression line are upper (red) and lower (green) channels, calculated using the standard deviation of residuals—the difference between actual closing prices and the regression line. This approach ensures the channels precisely track how closely prices follow the trend, rather than relying solely on overall price volatility. The channel width is dynamically adjusted by a multiplier that factors in:
Volatility: Measured through the Average True Range (ATR), widening channels during turbulent markets.
Trend Strength: Based on the regression slope, expanding channels in strong trends and contracting them in consolidation phases.
3. Volume-Weighted Moving Average (VWMA)
Plotted in orange, the VWMA overlays a volume-weighted price trend, emphasizing movements backed by significant trading activity. This complements the regression line, providing additional confirmation of trend validity and potential breakout strength.
4. Scaled RSI Overlay
ARC features a Relative Strength Index (RSI) overlay, plotted in purple and scaled to hover closely around the regression line. This compact display reflects momentum shifts within the trend’s context, keeping RSI visible on the price chart without excessive swings. User-defined overbought (default 70) and oversold (default 30) levels offer reference points for momentum analysis."
Technical Highlights
ARC leverages a volatility-adjusted lookback period, residual-based channel construction, and multi-indicator integration to achieve high accuracy. Its parameters—such as base length, channel width, ATR period, and RSI length—are fully customizable, allowing traders to tailor it to their specific needs.
Why Choose ARC?
ARC stands out for its adaptability and precision. The residual-based channels offer tighter, more relevant support and resistance levels compared to standard volatility measures, while the dynamic adjustments ensure it performs well in both trending and ranging markets. The inclusion of VWMA and scaled RSI adds depth, merging trend, volume, and momentum into a single, cohesive overlay. For traders seeking a versatile, all-in-one indicator, ARC delivers actionable insights with minimal noise.
Best Ways to Use the Adaptive Regression Channel (ARC)
The Adaptive Regression Channel (ARC) is a flexible tool that supports a variety of trading strategies, from trend-following to breakout detection. Below are the most effective ways to use ARC, along with practical tips for maximizing its potential. Adjustments to its settings may be necessary depending on the timeframe (e.g., intraday vs. daily) and the asset being traded (e.g., stocks, FOREX, cryptocurrencies), as each market exhibits unique volatility and behavior.
1. Trend Following
• How to Use: Rely on the regression line’s color to guide your trades. A green line (upward slope) signals a bullish trend—consider entering or holding long positions. A red line (downward slope) indicates a bearish trend—look to short or exit longs.
• Best Practice: Confirm the trend with the VWMA (orange line). Price above the VWMA in a green uptrend strengthens the bullish case; price below in a red downtrend reinforces bearish momentum.
• Adjustment: For short timeframes like 15-minute crypto charts, lower the Base Regression Length (e.g., to 50) for quicker trend detection. For weekly stock charts, increase it (e.g., to 200) to capture broader movements.
2. Channel-Based Trades
• How to Use: Use the upper channel (red) as resistance and the lower channel (green) as support. Buy when the price bounces off the lower channel in an uptrend, and sell or short when it rejects the upper channel in a downtrend.
• Best Practice: Check the scaled RSI (purple line) for momentum cues. A low RSI (e.g., near 30) at the lower channel suggests a stronger buy signal; a high RSI (e.g., near 70) at the upper channel supports a sell.
• Adjustment: In volatile crypto markets, widen the Base Channel Width Coefficient (e.g., to 2.5) to reduce false signals. For stable FOREX pairs (e.g., EUR/USD), a narrower width (e.g., 1.5) may work better.
3. Breakout Detection
• How to Use: Watch for price breaking above the upper channel (bullish breakout) or below the lower channel (bearish breakout). These moves often signal strong momentum shifts.
• Best Practice: Validate breakouts with VWMA position—price above VWMA for bullish breaks, below for bearish—and ensure the regression line’s slope aligns (green for up, red for down).
• Adjustment: For fast-moving assets like crypto on 1-hour charts, shorten ATR Length (e.g., to 7) to make channels more reactive. For stocks on daily charts, keep it at 14 or higher for reliability.
4. Momentum Analysis
• How to Use: The scaled RSI overlay shows momentum relative to the regression line. Rising RSI in a green uptrend confirms bullish strength; falling RSI in a red downtrend supports bearish pressure.
• Best Practice: Look for RSI divergences—e.g., price hitting new highs at the upper channel while RSI flattens or drops could signal an impending reversal.
• Adjustment: Reduce RSI Length (e.g., to 7) for intraday trading in FOREX or crypto to catch short-term momentum shifts. Increase it (e.g., to 21) for longer-term stock trades.
5. Range Trading
• How to Use: When the regression line’s slope is near zero (flat) and channels are tight, ARC indicates a ranging market. Buy near the lower channel and sell near the upper channel, targeting the regression line as the mean price.
• Best Practice: Ensure VWMA hovers close to the regression line to confirm the range-bound state.
• Adjustment: For low-volatility stocks on daily charts, use a moderate Base Regression Length (e.g., 100) and tight Base Channel Width (e.g., 1.5). For choppy crypto markets, test shorter settings.
Optimization Strategies
• Timeframe Customization: Adjust ARC’s parameters to match your trading horizon. Short timeframes (e.g., 1-minute to 1-hour) benefit from lower Base Regression Length (20–50) and ATR Length (7–10) for agility, while longer timeframes (e.g., daily, weekly) favor higher values (100–200 and 14–21) for stability.
• Asset-Specific Tuning:
○ Stocks: Use longer lengths (e.g., 100–200) and moderate widths (e.g., 1.8) for stable equities; tweak ATR Length based on sector volatility (shorter for tech, longer for utilities).
○ FOREX: Set Base Regression Length to 50–100 and Base Channel Width to 1.5–2.0 for smoother trends; adjust RSI Length (e.g., 10–14) based on pair volatility.
○ Crypto: Opt for shorter lengths (e.g., 20–50) and wider widths (e.g., 2.0–3.0) to handle rapid price swings; use a shorter ATR Length (e.g., 7) for quick adaptation.
• Backtesting: Test ARC on historical data for your asset and timeframe to optimize settings. Evaluate how often price respects channels and whether breakouts yield profitable trades.
• Enhancements: Pair ARC with volume surges, key support/resistance levels, or candlestick patterns (e.g., doji at channel edges) for higher-probability setups.
Practical Considerations
ARC’s adaptability makes it suitable for diverse markets, but its performance hinges on proper calibration. Cryptocurrencies, with their high volatility, may require shorter, wider settings to capture rapid moves, while stocks on longer timeframes benefit from broader, smoother configurations. FOREX pairs often fall in between, depending on their inherent volatility. Experiment with the adjustable parameters to align ARC with your trading style and market conditions, ensuring it delivers the precision and reliability you need.
Professional GBP/JPY Analysis ToolThe foundation of professional trading begins with analyzing individual currencies first, not just currency pairs. By understanding the relative strength of each currency in the pair, traders can anticipate potential market moves with greater accuracy.
This indicator simplifies that process by:
Analyzing Individual Currency Strength:
The strength of GBP is calculated by averaging its performance across seven major GBP currency pairs:
GBP/EUR
GBP/USD
GBP/CAD
GBP/CHF
GBP/AUD
GBP/NZD
GBP/JPY
The strength of JPY is calculated by averaging its performance across seven major JPY currency pairs:
JPY/USD
JPY/CAD
JPY/EUR
JPY/GBP
JPY/AUD
JPY/NZD
JPY/CHF
The values are normalized to allow direct comparison on the same scale.
Identifying Correlation Between GBP and JPY:
The histogram displays the correlation between GBP and JPY strength:
Positive Correlation (Green): Both GBP and JPY are trending up or down together, indicating a less strong trend. This is a market condition to avoid, as both currencies are strengthening or weakening simultaneously.
Negative Correlation (Red): One currency is strong while the other is weak, indicating a stronger trend in GBP/JPY. This scenario presents a better trading opportunity, as you are trading one strong currency against one weak currency, amplifying the potential for a clearer price movement in GBP/JPY.
Visualizing Long/Short Bias:
GBP Strength > JPY Strength: Bullish bias for GBP/JPY (green background).
JPY Strength > GBP Strength: Bearish bias for GBP/JPY (red background).
This indicator equips traders with a deeper understanding of GBP/JPY dynamics by first breaking down the individual currencies. With insights into currency strength, their correlation, and the optimal conditions for trading, it provides a solid foundation for making informed trading decisions.
How to Use:
Check the Histogram for Correlation:
Wait for the histogram to be red. This indicates that GBP and JPY are moving in opposite directions, signaling a stronger trend where you're trading a strong currency against a weak one—a more favorable setup.
Align with Background Color for Confirmation:
Wait for the background color to match your trade plan:
Green Background: Confirms a bullish bias, supporting long positions on the GBP/JPY pair.
Red Background: Confirms a bearish bias, supporting short positions on the GBP/JPY pair.
By following these steps, you can identify stronger trade opportunities and align them with your strategy.
WaveTrend With Divs & RSI(STOCH) Divs by WeloTradesWaveTrend with Divergences & RSI(STOCH) Divergences by WeloTrades
Overview
The "WaveTrend With Divergences & RSI(STOCH) Divergences" is an advanced Pine Script™ indicator designed for TradingView, offering a multi-dimensional analysis of market conditions. This script integrates several technical indicators—WaveTrend, Money Flow Index (MFI), RSI, and Stochastic RSI—into a cohesive tool that identifies both regular and hidden divergences across these indicators. These divergences can indicate potential market reversals and provide critical trading opportunities.
This indicator is not just a simple combination of popular tools; it offers extensive customization options, organized data presentation, and valuable trading signals that are easy to interpret. Whether you're a day trader or a long-term investor, this script enhances your ability to make informed decisions.
Originality and Usefulness
The originality of this script lies in its integration and the synergy it creates among the indicators used. Rather than merely combining multiple indicators, this script allows them to work together, enhancing each other's strengths. For example, by identifying divergences across WaveTrend, RSI, and Stochastic RSI simultaneously, the script provides multiple layers of confirmation, which reduces the likelihood of false signals and increases the reliability of trading signals.
The usefulness of this script is apparent in its ability to offer a consolidated view of market dynamics. It not only simplifies the analytical process by combining different indicators but also provides deeper insights through its divergence detection features. This comprehensive approach is designed to help traders identify potential market reversals, confirm trends, and ultimately make more informed trading decisions.
How the Components Work Together
1. Cross-Validation of Signals
WaveTrend: This indicator is primarily used to identify overbought and oversold conditions, as well as potential buy and sell signals. WaveTrend's ability to smooth price data and reduce noise makes it a reliable tool for identifying trend reversals.
RSI & Stochastic RSI: These momentum oscillators are used to measure the speed and change of price movements. While RSI identifies general overbought and oversold conditions, Stochastic RSI offers a more granular view by tracking the RSI’s level relative to its high-low range over a period of time. When these indicators align with WaveTrend signals, it adds a layer of confirmation that enhances the reliability of the signals.
Money Flow Index (MFI): This volume-weighted indicator assesses the inflow and outflow of money in an asset, giving insights into buying and selling pressure. By analyzing the MFI alongside WaveTrend and RSI indicators, the script can cross-validate signals, ensuring that buy or sell signals are supported by actual market volume.
Example Bullish scenario:
When a bullish divergence is detected on the RSI and confirmed by a corresponding bullish signal on the WaveTrend, along with an increasing Money Flow Index, the probability of a successful trade setup increases. This cross-validation minimizes the risk of acting on false signals, which might occur when relying on a single indicator.
Example Bearish scenario:
When a bearish divergence is detected on the RSI and confirmed by a corresponding bearish signal on the WaveTrend, along with an decreasing Money Flow Index, the probability of a successful trade setup increases. This cross-validation minimizes the risk of acting on false signals, which might occur when relying on a single indicator.
2. Divergence Detection and Market Reversals
Regular Divergences: Occur when the price action and an indicator (like RSI or WaveTrend) move in opposite directions. Regular bullish divergence signals a potential upward reversal when the price makes a lower low while the indicator makes a higher low. Conversely, regular bearish divergence suggests a downward reversal when the price makes a higher high, but the indicator makes a lower high.
Hidden Divergences: These occur when the price action and indicator move in the same direction, but with different momentum. Hidden bullish divergence suggests the continuation of an uptrend, while hidden bearish divergence suggests the continuation of a downtrend. By detecting these divergences across multiple indicators, the script identifies potential trend reversals or continuations with greater accuracy.
Example: The script might detect a regular bullish divergence on the WaveTrend while simultaneously identifying a hidden bullish divergence on the RSI. This combination suggests that while a trend reversal is possible, the overall market sentiment remains bullish, providing a nuanced view of the market.
A Regular Bullish Divergence Example:
A Hidden Bullish Divergence Example:
A Regular Bearish Divergence Example:
A Hidden Bearish Divergence Example:
3. Trend Strength and Sentiment Analysis
WaveTrend: Measures the strength and direction of the trend. By identifying the extremes of market sentiment (overbought and oversold levels), WaveTrend provides early signals for potential reversals.
Money Flow Index (MFI): Assesses the underlying sentiment by analyzing the flow of money. A rising MFI during an uptrend confirms strong buying pressure, while a falling MFI during a downtrend confirms selling pressure. This helps traders assess whether a trend is likely to continue or reverse.
RSI & Stochastic RSI: Offer a momentum-based perspective on the trend’s strength. High RSI or Stochastic RSI values indicate that the asset may be overbought, suggesting a potential reversal. Conversely, low values indicate oversold conditions, signaling a possible upward reversal.
Example:
During a strong uptrend, the WaveTrend & RSI's might signal overbought conditions, suggesting caution. If the MFI also shows decreasing buying pressure and the RSI reaches extreme levels, these indicators together suggest that the trend might be weakening, and a reversal could be imminent.
Example:
During a strong downtrend, the WaveTrend & RSI's might signal oversold conditions, suggesting caution. If the MFI also shows increasing buying pressure and the RSI reaches extreme levels, these indicators together suggest that the trend might be weakening, and a reversal could be imminent.
Conclusion
The "WaveTrend With Divergences & RSI(STOCH) Divergences" script offers a powerful, integrated approach to technical analysis by combining trend, momentum, and sentiment indicators into a single tool. Its unique value lies in the cross-validation of signals, the ability to detect divergences, and the comprehensive view it provides of market conditions. By offering traders multiple layers of analysis and customization options, this script is designed to enhance trading decisions, reduce false signals, and provide clearer insights into market dynamics.
WAVETREND
Display of WaveTrend:
Display of WaveTrend Setting:
WaveTrend Indicator Explanation
The WaveTrend indicator helps identify overbought and oversold conditions, as well as potential buy and sell signals. Its flexibility allows traders to adapt it to various strategies, making it a versatile tool in technical analysis.
WaveTrend Input Settings:
WT MA Source: Default: HLC3
What it is: The data source used for calculating the WaveTrend Moving Average.
What it does: Determines the input data to smooth price action and filter noise.
Example: Using HLC3 (average of High, Low, Close) provides a smoother data representation compared to using just the closing price.
Length (WT MA Length): Default: 3
What it is: The period used to calculate the Moving Average.
What it does: Adjusts the sensitivity of the WaveTrend indicator, where shorter lengths respond more quickly to price changes.
Example: A length of 3 is ideal for short-term analysis, providing quick reactions to price movements.
WT Channel Length & Average: Default: WT Channel Length = 9, Average = 12
What it is: Lengths used to calculate the WaveTrend channel and its average.
What it does: Smooths out the WaveTrend further, reducing false signals by averaging over a set period.
Example: Higher values reduce noise and help in identifying more reliable trends.
Channel: Style, Width, and Color:
What it is: Customization options for the WaveTrend channel's appearance.
What it does: Adjusts how the channel is displayed, including line style, width, and color.
Example: Choosing an area style with a distinct color can make the WaveTrend indicator clearly visible on the chart.
WT Buy & Sell Signals:
What it is: Settings to enable and customize buy and sell signals based on WaveTrend.
What it does: Allows for the display of buy/sell signals and customization of their shapes and colors.
When it gives a Buy Signal: Generated when the WaveTrend line crosses below an oversold level and then rises back, indicating a potential upward price movement.
When it gives a Sell Signal: Triggered when the WaveTrend line crosses above an overbought level and then declines, suggesting a possible downward trend.
Example: The script identifies these signals based on mean reversion principles, where prices tend to revert to the mean after reaching extremes. Traders can use these signals to time their entries and exits effectively.
WAVETREND OVERBOUGTH AND OVERSOLD LEVELS
Display of WaveTrend with Overbought & Oversold Levels:
Display of WaveTrend Overbought & Oversold Levels Settings:
WaveTrend Overbought & Oversold Levels Explanation
WT OB & OS Levels: Default: OB Level 1 = 53, OB Level 2 = 60, OS Level 1 = -53, OS Level 2 = -60
What it is: The default overbought and oversold levels used by the WaveTrend indicator to signal potential market reversals.
What it does: When the WaveTrend crosses above the OB levels, it indicates an overbought condition, potentially signaling a reversal or selling opportunity. Conversely, when it crosses below the OS levels, it indicates an oversold condition, potentially signaling a reversal or buying opportunity.
Example: A trader might use these levels to time entry or exit points, such as selling when the WaveTrend crosses into the overbought zone or buying when it crosses into the oversold zone.
Show OB/OS Levels: Default: True
What it is: Toggle options to show or hide the overbought and oversold levels on your chart.
What it does: When enabled, these levels will be visually represented on your chart, helping you to easily identify when the market reaches these critical thresholds.
Example: Displaying these levels can help you quickly see when the WaveTrend is approaching or has crossed into overbought or oversold territory, allowing for more informed trading decisions.
Line Style, Width, and Color for OB/OS Levels:
What it is: Options to customize the appearance of the OB and OS levels on your chart, including line style (solid, dotted, dashed), line width, and color.
What it does: These settings allow you to adjust how prominently these levels are displayed on your chart, which can help you better visualize and respond to overbought or oversold conditions.
Example: Setting a thicker, dashed line in a contrasting color can make these levels stand out more clearly, aiding in quick visual identification.
Example of Use:
Scenario: A trader wants to identify potential selling points when the market is overbought. They set the OB levels at 53 and 60, choosing a solid, red line style to make these levels clear on their chart. As the WaveTrend crosses above 53, they monitor for further price action, and upon crossing 60, they consider initiating a sell order.
WAVETREND DIVERGENCES
Display of WaveTrend Divergence:
Display of WaveTrend Divergence Setting:
WaveTrend Divergence Indicator Explanation
The WaveTrend Divergence feature helps identify potential reversal points in the market by highlighting divergences between the price and the WaveTrend indicator. Divergences can signal a shift in market momentum, indicating a possible trend reversal. This component allows traders to visualize and customize divergence detection on their charts.
WaveTrend Divergence Input Settings:
Potential Reversal Range: Default: 28
What it is: The number of bars to look back when detecting potential tops and bottoms.
What it does: Sets the range for identifying possible reversal points based on historical data.
Example: A setting of 28 looks back across the last 28 bars to find reversal points, offering a balance between responsiveness and reliability.
Reversal Minimum LVL OB & OS: Default: OB = 35, OS = -35
What it is: The minimum overbought and oversold levels required for detecting potential reversals.
What it does: Adjusts the thresholds that trigger a reversal signal based on the WaveTrend indicator.
Example: A higher OB level reduces the sensitivity to overbought conditions, potentially filtering out false reversal signals.
Lookback Bar Left & Right: Default: Left = 10, Right = 1
What it is: The number of bars to the left and right used to confirm a top or bottom.
What it does: Helps determine the position of peaks and troughs in the price action.
Example: A larger left lookback captures more extended price action before the peak, while a smaller right lookback focuses on the immediate past.
Lookback Range Min & Max: Default: Min = 5, Max = 60
What it is: The minimum and maximum range for the lookback period when identifying divergences.
What it does: Fine-tunes the detection of divergences by controlling the range over which the indicator looks back.
Example: A wider range increases the chances of detecting divergences across different market conditions.
R.Div Minimum LVL OB & OS: Default: OB = 53, OS = -53
What it is: The threshold levels for detecting regular divergences.
What it does: Adjusts the sensitivity of the regular divergence detection.
Example: Higher thresholds make the detection more conservative, identifying only stronger divergence signals.
H.Div Minimum LVL OB & OS: Default: OB = 20, OS = -20
What it is: The threshold levels for detecting hidden divergences.
What it does: Similar to regular divergence settings but for hidden divergences, which can indicate potential reversals that are less obvious.
Example: Lower thresholds make the hidden divergence detection more sensitive, capturing subtler market shifts.
Divergence Label Options:
What it is: Options to display and customize labels for regular and hidden divergences.
What it does: Allows users to visually differentiate between regular and hidden divergences using customizable labels and colors.
Example: Using different colors and symbols for regular (R) and hidden (H) divergences makes it easier to interpret signals on the chart.
Text Size and Color:
What it is: Customization options for the size and color of divergence labels.
What it does: Adjusts the readability and visibility of divergence labels on the chart.
Example: Larger text size may be preferred for charts with a lot of data, ensuring divergence labels stand out clearly.
FAST & SLOW MONEY FLOW INDEX
Display of Fast & Slow Money Flow:
Display of Fast & Slow Money Flow Setting:
Fast Money Flow Indicator Explanation
The Fast Money Flow indicator helps traders identify the flow of money into and out of an asset over a shorter time frame. By tracking the volume-weighted average of price movements, it provides insights into buying and selling pressure in the market, which can be crucial for making timely trading decisions.
Fast Money Flow Input Settings:
Fast Money Flow: Length: Default: 9
What it is: The period used for calculating the Fast Money Flow.
What it does: Determines the sensitivity of the Money Flow calculation. A shorter length makes the indicator more responsive to recent price changes, while a longer length provides a smoother signal.
Example: A length of 9 is suitable for traders looking to capture quick shifts in market sentiment over a short period.
Fast MFI Area Multiplier: Default: 5
What it is: A multiplier applied to the Money Flow area calculation.
What it does: Adjusts the size of the Money Flow area on the chart, effectively amplifying or reducing the visual impact of the indicator.
Example: A higher multiplier can make the Money Flow more prominent on the chart, aiding in the quick identification of significant money flow changes.
Y Position (Y Pos): Default: 0
What it is: The vertical position adjustment for the Fast Money Flow plot on the chart.
What it does: Allows you to move the Money Flow plot up or down on the chart to avoid overlap with other indicators.
Example: Adjusting the Y Position can be useful if you have multiple indicators on the chart and need to maintain clarity.
Fast MFI Style, Width, and Color:
What it is: Customization options for how the Fast Money Flow is displayed on the chart.
What it does: Enables you to choose between different plot styles (line or area), set the line width, and select colors for positive and negative money flow.
Example: Using different colors for positive (green) and negative (red) money flow helps to visually distinguish between periods of buying and selling pressure.
Slow Money Flow Indicator Explanation
The Slow Money Flow indicator tracks the flow of money into and out of an asset over a longer time frame. It provides a broader perspective on market sentiment, smoothing out short-term fluctuations and highlighting longer-term trends.
Slow Money Flow Input Settings:
Slow Money Flow: Length: Default: 12
What it is: The period used for calculating the Slow Money Flow.
What it does: A longer period smooths out short-term fluctuations, providing a clearer view of the overall money flow trend.
Example: A length of 12 is often used by traders looking to identify sustained trends rather than short-term volatility.
Slow MFI Area Multiplier: Default: 5
What it is: A multiplier applied to the Slow Money Flow area calculation.
What it does: Adjusts the size of the Money Flow area on the chart, helping to emphasize the indicator’s significance.
Example: Increasing the multiplier can help highlight the Money Flow in markets with less volatile price action.
Y Position (Y Pos): Default: 0
What it is: The vertical position adjustment for the Slow Money Flow plot on the chart.
What it does: Allows for vertical repositioning of the Money Flow plot to maintain chart clarity when used with other indicators.
Example: Adjusting the Y Position ensures that the Slow Money Flow indicator does not overlap with other key indicators on the chart.
Slow MFI Style, Width, and Color:
What it is: Customization options for the visual display of the Slow Money Flow on the chart.
What it does: Allows you to choose the plot style (line or area), set the line width, and select colors to differentiate positive and negative money flow.
Example: Customizing the colors for the Slow Money Flow allows traders to quickly distinguish between buying and selling trends in the market.
RSI
Display of RSI:
Display of RSI Setting:
RSI Indicator Explanation
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It is typically used to identify overbought or oversold conditions in the market, providing traders with potential signals for buying or selling.
RSI Input Settings:
RSI Source: Default: Close
What it is: The data source used for calculating the RSI.
What it does: Determines which price data (e.g., close, open) is used in the RSI calculation, affecting how the indicator reflects market conditions.
Example: Using the closing price is standard practice, as it reflects the final agreed-upon price for a given time period.
MA Type (Moving Average Type): Default: SMA
What it is: The type of moving average applied to the RSI for smoothing purposes.
What it does: Changes the smoothing technique of the RSI, impacting how quickly the indicator responds to price movements.
Example: Using an Exponential Moving Average (EMA) will make the RSI more sensitive to recent price changes compared to a Simple Moving Average (SMA).
RSI Length: Default: 14
What it is: The period over which the RSI is calculated.
What it does: Adjusts the sensitivity of the RSI. A shorter length (e.g., 7) makes the RSI more responsive to recent price changes, while a longer length (e.g., 21) smooths out the indicator, reducing the number of signals.
Example: A 14-period RSI is commonly used for identifying overbought and oversold conditions, providing a balance between sensitivity and reliability.
RSI Plot Style, Width, and Color:
What it is: Options to customize the appearance of the RSI line on the chart.
What it does: Allows you to adjust the visual representation of the RSI, including the line width and color.
Example: Setting a thicker line width and a bright color like yellow can make the RSI more visible on the chart, aiding in quick analysis.
Display of RSI with RSI Moving Average:
RSI Moving Average Explanation
The RSI Moving Average adds a smoothing layer to the RSI, helping to filter out noise and provide clearer signals. It is particularly useful for confirming trend strength and identifying potential reversals.
RSI Moving Average Input Settings:
MA Length: Default: 14
What it is: The period over which the Moving Average is calculated on the RSI.
What it does: Adjusts the smoothing of the RSI, helping to reduce false signals and provide a clearer trend indication.
Example: A 14-period moving average on the RSI can smooth out short-term fluctuations, making it easier to spot genuine overbought or oversold conditions.
MA Plot Style, Width, and Color:
What it is: Customization options for how the RSI Moving Average is displayed on the chart.
What it does: Allows you to adjust the line width and color, helping to differentiate the Moving Average from the main RSI line.
Example: Using a contrasting color for the RSI Moving Average (e.g., magenta) can help it stand out against the main RSI line, making it easier to interpret the indicator.
STOCHASTIC RSI
Display of Stochastic RSI:
Display of Stochastic RSI Setting:
Stochastic RSI Indicator Explanation
The Stochastic RSI (Stoch RSI) is a momentum oscillator that measures the level of the RSI relative to its high-low range over a set period of time. It is used to identify overbought and oversold conditions, providing potential buy and sell signals based on momentum shifts.
Stochastic RSI Input Settings:
Stochastic RSI Length: Default: 14
What it is: The period over which the Stochastic RSI is calculated.
What it does: Adjusts the sensitivity of the Stochastic RSI. A shorter length makes the indicator more responsive to recent price changes, while a longer length smooths out the fluctuations, reducing noise.
Example: A length of 14 is commonly used to identify momentum shifts over a medium-term period, providing a balanced view of potential overbought or oversold conditions.
Display of Stochastic RSI %K Line:
Stochastic RSI %K Line Explanation
The %K line in the Stochastic RSI is the main line that tracks the momentum of the RSI over the chosen period. It is the faster-moving component of the Stochastic RSI, often used to identify entry and exit points.
Stochastic RSI %K Input Settings:
%K Length: Default: 3
What it is: The period used for smoothing the %K line of the Stochastic RSI.
What it does: Smoothing the %K line helps reduce noise and provides a clearer signal for potential market reversals.
Example: A smoothing length of 3 is common, offering a balance between responsiveness and noise reduction, making it easier to spot significant momentum shifts.
%K Plot Style, Width, and Color:
What it is: Customization options for the visual representation of the %K line.
What it does: Allows you to adjust the appearance of the %K line on the chart, including line width and color, to fit your visual preferences.
Example: Setting a blue color and a medium width for the %K line makes it stand out clearly on the chart, helping to identify key points of momentum change.
%K Fill Color (Above):
What it is: The fill color that appears above the %K line on the chart.
What it does: Adds visual clarity by shading the area above the %K line, making it easier to interpret the direction and strength of momentum.
Example: Using a light blue fill color above the %K line can help emphasize bullish momentum, making it visually prominent.
Display of Stochastic RSI %D Line:
Stochastic RSI %D Line Explanation
The %D line in the Stochastic RSI is a moving average of the %K line and acts as a signal line. It is slower-moving compared to the %K line and is often used to confirm signals or identify potential reversals when it crosses the %K line.
Stochastic RSI %D Input Settings:
%D Length: Default: 3
What it is: The period used for smoothing the %D line of the Stochastic RSI.
What it does: Smooths out the %D line, making it less sensitive to short-term fluctuations and more reliable for identifying significant market signals.
Example: A length of 3 is often used to provide a smoothed signal line that can help confirm trends or reversals indicated by the %K line.
%D Plot Style, Width, and Color:
What it is: Customization options for the visual representation of the %D line.
What it does: Allows you to adjust the appearance of the %D line on the chart, including line width and color, to match your preferences.
Example: Setting an orange color and a thicker line width for the %D line can help differentiate it from the %K line, making crossover points easier to spot.
%D Fill Color (Below):
What it is: The fill color that appears below the %D line on the chart.
What it does: Adds visual clarity by shading the area below the %D line, making it easier to interpret bearish momentum.
Example: Using a light orange fill color below the %D line can highlight bearish conditions, making it visually easier to identify.
RSI & STOCHASTIC RSI OVERBOUGHT AND OVERSOLD LEVELS
Display of RSI & Stochastic with Overbought & Oversold Levels:
Display of RSI & Stochastic Overbought & Oversold Settings:
RSI & Stochastic Overbought & Oversold Levels Explanation
The Overbought (OB) and Oversold (OS) levels for RSI and Stochastic RSI indicators are key thresholds that help traders identify potential reversal points in the market. These levels are used to determine when an asset is likely overbought or oversold, which can signal a potential trend reversal.
RSI & Stochastic Overbought & Oversold Input Settings:
RSI & Stochastic Level 1 Overbought (OB) & Oversold (OS): Default: OB Level = 170, OS Level = 130
What it is: The first set of thresholds for determining overbought and oversold conditions for both RSI and Stochastic RSI indicators.
What it does: When the RSI or Stochastic RSI crosses above the overbought level, it suggests that the asset might be overbought, potentially signaling a sell opportunity. Conversely, when these indicators drop below the oversold level, it suggests the asset might be oversold, potentially signaling a buy opportunity.
Example: If the RSI crosses above 170, traders might look for signs of a potential trend reversal to the downside, while a cross below 130 might indicate a reversal to the upside.
RSI & Stochastic Level 2 Overbought (OB) & Oversold (OS): Default: OB Level = 180, OS Level = 120
What it is: The second set of thresholds for determining overbought and oversold conditions for both RSI and Stochastic RSI indicators.
What it does: These levels provide an additional set of reference points, allowing traders to differentiate between varying degrees of overbought and oversold conditions, potentially leading to more refined trading decisions.
Example: When the RSI crosses above 180, it might indicate an extreme overbought condition, which could be a stronger signal for a sell, while a cross below 120 might indicate an extreme oversold condition, which could be a stronger signal for a buy.
RSI & Stochastic Overbought (OB) Band Customization:
OB Level 1: Width, Style, and Color:
What it is: Customization options for the visual appearance of the first overbought band on the chart.
What it does: Allows you to set the line width, style (solid, dotted, dashed), and color for the first overbought band, enhancing its visibility on the chart.
Example: A dashed red line with medium width can clearly indicate the first overbought level, helping traders quickly identify when this threshold is crossed.
OB Level 2: Width, Style, and Color:
What it is: Customization options for the visual appearance of the second overbought band on the chart.
What it does: Allows you to set the line width, style, and color for the second overbought band, providing a clear distinction from the first band.
Example: A dashed red line with a slightly thicker width can represent a more significant overbought level, making it easier to differentiate from the first level.
RSI & Stochastic Oversold (OS) Band Customization:
OS Level 1: Width, Style, and Color:
What it is: Customization options for the visual appearance of the first oversold band on the chart.
What it does: Allows you to set the line width, style (solid, dotted, dashed), and color for the first oversold band, making it visually prominent.
Example: A dashed green line with medium width can highlight the first oversold level, helping traders identify potential buying opportunities.
OS Level 2: Width, Style, and Color:
What it is: Customization options for the visual appearance of the second oversold band on the chart.
What it does: Allows you to set the line width, style, and color for the second oversold band, providing an additional visual cue for extreme oversold conditions.
Example: A dashed green line with a thicker width can represent a more significant oversold level, offering a stronger visual cue for potential buying opportunities.
RSI DIVERGENCES
Display of RSI Divergence Labels:
Display of RSI Divergence Settings:
RSI Divergence Lookback Explanation
The RSI Divergence settings allow traders to customize the parameters for detecting divergences between the RSI (Relative Strength Index) and price action. Divergences occur when the price moves in the opposite direction to the RSI, potentially signaling a trend reversal. These settings help refine the accuracy of divergence detection by adjusting the lookback period and range. ( NOTE: This setting only imply to the RSI. This doesn't effect the STOCHASTIC RSI. )
RSI Divergence Lookback Input Settings:
Lookback Left: Default: 10
What it is: The number of bars to look back from the current bar to detect a potential divergence.
What it does: Defines the left-side lookback period for identifying pivot points in the RSI, which are used to spot divergences. A longer lookback period may capture more significant trends but could also miss shorter-term divergences.
Example: A setting of 10 bars means the script will consider pivot points up to 10 bars before the current bar to check for divergence patterns.
Lookback Right: Default: 1
What it is: The number of bars to look forward from the current bar to complete the divergence pattern.
What it does: Defines the right-side lookback period for confirming a potential divergence. This setting helps ensure that the identified divergence is valid by allowing the script to check subsequent bars for confirmation.
Example: A setting of 1 bar means the script will look at the next bar to confirm the divergence pattern, ensuring that the signal is reliable.
Lookback Range Min: Default: 5
What it is: The minimum range of bars required to detect a valid divergence.
What it does: Sets a lower bound on the range of bars considered for divergence detection. A lower minimum range might capture more frequent but possibly less significant divergences.
Example: Setting the minimum range to 5 ensures that only divergences spanning at least 5 bars are considered, filtering out very short-term patterns.
Lookback Range Max: Default: 60
What it is: The maximum range of bars within which a divergence can be detected.
What it does: Sets an upper bound on the range of bars considered for divergence detection. A larger maximum range might capture more significant divergences but could also include less relevant long-term patterns.
Example: Setting the maximum range to 60 bars allows the script to detect divergences over a longer timeframe, capturing more extended divergence patterns that could indicate major trend reversals.
RSI Divergence Explanation
RSI divergences occur when the RSI indicator and price action move in opposite directions, signaling potential trend reversals. This section of the settings allows traders to customize the appearance and detection of both regular and hidden bullish and bearish divergences.
RSI Divergence Input Settings:
R. Bullish Div Label: Default: True
What it is: An option to display labels for regular bullish divergences.
What it does: Enables or disables the visibility of labels that mark regular bullish divergences, where the price makes a lower low while the RSI makes a higher low, indicating a potential upward reversal.
Example: A trader might use this to spot buying opportunities in a downtrend when a bullish divergence suggests the trend may be reversing.
Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bullish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Selecting a green label color and a distinct line width makes bullish divergences easily recognizable on your chart.
R. Bearish Div Label: Default: True
What it is: An option to display labels for regular bearish divergences.
What it does: Enables or disables the visibility of labels that mark regular bearish divergences, where the price makes a higher high while the RSI makes a lower high, indicating a potential downward reversal.
Example: A trader might use this to spot selling opportunities in an uptrend when a bearish divergence suggests the trend may be reversing.
Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bearish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Choosing a red label color and a specific line width makes bearish divergences clearly stand out on your chart.
H. Bullish Div Label: Default: False
What it is: An option to display labels for hidden bullish divergences.
What it does: Enables or disables the visibility of labels that mark hidden bullish divergences, where the price makes a higher low while the RSI makes a lower low, indicating potential continuation of an uptrend.
Example: A trader might use this to confirm an existing uptrend when a hidden bullish divergence signals continued buying strength.
Hidden Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bullish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A softer green color with a thinner line width might be chosen to subtly indicate hidden bullish divergences, keeping the chart clean while providing useful information.
H. Bearish Div Label: Default: False
What it is: An option to display labels for hidden bearish divergences.
What it does: Enables or disables the visibility of labels that mark hidden bearish divergences, where the price makes a lower high while the RSI makes a higher high, indicating potential continuation of a downtrend.
Example: A trader might use this to confirm an existing downtrend when a hidden bearish divergence signals continued selling pressure.
Hidden Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bearish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A muted red color with a thinner line width might be selected to indicate hidden bearish divergences without overwhelming the chart.
Divergence Text Size and Color: Default: S (Small)
What it is: Settings to adjust the size and color of text labels for RSI divergences.
What it does: Allows you to customize the size and color of text labels that display the divergence information on the chart.
Example: Choosing a small text size with a bright white color can make divergence labels easily readable without taking up too much space on the chart.
STOCHASTIC DIVERGENCES
Display of Stochastic RSI Divergence Labels:
Display of Stochastic RSI Divergence Settings:
Stochastic RSI Divergence Explanation
Stochastic RSI divergences occur when the Stochastic RSI indicator and price action move in opposite directions, signaling potential trend reversals. These settings allow traders to customize the detection and visual representation of both regular and hidden bullish and bearish divergences in the Stochastic RSI.
Stochastic RSI Divergence Input Settings:
R. Bullish Div Label: Default: True
What it is: An option to display labels for regular bullish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark regular bullish divergences, where the price makes a lower low while the Stochastic RSI makes a higher low, indicating a potential upward reversal.
Example: A trader might use this to spot buying opportunities in a downtrend when a bullish divergence in the Stochastic RSI suggests the trend may be reversing.
Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bullish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Selecting a blue label color and a distinct line width makes bullish divergences in the Stochastic RSI easily recognizable on your chart.
R. Bearish Div Label: Default: True
What it is: An option to display labels for regular bearish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark regular bearish divergences, where the price makes a higher high while the Stochastic RSI makes a lower high, indicating a potential downward reversal.
Example: A trader might use this to spot selling opportunities in an uptrend when a bearish divergence in the Stochastic RSI suggests the trend may be reversing.
Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bearish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Choosing an orange label color and a specific line width makes bearish divergences in the Stochastic RSI clearly stand out on your chart.
H. Bullish Div Label: Default: False
What it is: An option to display labels for hidden bullish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark hidden bullish divergences, where the price makes a higher low while the Stochastic RSI makes a lower low, indicating potential continuation of an uptrend.
Example: A trader might use this to confirm an existing uptrend when a hidden bullish divergence in the Stochastic RSI signals continued buying strength.
Hidden Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bullish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A softer blue color with a thinner line width might be chosen to subtly indicate hidden bullish divergences, keeping the chart clean while providing useful information.
H. Bearish Div Label: Default: False
What it is: An option to display labels for hidden bearish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark hidden bearish divergences, where the price makes a lower high while the Stochastic RSI makes a higher high, indicating potential continuation of a downtrend.
Example: A trader might use this to confirm an existing downtrend when a hidden bearish divergence in the Stochastic RSI signals continued selling pressure.
Hidden Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bearish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A muted orange color with a thinner line width might be selected to indicate hidden bearish divergences without overwhelming the chart.
Divergence Text Size and Color: Default: S (Small)
What it is: Settings to adjust the size and color of text labels for Stochastic RSI divergences.
What it does: Allows you to customize the size and color of text labels that display the divergence information on the chart.
Example: Choosing a small text size with a bright white color can make divergence labels easily readable without taking up too much space on the chart.
Alert System:
Custom Alerts for Divergences and Reversals:
What it is: The script includes customizable alert conditions to notify you of detected divergences or potential reversals based on WaveTrend, RSI, and Stochastic RSI.
What it does: Helps you stay informed of key market movements without constantly monitoring the charts, enabling timely decisions.
Example: Setting an alert for regular bearish divergence on the WaveTrend could notify you of a potential sell opportunity as soon as it is detected.
How to Use Alerts:
Set up custom alerts in TradingView based on these conditions to be notified of potential trading opportunities. Alerts are triggered when the indicator detects conditions that match the selected criteria, such as divergences or potential reversals.
By following the detailed guidelines and examples above, you can effectively use and customize this powerful indicator to suit your trading strategy.
For further understanding and customization, refer to the input settings within the script and adjust them to match your trading style and preferences.
How Components Work Together
Synergy and Cross-Validation: The indicator combines multiple layers of analysis to validate trading signals. For example, a WaveTrend buy signal that coincides with a bullish divergence in RSI and positive fast money flow is likely to be more reliable than any single indicator’s signal. This cross-validation reduces the likelihood of false signals and enhances decision-making.
Comprehensive Market Analysis: Each component plays a role in analyzing different aspects of the market. WaveTrend focuses on trend strength, Money Flow indicators assess market sentiment, while RSI and Stochastic RSI offer detailed views of price momentum and potential reversals.
Ideal For
Traders who require a reliable, multifaceted tool for detecting market trends and reversals.
Investors seeking a deeper understanding of market dynamics across different timeframes and conditions, whether in forex, equities, or cryptocurrency markets.
This script is designed to provide a comprehensive tool for technical analysis, combining multiple indicators and divergence detection into one versatile and customizable script. It is especially useful for traders who want to monitor various indicators simultaneously and look for convergence or divergence signals across different technical tools.
Acknowledgements
Special thanks to these amazing creators for inspiration and their creations:
I want to thank these amazing creators for creating there amazing indicators , that inspired me and also gave me a head start by making this indicator! Without their amazing indicators it wouldn't be possible!
vumanchu: VuManChu Cipher B Divergences.
MisterMoTa: RSI + Divergences + Alerts .
DevLucem: Plain Stochastic Divergence.
Note
This indicator is designed to be a powerful tool in your trading arsenal. However , it is essential to backtest and adjust the settings according to your trading strategy before applying it to live trading . If you have any questions or need further assistance, feel free to reach out.
7-Channel Trend Meter v3🔥 7-Channel Trend Meter – Ultimate Trend Confirmation Tool 💹
Purpose: Supplementary indicator used as confirmation
The 7-Channel Trend Meter offers an all-in-one confirmation system that combines 7 high-accuracy indicators into one easy-to-read visual tool. Say goodbye to guesswork and unnecessary tab-switching—just clear, actionable signals for smarter trades. Whether you're trading stocks, crypto, or forex, this indicator streamlines your decision-making process and enhances your strategy’s performance.
⚙️ What’s Inside The Box?
Here is each tool that the Trend Meter uses, and why/how they're used:
Average Directional Index: Confirms market strength ✅
Directional Movement Index: Confirms trend direction ✅
EMA Cross: Confirms reversals in trend through average price ✅
Relative Strength Index: Confirms trend through divergences ✅
Stochastic Oscillator: Confirms shifts in momentum ✅
Supertrend: Confirms trend-following using ATR calculations ✅
Volume Delta: Confirms buying/selling pressure weight by finding differences ✅
🧾 How To Read It:
🟨 Bar 1 – Market Strength Meter:
Light Gold 🟡: Strong market with trending conditions.
Dark Gold 🟤: Weakening market or consolidation—proceed with caution.
📊 Bars 2 to 7 – Trend Direction Confirmations:
🟩 Green: Bullish signal, uptrend likely.
🟥 Red: Bearish signal, downtrend likely.
💯 Why it's helpful to traders:
✅ 7 Confirmations in 1 View: No need to flip between multiple charts.
✅ Visual Clarity: Spot trends instantly with a quick glance.
✅ Perfect for Entry Confirmation: Confirm trade signals before pulling the trigger.
✅ Boosts Your Win Rate: Make data-backed decisions, not guesses.
✅ Works Across Multiple Markets: Stocks, crypto, forex—you name it 🌍.
🤔 "What's with the indicator mashup/How do these components work together? 🤔
The 7-Channel Trend Meter is designed as an original and useful tool that integrates multiple indicators to enhance trading decisions, rather than merely combining existing tools without logical coherence. This strategic mashup creates a comprehensive analysis framework that offers deeper insights into market conditions by capitalizing on each component's unique strengths. The careful integration of seven indicators creates a unified system that eliminates conflicting signals and enhances the decision-making process. Rather than simply merging indicators for the sake of it, the 7-Channel Trend Meter is designed to streamline trading strategies, making it a practical tool for traders across various markets. By leveraging the combined strengths of these indicators, traders can act with greater confidence, backed by comprehensive data rather than fragmented insights. Here’s how they synergistically work together:
Average Directional Index (ADX) and Directional Movement Index (DMI): The reason for this mashup is because ADX indicates the strength of the prevailing trend, while the DMI pinpoints its direction. Together, they equip traders with a dual framework that not only identifies whether to engage with a trend but also quantifies its strength, allowing for more decisive trading strategies.
EMA Cross: The reason for this addition to the mashup is because this tool signals potential trend reversals by identifying moving average crossovers. When combined with the ADX and DMI, traders can better differentiate between genuine trend shifts and market noise, leading to more accurate entries.
Relative Strength Index (RSI) and Stochastic Oscillator: The reason for this mashup is because by using both momentum indicators, traders gain a multifaceted view of market dynamics. The RSI assesses overbought or oversold conditions, while the Stochastic Oscillator confirms momentum shifts. When both agree with the trend signals from the DMI, it enhances the reliability of reversal or continuation strategies.
Supertrend: The reason for this addition to the mashup is because as a trailing stop based on market volatility, the Supertrend indicator works hand-in-hand with the ADX’s strength assessment, allowing traders to ride strong trends while managing risk. This cohesion prevents premature exits during minor pullbacks.
Volume Delta: The reason for this addition to the mashup is because integrating volume analysis helps validate signals from the price action indicators. Significant volume behind a price movement reinforces the likelihood of its continuation, ensuring that traders can act on well-supported signals.
🔍 How it does what it says it does 🔍
While the exact calculations remain proprietary, the following outlines how the components synergistically work to aid traders in making informed decisions:
Market Strength Assessment: Average Directional Index (ADX)
This component is used as confirmation by measuring the strength of the market trend on a scale from 0 to 100. A reading above 20 generally indicates a strong trend, while readings below 20 suggest sideways movement. The Trend Meter flags strong trends, effectively helping traders identify optimal conditions for entering positions.
Trend Direction Confirmation: Directional Movement Index (DMI)
This component is used as confirmation by distinguishing between bullish and bearish trends by evaluating price movements. This combination allows traders to confirm not only if a trend exists but also its direction, informing whether to buy or sell.
Trend Reversal Detection: Exponential Moving Average (EMA) Cross
This component is used as confirmation by calculating two EMAs (one shorter and one longer) to identify potential reversal points. When the shorter EMA crosses above the longer EMA, it signals a bullish reversal, and vice versa for bearish reversals. This helps traders pinpoint optimal entry or exit points.
Momentum Analysis: Relative Strength Index (RSI) and Stochastic Oscillator
These components are used as confirmation by providing insights into momentum. The RSI assesses the speed and change of price movements, indicating overbought or oversold conditions. The Stochastic Oscillator compares a particular closing price to a range of prices over a specified period. This helps identify whether momentum is slowing or speeding up, offering a clear view of potential reversal points. When both the RSI and Stochastic Oscillator converge on signals, it increases the reliability of those signals in trading decisions.
Volatility-Based Trend Following: Supertrend
This component is used as confirmation by utilizing Average True Range (ATR) calculations to help traders stay in momentum-driven trades by providing dynamic support and resistance levels that adapt to volatility. This enables better risk management while allowing traders to capture stronger trends.
Volume Confirmation: Volume Delta
This component is used as confirmation by analyzing buying and selling pressure by measuring the difference between buy and sell volumes, offering critical insights into market sentiment. Significant volume behind a price movement increases confidence in the sustainability of that move.
🧠 Pro Tip:
When all 7 bars line up in green or red, it’s time to take action: load up for a confirmed move or sit back and wait for market confirmation. Let the Trend Meter guide your strategy with precision.
Conclusion:
Integrate the 7-Channel Trend Meter as useful confirmation for your TradingView strategy and stop trading like the average retail trader. This tool eliminates the noise and helps you stay focused on high-confidence trades.
MACD Boundary PSA - CoffeeKillerMACD Boundary PSA - CoffeeKiller Indicator Guide
Welcome traders! This guide will walk you through the MACD Boundary PSA indicator, a powerful market analysis tool developed by CoffeeKiller that enhances the traditional MACD with advanced boundary detection and peak signaling features.
🔔 **Warning: This Indicator Has No Signal Line or MACD Line** 🔔 This indicator is my version of the MACD, that I use in conjunction with the Rev&Line indicator.
Core Concept: Enhanced MACD Analysis
The foundation of this indicator builds upon the classic Moving Average Convergence Divergence (MACD) indicator, adding boundary tracking and peak detection systems to provide clearer signals and market insights.
Histogram Bars: Market Momentum
- Positive Green Bars: Bullish momentum
- Negative Red Bars: Bearish momentum
- Color intensity varies based on momentum strength
- Special coloring for new high/low boundaries
Marker Lines: Dynamic Support/Resistance
- High Marker Line (Magenta): Tracks the highest point reached during a bullish phase
- Low Marker Line (Cyan): Tracks the lowest point reached during a bearish phase
- Acts as dynamic boundaries that help identify strength of current moves
Peak Detection System:
- Triangular markers identify significant local maxima and minima
- Background highlighting shows important momentum peaks
- Helps identify potential reversal points and momentum exhaustion
Core Components
1. MACD Calculation
- Customizable fast and slow moving averages
- Signal line smoothing options
- Flexible MA type selection (SMA or EMA)
- Custom source input options
2. Boundary Tracking System
- Automatic detection of highest values in bullish phases
- Automatic detection of lowest values in bearish phases
- Step-line visualization of boundaries
- Color-coded for easy identification
3. Peak Detection System
- Identification of local maxima and minima
- Background highlighting of significant peaks
- Triangle markers for peak visualization
- Zero-line cross detection for trend changes
4. Time Resolution Control
- Normal mode: calculations based on chart timeframe
- Custom resolution mode: calculations based on specified timeframe
Main Features
Time Resolution Settings
- Normal mode: calculations match your chart's timeframe
- Custom resolution mode: calculations based on specified timeframe
- Helps identify stronger signals from other timeframes
Visual Elements
- Color-coded histogram bars
- Dynamic marker lines for boundaries
- Peak triangles for significant turning points
- Background highlighting for peak identification
Signal Generation
- Zero-line crosses for trend change signals
- Boundary breaks for momentum strength
- Peak formation for potential reversals
- Color changes for momentum direction
Customization Options
- MA types and lengths
- Signal smoothing
- Color schemes
- Marker line visibility
- Peak background display options
Trading Applications
1. Trend Identification
- Histogram crossing above zero: bullish trend beginning
- Histogram crossing below zero: bearish trend beginning
- Histogram color: indicates momentum direction
- Consistent color intensity: trend strength
2. Reversal Detection
- Peak triangles after extended trend: potential exhaustion
- Background highlighting: significant reversal points
- Histogram approaching marker lines: potential trend change
- Color shifts from bright to muted: decreasing momentum
3. Momentum Analysis
- Histogram breaking above previous high boundary: accelerating bullish momentum
- Histogram breaking below previous low boundary: accelerating bearish momentum
- Special coloring (magenta/cyan): boundary breaks indicating strength
- Distance from zero line: overall momentum magnitude
4. Market Structure Assessment
- Consecutive higher peaks: strengthening bullish structure
- Consecutive lower troughs: strengthening bearish structure
- Peak comparisons: relative strength of momentum phases
- Boundary line steps: market structure levels
Optimization Guide
1. MACD Settings
- Fast Length: Shorter values (8-12) for responsiveness, longer values (20+) for smoother signals
- Slow Length: Shorter values (21-34) for more signals, longer values (72+) for major moves
- Default settings (22, 72, 9): balanced approach for most timeframes
- Consider using 8, 21, 5 for shorter timeframes and 34, 144, 5 for longer timeframes
2. MA Type Selection
- EMA: More responsive, follows price more closely
- SMA: Smoother, fewer false signals, potentially more lag
- Mix and match for oscillator and signal lines based on your preference
3. Time Resolution
- Match chart timeframe: for aligned analysis
- Use higher timeframe: for filtering signals
- Lower timeframe: for earlier entries but more noise
4. Color Customization
- Normal bullish/bearish colors: represent standard momentum
- High/low marker line colors: customize visibility
- Peak marker colors: adjust for your visual preference
- Consider chart background when selecting colors
Best Practices
1. Signal Confirmation
- Wait for zero-line crosses to confirm trend changes
- Look for peak formations to identify potential reversals
- Check for boundary breaks to confirm strong momentum
- Use custom timeframe option for higher timeframe confirmation
2. Timeframe Selection
- Lower timeframes: more signals, potential noise
- Higher timeframes: cleaner signals, less frequent
- Custom resolution: allows comparison across timeframes
- Consider using multiple timeframes for confirmation
3. Market Context
- Strong bullish phase: positive histogram breaking above marker line
- Strong bearish phase: negative histogram breaking below marker line
- Histogram approaching zero: potential trend change
- Peak formations: potential exhaustion points
4. Combining with Other Indicators
- Use with trend indicators for confirmation
- Pair with oscillators for overbought/oversold conditions
- Combine with volume analysis for validation
- Consider support/resistance levels with boundary lines
Advanced Trading Strategies
1. Boundary Break Strategy
- Enter long when histogram breaks above previous high marker line
- Enter short when histogram breaks below previous low marker line
- Use zero-line as initial stop-loss reference
- Take profits at formation of opposing peaks
2. Peak Trading Strategy
- Identify significant peaks with triangular markers
- Look for consecutive lower peaks in bullish phases for shorting opportunities
- Look for consecutive higher troughs in bearish phases for buying opportunities
- Use zero-line crosses as confirmation
3. Multi-Timeframe Strategy
- Use custom resolution for higher timeframe MACD trend
- Enter trades when both timeframes align
- Higher timeframe for trend direction
- Chart timeframe for precise entry
4. Histogram Color Strategy
- Enter long when histogram turns bright green (increasing momentum)
- Enter short when histogram turns bright red (increasing momentum)
- Exit when color intensity fades (decreasing momentum)
- Use marker lines as dynamic support/resistance
Practical Analysis Examples
Bullish Market Scenario
- Histogram crosses above zero line
- Green bars grow in height and intensity
- High marker line forms steps upward
- Peak triangles appear at local maxima
- Background highlights appear at significant momentum peaks
Bearish Market Scenario
- Histogram crosses below zero line
- Red bars grow in depth and intensity
- Low marker line forms steps downward
- Peak triangles appear at local minima
- Background highlights appear at significant momentum troughs
Consolidation Scenario
- Histogram oscillates around zero line
- Bar colors alternate frequently
- Marker lines remain relatively flat
- Few or no new peak highlights appear
- Histogram values remain small
Understanding Market Dynamics Through MACD Boundary PSA
At its core, this indicator provides a unique lens to visualize market momentum and boundaries:
1. Momentum Strength: The histogram height/depth shows the strength of current momentum, with color intensity providing additional context about acceleration or deceleration.
2. Dynamic Boundaries: The marker lines create a visual representation of the "high water marks" of momentum in both directions, helping to identify when markets are making new momentum extremes.
3. Exhaustion Signals: The peak detection system highlights moments where momentum has reached a local maximum or minimum, often precursors to reversals or consolidations.
4. Trend Confirmation: The histogram color and intensity provide instant feedback about the current trend direction and strength, with special colors highlighting particularly significant moves.
Remember:
- Combine signals from histogram, marker lines, and peak formations
- Use appropriate timeframe settings for your trading style
- Customize the indicator to match your visual preferences
- Consider market conditions and correlate with price action
This indicator works best when:
- Used as part of a comprehensive trading system
- Combined with proper risk management
- Applied with an understanding of current market conditions
- Signals are confirmed by price action and other indicators
**DISCLAIMER**: This indicator and its signals are intended solely for educational and informational purposes. They do not constitute financial advice. Trading involves significant risk of loss. Always conduct your own analysis and consult with financial professionals before making trading decisions.
Market Strength Buy Sell Indicator [TradeDots]A specialized tool designed to assist traders in evaluating market conditions through a multifaceted analysis of relative performance, beta-adjusted returns, momentum, and volume—allowing you to identify optimal points for long or short trades. By integrating multiple benchmarks (default S&P 500) and percentile-based thresholds, the script provides clear, actionable insights suitable for both day trading and higher-level timeframe assessments.
📝 HOW IT WORKS
1. Multi-Factor Composite Score
Relative Performance (RS Ratio): Compares your asset’s performance to a chosen benchmark (default: SPY). Values above 1.0 indicate outperformance, while below 1.0 suggest underperformance.
Beta-Adjusted Returns: Checks the ticker’s excess movement relative to expected market-related moves. This helps distinguish pure “alpha” from broad market effects.
Volume & Correlation: Volume spikes often confirm the momentum behind a move, while correlation measures how closely the asset tracks or diverges from its benchmark.
These components merge into a 0–100 composite score. Scores above 50 frequently imply bullish strength; drops below 50 often point to underperformance—potentially flagging short opportunities.
2. Intraday & Day Trading Focus
Monitoring Below 50: During the trading day, the script calculates live data against the benchmark, offering an intraday-sensitive composite score. A dip under 50 may indicate a short bias for that session, especially when accompanied by high volume or momentum shifts.
3. Higher Timeframe Monitoring
Daily Strategies: On daily or weekly charts, the script reveals overall relative strength or weakness compared to the S&P 500. This higher-level perspective helps form broader trading biases—crucial for swing or position trades spanning multiple days.
Long/Short Thresholds: Persistent readings above 50 on a daily chart typically reinforce a long bias, while consistent dips below 50 can sustain a short or cautious outlook.
4. Pair Trading Applications
Custom Benchmark Selection: By setting a specific ticker pair as your benchmark instead of the default S&P 500, you can identify spread trading opportunities between two correlated assets. This allows you to go long the outperforming asset while shorting the underperforming one when the spread reaches extreme levels.
4. Color-Coded Signals & Alerts
Visual Zones (25–75): Color-coded bands highlight strong outperformance (above 75) or pronounced underperformance (below 25).
Alerts on Strong Shifts: Automatic alerts can notify you of sudden entries or exits from bullish or bearish zones, so you can potentially act on new market information without delay.
⚙️ HOW TO USE
1. Select Your Timeframe: For scalping or day trading, lower intervals (e.g., 5-minute) offer immediate data resets at the session’s start. For multi-day insight, daily or weekly charts reveal broader performance trends.
2. Watch Key Levels Around 50: Intraday dips under 50 may be a cue to consider short trades, while bounces above 50 can confirm renewed strength.
3. Assess Benchmark Relationships: Compare your asset’s score and signals to the broader market. A stock falling below its pair’s relative strength line might lag overall market momentum.
4. Combine Tools & Validate: This script excels when integrated with other technical analysis methods (e.g., support/resistance, chart patterns) and fundamental factors for a holistic market view.
❗ LIMITATIONS
No Direction Guarantee: The indicator identifies relative strength but does not guarantee directional price moves.
Delayed Updates: Since calculations update after each bar close, sudden intrabar changes may not immediately reflect.
Market-Specific Behaviors: Some assets or unusual market conditions may deviate from typical benchmarks, weakening signal reliability.
Past ≠ Future: High or low relative strength in the past may not predict continued performance.
RISK DISCLAIMER
All forms of trading and investing involve risk, including the possible loss of principal. This indicator analyzes relative performance but cannot assure profits or eliminate losses. Past performance of any strategy does not guarantee future results. Always combine analysis with proper risk management and your broader trading plan. Consult a licensed financial advisor if you are unsure of your individual risk tolerance or investment objectives.
Enhanced Volume Trend Indicator with BB SqueezeEnhanced Volume Trend Indicator with BB Squeeze: Comprehensive Explanation
The visualization system allows traders to quickly scan multiple securities to identify high-probability setups without detailed analysis of each chart. The progression from squeeze to breakout, supported by volume trend confirmation, offers a systematic approach to identifying trading opportunities.
The script combines multiple technical analysis approaches into a comprehensive dashboard that helps traders make informed decisions by identifying high-probability setups while filtering out noise through its sophisticated confirmation requirements. It combines multiple technical analysis approaches into an integrated visual system that helps traders identify potential trading opportunities while filtering out false signals.
Core Features
1. Volume Analysis Dashboard
The indicator displays various volume-related metrics in customizable tables:
AVOL (After Hours + Pre-Market Volume): Shows extended hours volume as a percentage of the 21-day average volume with color coding for buying/selling pressure. Green indicates buying pressure and red indicates selling pressure.
Volume Metrics: Includes regular volume (VOL), dollar volume ($VOL), relative volume compared to 21-day average (RVOL), and relative volume compared to 90-day average (RVOL90D).
Pre-Market Data: Optional display of pre-market volume (PVOL), pre-market dollar volume (P$VOL), pre-market relative volume (PRVOL), and pre-market price change percentage (PCHG%).
2. Enhanced Volume Trend (VTR) Analysis
The Volume Trend indicator uses adaptive analysis to evaluate buying and selling pressure, combining multiple factors:
MACD (Moving Average Convergence Divergence) components
Volume-to-SMA (Simple Moving Average) ratio
Price direction and market conditions
Volume change rates and momentum
EMA (Exponential Moving Average) alignment and crossovers
Volatility filtering
VTR Visual Indicators
The VTR score ranges from 0-100, with values above 50 indicating bullish conditions and below 50 indicating bearish conditions. This is visually represented by colored circles:
"●" (Filled Circle):
Green: Strong bullish trend (VTR ≥ 80)
Red: Strong bearish trend (VTR ≤ 20)
"◯" (Hollow Circle):
Green: Moderate bullish trend (VTR 65-79)
Red: Moderate bearish trend (VTR 21-35)
"·" (Small Dot):
Green: Weak bullish trend (VTR 55-64)
Red: Weak bearish trend (VTR 36-45)
"○" (Medium Hollow Circle): Neutral conditions (VTR 46-54), shown in gray
In "Both" display mode, the VTR shows both the numerical score (0-100) alongside the appropriate circle symbol.
Enhanced VTR Settings
The Enhanced Volume Trend component offers several advanced customization options:
Adaptive Volume Analysis (volTrendAdaptive):
When enabled, dynamically adjusts volume thresholds based on recent market volatility
Higher volatility periods require proportionally higher volume to generate significant signals
Helps prevent false signals during highly volatile markets
Keep enabled for most trading conditions, especially in volatile markets
Speed of Change Weight (volTrendSpeedWeight, range 0-1):
Controls emphasis on volume acceleration/deceleration rather than absolute levels
Higher values (0.7-1.0): More responsive to new volume trends, better for momentum trading
Lower values (0.2-0.5): Less responsive, better for trend following
Helps identify early volume trends before they fully develop
Momentum Period (volTrendMomentumPeriod, range 2-10):
Defines lookback period for volume change rate calculations
Lower values (2-3): More responsive to recent changes, better for short timeframes
Higher values (7-10): Smoother, better for daily/weekly charts
Directly affects how quickly the indicator responds to new volume patterns
Volatility Filter (volTrendVolatilityFilter):
Adjusts significance of volume by factoring in current price volatility
High volume during high volatility receives less weight
High volume during low volatility receives more weight
Helps distinguish between genuine volume-driven moves and volatility-driven moves
EMA Alignment Weight (volTrendEmaWeight, range 0-1):
Controls importance of EMA alignments in final VTR calculation
Analyzes multiple EMA relationships (5, 10, 21 period)
Higher values (0.7-1.0): Greater emphasis on trend structure
Lower values (0.2-0.5): More focus on pure volume patterns
Display Mode (volTrendDisplayMode):
"Value": Shows only numerical score (0-100)
"Strength": Shows only symbolic representation
"Both": Shows numerical score and symbol together
3. Bollinger Band Squeeze Detection (SQZ)
The BB Squeeze indicator identifies periods of low volatility when Bollinger Bands contract inside Keltner Channels, often preceding significant price movements.
SQZ Visual Indicators
"●" (Filled Circle): Strong squeeze - high probability setup for an impending breakout
Green: Strong squeeze with bullish bias (likely upward breakout)
Red: Strong squeeze with bearish bias (likely downward breakout)
Orange: Strong squeeze with unclear direction
"◯" (Hollow Circle): Moderate squeeze - medium probability setup
Green: With bullish EMA alignment
Red: With bearish EMA alignment
Orange: Without clear directional bias
"-" (Dash): Gray dash indicates no squeeze condition (normal volatility)
The script identifies squeeze conditions through multiple methods:
Bollinger Bands contracting inside Keltner Channels
BB width falling to bottom 20% of recent range (BB width percentile)
Very narrow Keltner Channel (less than 5% of basis price)
Tracking squeeze duration in consecutive bars
Different squeeze strengths are detected:
Strong Squeeze: BB inside KC with tight BB width and narrow KC
Moderate Squeeze: BB inside KC with either tight BB width or narrow KC
No Squeeze: Normal market conditions
4. Breakout Detection System
The script includes two breakout indicators working in sequence:
4.1 Pre-Breakout (PBK) Indicator
Detects potential upcoming breakouts by analyzing multiple factors:
Squeeze conditions lasting 2-3 bars or more
Significant price ranges
Strong volume confirmation
EMA/MACD crossovers
Consistent price direction
PBK Visual Indicators
"●" (Filled Circle): Detected pre-breakout condition
Green: Likely upward breakout (bullish)
Red: Likely downward breakout (bearish)
Orange: Direction not yet clear, but breakout likely
"-" (Dash): Gray dash indicates no pre-breakout condition
The PBK uses sophisticated conditions to reduce false signals including minimum squeeze length, significant price movement, and technical confirmations.
4.2 Breakout (BK) Indicator
Confirms actual breakouts in progress by identifying:
End of squeeze or strong expansion of Bollinger Bands
Volume expansion
Price moving outside Bollinger Bands
EMA crossovers with volume confirmation
MACD crossovers with significant price range
BK Visual Indicators
"●" (Filled Circle): Confirmed breakout in progress
Green: Upward breakout (bullish)
Red: Downward breakout (bearish)
Orange: Unusual breakout pattern without clear direction
"◆" (Diamond): Special breakout conditions (meets some but not all criteria)
"-" (Dash): Gray dash indicates no breakout detected
The BK indicator uses advanced filters for confirmation:
Requires consecutive breakout signals to reduce false positives
Strong volume confirmation requirements (40% above average)
Significant price movement thresholds
Consistency checks between price action and indicators
5. Market Metrics and Analysis
Price Change Percentage (CHG%)
Displays the current percentage change relative to the previous day's close, color-coded green for positive changes and red for negative changes.
Average Daily Range (ADR%)
Calculates the average daily percentage range over a specified period (default 20 days), helping traders gauge volatility and set appropriate price targets.
Average True Range (ATR)
Shows the Average True Range value, a volatility indicator developed by J. Welles Wilder that measures market volatility by decomposing the entire range of an asset price for that period.
Relative Strength Index (RSI)
Displays the standard 14-period RSI, a momentum oscillator that measures the speed and change of price movements on a scale from 0 to 100.
6. External Market Indicators
QQQ Change
Shows the percentage change in the Invesco QQQ Trust (tracking the Nasdaq-100 Index), useful for understanding broader tech market trends.
UVIX Change
Displays the percentage change in UVIX, a volatility index, providing insight into market fear and potential hedging activity.
BTC-USD
Shows the current Bitcoin price from Coinbase, useful for traders monitoring crypto correlation with equities.
Market Breadth (BRD)
Calculates the percentage difference between ATHI.US and ATLO.US (high vs. low securities), indicating overall market direction and strength.
7. Session Analysis and Volume Direction
Session Detection
The script accurately identifies different market sessions:
Pre-market: 4:00 AM to 9:30 AM
Regular market: 9:30 AM to 4:00 PM
After-hours: 4:00 PM to 8:00 PM
Closed: Outside trading hours
This detection works on any timeframe through careful calculation of current time in seconds.
Buy/Sell Volume Direction
The script analyzes buying and selling pressure by:
Counting up volume when close > open
Counting down volume when close < open
Tracking accumulated volume within the day
Calculating intraday pressure (up volume minus down volume)
Enhanced AVOL Calculation
The improved AVOL calculation works in all timeframes by:
Estimating typical pre-market and after-hours volume percentages
Combining yesterday's after-hours with today's pre-market volume
Calculating this as a percentage of the 21-day average volume
Determining buying/selling pressure by analyzing after-hours and pre-market price changes
Color-coding results: green for buying pressure, red for selling pressure
This calculation is particularly valuable because it works consistently across any timeframe.
Customization Options
Display Settings
The dashboard has two customizable tables: Volume Table and Metrics Table, with positions selectable as bottom_left or bottom_right.
All metrics can be individually toggled on/off:
Pre-market data (PVOL, P$VOL, PRVOL, PCHG%)
Volume data (AVOL, RVOL Day, RVOL 90D, Volume, SEED_YASHALGO_NSE_BREADTH:VOLUME )
Price metrics (ADR%, ATR, RSI, Price Change%)
Market indicators (QQQ, UVIX, Breadth, BTC-USD)
Analysis indicators (Volume Trend, BB Squeeze, Pre-Breakout, Breakout)
These toggle options allow traders to customize the dashboard to show only the metrics they find most valuable for their trading style.
Table and Text Customization
The dashboard's appearance can be customized:
Table background color via tableBgColor
Text color (White or Black) via textColorOption
The indicator uses smart formatting for volume and price values, automatically adding appropriate suffixes (K, M, B) for readability.
MACD Configuration for VTR
The Volume Trend calculation incorporates MACD with customizable parameters:
Fast Length: Controls the period for the fast EMA (default 3)
Slow Length: Controls the period for the slow EMA (default 9)
Signal Length: Controls the period for the signal line EMA (default 5)
MACD Weight: Controls how much influence MACD has on the volume trend score (default 0.3)
These settings allow traders to fine-tune how momentum is factored into the volume trend analysis.
Bollinger Bands and Keltner Channel Settings
The Bollinger Bands and Keltner Channels used for squeeze detection have preset (hidden) parameters:
BB Length: 20 periods
BB Multiplier: 2.0 standard deviations
Keltner Length: 20 periods
Keltner Multiplier: 1.5 ATR
These settings follow standard practice for squeeze detection while maintaining simplicity in the user interface.
Practical Trading Applications
Complete Trading Strategies
1. Squeeze Breakout Strategy
This strategy combines multiple components of the indicator:
Wait for a strong squeeze (SQZ showing ●)
Look for pre-breakout confirmation (PBK showing ● in green or red)
Enter when breakout is confirmed (BK showing ● in same direction)
Use VTR to confirm volume supports the move (VTR ≥ 65 for bullish or ≤ 35 for bearish)
Set profit targets based on ADR (Average Daily Range)
Exit when VTR begins to weaken or changes direction
2. Volume Divergence Strategy
This strategy focuses on the volume trend relative to price:
Identify when price makes a new high but VTR fails to confirm (divergence)
Look for VTR to show weakening trend (● changing to ◯ or ·)
Prepare for potential reversal when SQZ begins to form
Enter counter-trend position when PBK confirms reversal direction
Use external indicators (QQQ, BTC, Breadth) to confirm broader market support
3. Pre-Market Edge Strategy
This strategy leverages pre-market data:
Monitor AVOL for unusual pre-market activity (significantly above 100%)
Check pre-market price change direction (PCHG%)
Enter position at market open if VTR confirms direction
Use SQZ to determine if volatility is likely to expand
Exit based on RVOL declining or price reaching +/- ADR for the day
Market Context Integration
The indicator provides valuable context for trading decisions:
QQQ change shows tech market direction
BTC price shows crypto market correlation
UVIX change indicates volatility expectations
Breadth measurement shows market internals
This context helps traders avoid fighting the broader market and align trades with overall market direction.
Timeframe Optimization
The indicator is designed to work across different timeframes:
For day trading: Focus on AVOL, VTR, PBK/BK, and use shorter momentum periods
For swing trading: Focus on SQZ duration, VTR strength, and broader market indicators
For position trading: Focus on larger VTR trends and use EMA alignment weight
Advanced Analytical Components
Enhanced Volume Trend Score Calculation
The VTR score calculation is sophisticated, with the base score starting at 50 and adjusting for:
Price direction (up/down)
Volume relative to average (high/normal/low)
Volume acceleration/deceleration
Market conditions (bull/bear)
Additional factors are then applied, including:
MACD influence weighted by strength and direction
Volume change rate influence (speed)
Price/volume divergence effects
EMA alignment scores
Volatility adjustments
Breakout strength factors
Price action confirmations
The final score is clamped between 0-100, with values above 50 indicating bullish conditions and below 50 indicating bearish conditions.
Anti-False Signal Filters
The indicator employs multiple techniques to reduce false signals:
Requiring significant price range (minimum percentage movement)
Demanding strong volume confirmation (significantly above average)
Checking for consistent direction across multiple indicators
Requiring prior bar consistency (consecutive bars moving in same direction)
Counting consecutive signals to filter out noise
These filters help eliminate noise and focus on high-probability setups.
MACD Enhancement and Integration
The indicator enhances standard MACD analysis:
Calculating MACD relative strength compared to recent history
Normalizing MACD slope relative to volatility
Detecting MACD acceleration for stronger signals
Integrating MACD crossovers with other confirmation factors
EMA Analysis System
The indicator uses a comprehensive EMA analysis system:
Calculating multiple EMAs (5, 10, 21 periods)
Detecting golden cross (10 EMA crosses above 21 EMA)
Detecting death cross (10 EMA crosses below 21 EMA)
Assessing price position relative to EMAs
Measuring EMA separation percentage
Recent Enhancements and Evolution
Version 5.2 includes several improvements:
Enhanced AVOL to show buying/selling direction through color coding
Improved VTR with adaptive analysis based on market conditions
AVOL display now works in all timeframes through sophisticated estimation
Removed animal symbols and streamlined code with bright colors for better visibility
Improved anti-false signal filters throughout the system
Optimizing Indicator Settings
For Different Market Types
Range-Bound Markets:
Lower EMA Alignment Weight (0.2-0.4)
Higher Speed of Change Weight (0.8-1.0)
Focus on SQZ and PBK signals for breakout potential
Trending Markets:
Higher EMA Alignment Weight (0.7-1.0)
Moderate Speed of Change Weight (0.4-0.6)
Focus on VTR strength and BK confirmations
Volatile Markets:
Enable Volatility Filter
Enable Adaptive Volume Analysis
Lower Momentum Period (2-3)
Focus on strong volume confirmation (VTR ≥ 80 or ≤ 20)
For Different Asset Classes
Equities:
Standard settings work well
Pay attention to AVOL for gap potential
Monitor QQQ correlation
Futures:
Consider higher Volume/RVOL weight
Reduce MACD weight slightly
Pay close attention to SQZ duration
Crypto:
Higher volatility thresholds may be needed
Monitor BTC price for correlation
Focus on stronger confirmation signals
Integrated Visual System for Trading Decisions
The colored circle indicators create an intuitive visual system for quick market assessment:
Progression Sequence: SQZ (Squeeze) → PBK (Pre-Breakout) → BK (Breakout)
This sequence often occurs in order, with the squeeze leading to pre-breakout conditions, followed by an actual breakout.
VTR (Volume Trend): Provides context about the volume supporting these movements.
Color Coding: Green for bullish conditions, red for bearish conditions, and orange/gray for neutral or undefined conditions.
Fuzzy SMA with DCTI Confirmation[FibonacciFlux]FibonacciFlux: Advanced Fuzzy Logic System with Donchian Trend Confirmation
Institutional-grade trend analysis combining adaptive Fuzzy Logic with Donchian Channel Trend Intensity for superior signal quality
Conceptual Framework & Research Foundation
FibonacciFlux represents a significant advancement in quantitative technical analysis, merging two powerful analytical methodologies: normalized fuzzy logic systems and Donchian Channel Trend Intensity (DCTI). This sophisticated indicator addresses a fundamental challenge in market analysis – the inherent imprecision of trend identification in dynamic, multi-dimensional market environments.
While traditional indicators often produce simplistic binary signals, markets exist in states of continuous, graduated transition. FibonacciFlux embraces this complexity through its implementation of fuzzy set theory, enhanced by DCTI's structural trend confirmation capabilities. The result is an indicator that provides nuanced, probabilistic trend assessment with institutional-grade signal quality.
Core Technological Components
1. Advanced Fuzzy Logic System with Percentile Normalization
At the foundation of FibonacciFlux lies a comprehensive fuzzy logic system that transforms conventional technical metrics into degrees of membership in linguistic variables:
// Fuzzy triangular membership function with robust error handling
fuzzy_triangle(val, left, center, right) =>
if na(val)
0.0
float denominator1 = math.max(1e-10, center - left)
float denominator2 = math.max(1e-10, right - center)
math.max(0.0, math.min(left == center ? val <= center ? 1.0 : 0.0 : (val - left) / denominator1,
center == right ? val >= center ? 1.0 : 0.0 : (right - val) / denominator2))
The system employs percentile-based normalization for SMA deviation – a critical innovation that enables self-calibration across different assets and market regimes:
// Percentile-based normalization for adaptive calibration
raw_diff = price_src - sma_val
diff_abs_percentile = ta.percentile_linear_interpolation(math.abs(raw_diff), normLookback, percRank) + 1e-10
normalized_diff_raw = raw_diff / diff_abs_percentile
normalized_diff = useClamping ? math.max(-clampValue, math.min(clampValue, normalized_diff_raw)) : normalized_diff_raw
This normalization approach represents a significant advancement over fixed-threshold systems, allowing the indicator to automatically adapt to varying volatility environments and maintain consistent signal quality across diverse market conditions.
2. Donchian Channel Trend Intensity (DCTI) Integration
FibonacciFlux significantly enhances fuzzy logic analysis through the integration of Donchian Channel Trend Intensity (DCTI) – a sophisticated measure of trend strength based on the relationship between short-term and long-term price extremes:
// DCTI calculation for structural trend confirmation
f_dcti(src, majorPer, minorPer, sigPer) =>
H = ta.highest(high, majorPer) // Major period high
L = ta.lowest(low, majorPer) // Major period low
h = ta.highest(high, minorPer) // Minor period high
l = ta.lowest(low, minorPer) // Minor period low
float pdiv = not na(L) ? l - L : 0 // Positive divergence (low vs major low)
float ndiv = not na(H) ? H - h : 0 // Negative divergence (major high vs high)
float divisor = pdiv + ndiv
dctiValue = divisor == 0 ? 0 : 100 * ((pdiv - ndiv) / divisor) // Normalized to -100 to +100 range
sigValue = ta.ema(dctiValue, sigPer)
DCTI provides a complementary structural perspective on market trends by quantifying the relationship between short-term and long-term price extremes. This creates a multi-dimensional analysis framework that combines adaptive deviation measurement (fuzzy SMA) with channel-based trend intensity confirmation (DCTI).
Multi-Dimensional Fuzzy Input Variables
FibonacciFlux processes four distinct technical dimensions through its fuzzy system:
Normalized SMA Deviation: Measures price displacement relative to historical volatility context
Rate of Change (ROC): Captures price momentum over configurable timeframes
Relative Strength Index (RSI): Evaluates cyclical overbought/oversold conditions
Donchian Channel Trend Intensity (DCTI): Provides structural trend confirmation through channel analysis
Each dimension is processed through comprehensive fuzzy sets that transform crisp numerical values into linguistic variables:
// Normalized SMA Deviation - Self-calibrating to volatility regimes
ndiff_LP := fuzzy_triangle(normalized_diff, norm_scale * 0.3, norm_scale * 0.7, norm_scale * 1.1)
ndiff_SP := fuzzy_triangle(normalized_diff, norm_scale * 0.05, norm_scale * 0.25, norm_scale * 0.5)
ndiff_NZ := fuzzy_triangle(normalized_diff, -norm_scale * 0.1, 0.0, norm_scale * 0.1)
ndiff_SN := fuzzy_triangle(normalized_diff, -norm_scale * 0.5, -norm_scale * 0.25, -norm_scale * 0.05)
ndiff_LN := fuzzy_triangle(normalized_diff, -norm_scale * 1.1, -norm_scale * 0.7, -norm_scale * 0.3)
// DCTI - Structural trend measurement
dcti_SP := fuzzy_triangle(dcti_val, 60.0, 85.0, 101.0) // Strong Positive Trend (> ~85)
dcti_WP := fuzzy_triangle(dcti_val, 20.0, 45.0, 70.0) // Weak Positive Trend (~30-60)
dcti_Z := fuzzy_triangle(dcti_val, -30.0, 0.0, 30.0) // Near Zero / Trendless (~+/- 20)
dcti_WN := fuzzy_triangle(dcti_val, -70.0, -45.0, -20.0) // Weak Negative Trend (~-30 - -60)
dcti_SN := fuzzy_triangle(dcti_val, -101.0, -85.0, -60.0) // Strong Negative Trend (< ~-85)
Advanced Fuzzy Rule System with DCTI Confirmation
The core intelligence of FibonacciFlux lies in its sophisticated fuzzy rule system – a structured knowledge representation that encodes expert understanding of market dynamics:
// Base Trend Rules with DCTI Confirmation
cond1 = math.min(ndiff_LP, roc_HP, rsi_M)
strength_SB := math.max(strength_SB, cond1 * (dcti_SP > 0.5 ? 1.2 : dcti_Z > 0.1 ? 0.5 : 1.0))
// DCTI Override Rules - Structural trend confirmation with momentum alignment
cond14 = math.min(ndiff_NZ, roc_HP, dcti_SP)
strength_SB := math.max(strength_SB, cond14 * 0.5)
The rule system implements 15 distinct fuzzy rules that evaluate various market conditions including:
Established Trends: Strong deviations with confirming momentum and DCTI alignment
Emerging Trends: Early deviation patterns with initial momentum and DCTI confirmation
Weakening Trends: Divergent signals between deviation, momentum, and DCTI
Reversal Conditions: Counter-trend signals with DCTI confirmation
Neutral Consolidations: Minimal deviation with low momentum and neutral DCTI
A key innovation is the weighted influence of DCTI on rule activation. When strong DCTI readings align with other indicators, rule strength is amplified (up to 1.2x). Conversely, when DCTI contradicts other indicators, rule impact is reduced (as low as 0.5x). This creates a dynamic, self-adjusting system that prioritizes high-conviction signals.
Defuzzification & Signal Generation
The final step transforms fuzzy outputs into a precise trend score through center-of-gravity defuzzification:
// Defuzzification with precise floating-point handling
denominator = strength_SB + strength_WB + strength_N + strength_WBe + strength_SBe
if denominator > 1e-10
fuzzyTrendScore := (strength_SB * STRONG_BULL + strength_WB * WEAK_BULL +
strength_N * NEUTRAL + strength_WBe * WEAK_BEAR +
strength_SBe * STRONG_BEAR) / denominator
The resulting FuzzyTrendScore ranges from -1.0 (Strong Bear) to +1.0 (Strong Bull), with critical threshold zones at ±0.3 (Weak trend) and ±0.7 (Strong trend). The histogram visualization employs intuitive color-coding for immediate trend assessment.
Strategic Applications for Institutional Trading
FibonacciFlux provides substantial advantages for sophisticated trading operations:
Multi-Timeframe Signal Confirmation: Institutional-grade signal validation across multiple technical dimensions
Trend Strength Quantification: Precise measurement of trend conviction with noise filtration
Early Trend Identification: Detection of emerging trends before traditional indicators through fuzzy pattern recognition
Adaptive Market Regime Analysis: Self-calibrating analysis across varying volatility environments
Algorithmic Strategy Integration: Well-defined numerical output suitable for systematic trading frameworks
Risk Management Enhancement: Superior signal fidelity for risk exposure optimization
Customization Parameters
FibonacciFlux offers extensive customization to align with specific trading mandates and market conditions:
Fuzzy SMA Settings: Configure baseline trend identification parameters including SMA, ROC, and RSI lengths
Normalization Settings: Fine-tune the self-calibration mechanism with adjustable lookback period, percentile rank, and optional clamping
DCTI Parameters: Optimize trend structure confirmation with adjustable major/minor periods and signal smoothing
Visualization Controls: Customize display transparency for optimal chart integration
These parameters enable precise calibration for different asset classes, timeframes, and market regimes while maintaining the core analytical framework.
Implementation Notes
For optimal implementation, consider the following guidance:
Higher timeframes (4H+) benefit from increased normalization lookback (800+) for stability
Volatile assets may require adjusted clamping values (2.5-4.0) for optimal signal sensitivity
DCTI parameters should be aligned with chart timeframe (higher timeframes require increased major/minor periods)
The indicator performs exceptionally well as a trend filter for systematic trading strategies
Acknowledgments
FibonacciFlux builds upon the pioneering work of Donovan Wall in Donchian Channel Trend Intensity analysis. The normalization approach draws inspiration from percentile-based statistical techniques in quantitative finance. This indicator is shared for educational and analytical purposes under Attribution-NonCommercial-ShareAlike 4.0 International (CC BY-NC-SA 4.0) license.
Past performance does not guarantee future results. All trading involves risk. This indicator should be used as one component of a comprehensive analysis framework.
Shout out @DonovanWall
Danger Signals from The Trading MindwheelThe " Danger Signals " indicator, a collaborative creation from the minds at Amphibian Trading and MARA Wealth, serves as your vigilant lookout in the volatile world of stock trading. Drawing from the wisdom encapsulated in "The Trading Mindwheel" and the successful methodologies of legends like William O'Neil and Mark Minervini, this tool is engineered to safeguard your trading journey.
Core Features:
Real-Time Alerts: Identify critical danger signals as they emerge in the market. Whether it's a single day of heightened risk or a pattern forming, stay informed with specific danger signals and a tally of signals for comprehensive decision-making support. The indicator looks for over 30 different signals ranging from simple closing ranges to more complex signals like blow off action.
Tailored Insights with Portfolio Heat Integration: Pair with the "Portfolio Heat" indicator to customize danger signals based on your current positions, entry points, and stops. This personalized approach ensures that the insights are directly relevant to your trading strategy. Certain signals can have different meanings based on where your trade is at in its lifecycle. Blow off action at the beginning of a trend can be viewed as strength, while after an extended run could signal an opportunity to lock in profits.
Forward-Looking Analysis: Leverage the 'Potential Danger Signals' feature to assess future risks. Enter hypothetical price levels to understand potential market reactions before they unfold, enabling proactive trade management.
The indicator offers two different modes of 'Potential Danger Signals', Worst Case or Immediate. Worst Case allows the user to input any price and see what signals would fire based on price reaching that level, while the Immediate mode looks for potential Danger Signals that could happen on the next bar.
This is achieved by adding and subtracting the average daily range to the current bars close while also forecasting the next values of moving averages, vwaps, risk multiples and the relative strength line to see if a Danger Signal would trigger.
User Customization: Flexibility is at your fingertips with toggle options for each danger signal. Tailor the indicator to match your unique trading style and risk tolerance. No two traders are the same, that is why each signal is able to be turned on or off to match your trading personality.
Versatile Application: Ideal for growth stock traders, momentum swing traders, and adherents of the CANSLIM methodology. Whether you're a novice or a seasoned investor, this tool aligns with strategies influenced by trading giants.
Validation and Utility:
Inspired by the trade management principles of Michael Lamothe, the " Danger Signals " indicator is more than just a tool; it's a reflection of tested strategies that highlight the importance of risk management. Through rigorous validation, including the insights from "The Trading Mindwheel," this indicator helps traders navigate the complexities of the market with an informed, strategic approach.
Whether you're contemplating a new position or evaluating an existing one, the " Danger Signals " indicator is designed to provide the clarity needed to avoid potential pitfalls and capitalize on opportunities with confidence. Embrace a smarter way to trade, where awareness and preparation open the door to success.
Let's dive into each of the components of this indicator.
Volume: Volume refers to the number of shares or contracts traded in a security or an entire market during a given period. It is a measure of the total trading activity and liquidity, indicating the overall interest in a stock or market.
Price Action: the analysis of historical prices to inform trading decisions, without the use of technical indicators. It focuses on the movement of prices to identify patterns, trends, and potential reversal points in the market.
Relative Strength Line: The RS line is a popular tool used to compare the performance of a stock, typically calculated as the ratio of the stock's price to a benchmark index's price. It helps identify outperformers and underperformers relative to the market or a specific sector. The RS value is calculated by dividing the close price of the chosen stock by the close price of the comparative symbol (SPX by default).
Average True Range (ATR): ATR is a market volatility indicator used to show the average range prices swing over a specified period. It is calculated by taking the moving average of the true ranges of a stock for a specific period. The true range for a period is the greatest of the following three values:
The difference between the current high and the current low.
The absolute value of the current high minus the previous close.
The absolute value of the current low minus the previous close.
Average Daily Range (ADR): ADR is a measure used in trading to capture the average range between the high and low prices of an asset over a specified number of past trading days. Unlike the Average True Range (ATR), which accounts for gaps in the price from one day to the next, the Average Daily Range focuses solely on the trading range within each day and averages it out.
Anchored VWAP: AVWAP gives the average price of an asset, weighted by volume, starting from a specific anchor point. This provides traders with a dynamic average price considering both price and volume from a specific start point, offering insights into the market's direction and potential support or resistance levels.
Moving Averages: Moving Averages smooth out price data by creating a constantly updated average price over a specific period of time. It helps traders identify trends by flattening out the fluctuations in price data.
Stochastic: A stochastic oscillator is a momentum indicator used in technical analysis that compares a particular closing price of an asset to a range of its prices over a certain period of time. The theory behind the stochastic oscillator is that in a market trending upwards, prices will tend to close near their high, and in a market trending downwards, prices close near their low.
While each of these components offer unique insights into market behavior, providing sell signals under specific conditions, the power of combining these different signals lies in their ability to confirm each other's signals. This in turn reduces false positives and provides a more reliable basis for trading decisions
These signals can be recognized at any time, however the indicators power is in it's ability to take into account where a trade is in terms of your entry price and stop.
If a trade just started, it hasn’t earned much leeway. Kind of like a new employee that shows up late on the first day of work. It’s less forgivable than say the person who has been there for a while, has done well, is on time, and then one day comes in late.
Contextual Sensitivity:
For instance, a high volume sell-off coupled with a bearish price action pattern significantly strengthens the sell signal. When the price closes below an Anchored VWAP or a critical moving average in this context, it reaffirms the bearish sentiment, suggesting that the momentum is likely to continue downwards.
By considering the relative strength line (RS) alongside volume and price action, the indicator can differentiate between a normal retracement in a strong uptrend and a when a stock starts to become a laggard.
The integration of ATR and ADR provides a dynamic framework that adjusts to the market's volatility. A sudden increase in ATR or a character change detected through comparing short-term and long-term ADR can alert traders to emerging trends or reversals.
The "Danger Signals" indicator exemplifies the power of integrating diverse technical indicators to create a more sophisticated, responsive, and adaptable trading tool. This approach not only amplifies the individual strengths of each indicator but also mitigates their weaknesses.
Portfolio Heat Indicator can be found by clicking on the image below
Danger Signals Included
Price Closes Near Low - Daily Closing Range of 30% or Less
Price Closes Near Weekly Low - Weekly Closing Range of 30% or Less
Price Closes Near Daily Low on Heavy Volume - Daily Closing Range of 30% or Less on Heaviest Volume of the Last 5 Days
Price Closes Near Weekly Low on Heavy Volume - Weekly Closing Range of 30% or Less on Heaviest Volume of the Last 5 Weeks
Price Closes Below Moving Average - Price Closes Below One of 5 Selected Moving Averages
Price Closes Below Swing Low - Price Closes Below Most Recent Swing Low
Price Closes Below 1.5 ATR - Price Closes Below Trailing ATR Stop Based on Highest High of Last 10 Days
Price Closes Below AVWAP - Price Closes Below Selected Anchored VWAP (Anchors include: High of base, Low of base, Highest volume of base, Custom date)
Price Shows Aggressive Selling - Current Bars High is Greater Than Previous Day's High and Closes Near the Lows on Heaviest Volume of the Last 5 Days
Outside Reversal Bar - Price Makes a New High and Closes Near the Lows, Lower Than the Previous Bar's Low
Price Shows Signs of Stalling - Heavy Volume with a Close of Less than 1%
3 Consecutive Days of Lower Lows - 3 Days of Lower Lows
Close Lower than 3 Previous Lows - Close is Less than 3 Previous Lows
Character Change - ADR of Last Shorter Length is Larger than ADR of Longer Length
Fast Stochastic Crosses Below Slow Stochastic - Fast Stochastic Crosses Below Slow Stochastic
Fast & Slow Stochastic Curved Down - Both Stochastic Lines Close Lower than Previous Day for 2 Consecutive Days
Lower Lows & Lower Highs Intraday - Lower High and Lower Low on 30 Minute Timeframe
Moving Average Crossunder - Selected MA Crosses Below Other Selected MA
RS Starts Curving Down - Relative Strength Line Closes Lower than Previous Day for 2 Consecutive Days
RS Turns Negative Short Term - RS Closes Below RS of 7 Days Ago
RS Underperforms Price - Relative Strength Line Not at Highs, While Price Is
Moving Average Begins to Flatten Out - First Day MA Doesn't Close Higher
Price Moves Higher on Lighter Volume - Price Makes a New High on Light Volume and 15 Day Average Volume is Less than 50 Day Average
Price Hits % Target - Price Moves Set % Higher from Entry Price
Price Hits R Multiple - Price hits (Entry - Stop Multiplied by Setting) and Added to Entry
Price Hits Overhead Resistance - Price Crosses a Swing High from a Monthly Timeframe Chart from at Least 1 Year Ago
Price Hits Fib Level - Price Crosses a Fib Extension Drawn From Base High to Low
Price Hits a Psychological Level - Price Crosses a Multiple of 0 or 5
Heavy Volume After Significant Move - Above Average and Heaviest Volume of the Last 5 Days 35 Bars or More from Breakout
Moving Averages Begin to Slope Downward - Moving Averages Fall for 2 Consecutive Days
Blow Off Action - Highest Volume, Largest Spread, Multiple Gaps in a Row 35 Bars or More Post Breakout
Late Buying Frenzy - ANTS 35 Bars or More Post Breakout
Exhaustion Gap - Gap Up 5% or Higher with Price 125% or More Above 200sma
Algorganic Buy / Sell / X-Exit Signal [UOI]The " Algorganic Buy / Sell / X-Exit Signal " indicator is an Algorithmic Machine Learning-based superpack indicator that generates buy and sell signals for trading in financial markets. It is packed with conditional statemnets and filters to avoid false signals and utilizes Nearest Neighbors Model (NNM) algorithm with a distance metric to determine the direction of the price movement and make predictions according to the next past 12 bars for the next 4 to 8 bars in whatever chart frame the trader is using. Ideal time frames are 2, 3, 5 and 15 minutes for option traders and scalpers can use it on the 1 minute chart.
The indicator takes into account various technical indicators such as Relative Strength Index (RSI), Average Directional Index (ADX), CCI, Stochastic, ATR and major EMAs and has two optimizer for confirmation. These indicators are used as features to train the Machine Learning model and at the same time to provide better buy and sell signals with multiple "if" conditions.
The NNM algorithm calculates the distance between the current data point and historical data points. It works like a mixture of ATR and ADX. By considering the nearest neighbors, the model predicts the direction of future price movement. The predictions are filtered using additional criteria, including volatility, trend detection, and, ATR and ADX values.
The indicator provides visual signals on the chart, indicating when to enter a long (buy) or short (sell) position but traders should also be mindful of support and resistance levels and oversold and overbought conditions and the higher timeframe signal. It also offers options for dynamic exits based on specific conditions or fixed exits after a predefined number of bars.
Additionally, the indicator includes filters based on EMA (Exponential Moving Average), SMA (Simple Moving Average), and a kernel regression technique. These filters help to refine the signals and reduce noise in the predictions.
The indicator also includes alert functionalities to notify traders of entry and exit points.
The Algorganic is a versatile trading indicator that provides buy and sell signals based on the analysis of various popular technical indicators in combination with Machine Learning techniques with technical analysis and support and resistance levels to generate trading signals, helping traders make informed decisions. This powerful tool overlays on your price chart and can be used across different markets and timeframes.
Key Features:
1. Dynamic EMA Support and Resistance Levels: You can define the top and bottom lines as either 'Support' or 'Resistance'. These levels are calculated using an Exponential Moving Average (EMA) and Average True Range (ATR) inputs.
2. Exponential Moving Average (EMA): The EMA is calculated based on the EMA length input provided by the user, with a default setting of 21 periods.
3. Average True Range (ATR): The ATR is calculated with a default length of 14 periods and is used in determining the support and resistance levels.
4. Buy/Sell Signals: The indicator provides buy and sell signals when the price hits the defined support or resistance levels. These signals are represented by X-shapes plotted on the chart, with green indicating a hit on support (buy signal), and red indicating a hit on resistance (sell signal).
5. Trend Strength Analysis: It uses a unique combination of technical indicators like MACD, RSI, Velocity, CCI, Stochastic, and a custom trend strength indicator. The settings for each of these indicators can be customized according to user preference.
6. Bull/Bear Tug of War: This feature paints the little triangles green if the majority of the indicators are bullish, and red if the majority are bearish. This is a powerful feature to visualize the overall market sentiment.
7. Buy/Sell Alert: The script generates alerts for potential buy and sell signals. Alerts contain information about the signal type, ticker symbol, and current price.
8. Plot EMA Line: This indicator includes an option to display an additional EMA line on the chart, which can be toggled on or off as per the user's choice.
How to use it:
You basically need to master riding this machine. There are a lot of conditions that have been added to make sure novice traders do not make a mistake. The image below shows how to use the indicator. Pay attention to colors:
Longer time frame you should pay attention to the EMA lines and over bought and oversold levels in the optimizers. here is an example:
And another example on 15 min timeframe:
On top of all the above, this indicator has a built-in advanced support and resistance tool that dynamically identifies pivot points and their corresponding support and resistance zones based on the historical data of a given asset. So what this means is that you should ignore a buy signal very close to a resistance and only enter when the resistance is broken.
Here are the configurable support and resistance parameters:
1. Pivot Period : The period considered for pivot detection. The range is between 4 to 30 days with a default value of 25.
2. Source: The price point to be used as the source for pivot detection. You can choose between 'High/Low' and 'Close/Open'.
3. Maximum Number of Pivot: This defines the maximum number of pivot points that the algorithm will store. This can be anywhere from 5 to 100, with 45 as the default value.
4. Maximum Channel Width % : This sets the maximum width of the support/resistance channel as a percentage. Minimum value is 1, with a default value of 10. Higher numbers capture longer timeframe and lower number shorter timeframes. For scalping use 5 or 8 for swing use 12 or 14.
5. Maximum Number of Lines: This sets the maximum number of support/resistance lines displayed on the chart. It ranges from 1 to 15 with a default of 10.
6. Minimum Strength: This is the minimum strength of the support or resistance line, defined by the number of times price touches it. It ranges from 1 to 10 with a default of 2.
7. Line Style: This option allows the user to choose the line style between 'Solid', 'Dotted', and 'Dashed'.
8. Line Width: This allows users to choose the width of the line ranging from 1 to 4.
9. Resistance Color and Support Color: These define the colors for the resistance and support lines.
The script also includes functions to calculate if the price has crossed over or under a support or resistance line.
The S/R assist uses these inputs to calculate pivot highs and lows, create support and resistance zones, and plot these on the chart. When the price crosses a support or resistance line, the script can identify this as a possible trading signal. The lines' strengths are also calculated, and only those with strengths above the user-defined minimum are drawn on the chart.
Asset Strength Index <DOSALGO>The Asset Strength Index (ASI) is a comprehensive dashboard indicator designed to provide traders with a broader perspective on market dynamics. Instead of viewing an asset in isolation, the ASI measures its relative strength against a basket of key global assets: Bonds, Gold, and the US Dollar.
This tool is built to give you an immediate, visual understanding of how the asset you are charting is performing in the context of the wider financial landscape. The analysis is presented across three distinct time horizons—Short-Term, Medium-Term, and Long-Term—allowing for a nuanced view of performance.
How It Can Be Useful
The core purpose of the ASI is to serve as a contextual analysis tool. By understanding an asset's strength or weakness relative to others, traders can gain valuable insights that may not be apparent from price action alone.
Inter-Market Confirmation: Use the dashboard to confirm your trading ideas. For example, a bullish outlook on a stock index could be strengthened if it shows increasing strength against safe-haven assets like Gold and Bonds.
Risk Sentiment Barometer: Gauge the prevailing risk-on or risk-off sentiment. If the US Dollar and Bonds are showing strength while your asset is weakening, it could indicate a broader market shift towards safety.
Multi-Term Perspective: Quickly assess if short-term movements are aligned with the longer-term trend. A short-term dip might be less concerning if the asset's long-term relative strength remains high.
How to Use It
The ASI dashboard is displayed directly on your chart. The values are presented as percentages, indicating the relative strength for each term.
Monitor the Readings: Observe the percentage values in the "S. Term," "M. Term," and "L. Term" columns. Positive values suggest relative strength, while negative values indicate relative weakness.
Look for Trends: The arrows (▲ or ▼) next to the percentage show the most recent change, helping you spot developing trends in relative strength.
Combine with Your Strategy: The ASI is not a standalone signal generator. It is most effective when used to supplement your existing trading system, helping you make more informed decisions by adding a layer of sophisticated, inter-market analysis.
The dashboard's appearance is fully customizable, allowing you to adjust its position, size, and colors to fit your chart layout.
Disclaimer
The Asset Strength Index (ASI) is a tool for market analysis and should not be considered financial advice. All trading involves risk, and past performance is not indicative of future results. Always use this indicator in conjunction with your own comprehensive trading plan and risk management strategy.
LevelUp^ Up On Volume ScreenerThe Up On Volume Screener is a powerful scanner designed to identify stocks exhibiting strong bullish momentum, characterized by a higher close on the day or week accompanied by a significant spike in trading volume compared to the average. This screener allows traders to customize parameters such as moving average lengths, closing range requirements, and proximity to 52-week highs using multiples of the ATR (average true range).
By pinpointing stocks with robust buying pressure and high volume, the Up On Volume screener helps traders uncover potential breakout opportunities, early trend leaders, and stocks demonstrating relative strength, making it an essential tool for momentum, swing, and growth trading strategies.
🔹 Why Search For Up On Volume?
▪ Confirmation of Bullish Momentum: Stocks that close higher on the day/week signal buying pressure and bullish sentiment throughout the session. This helps traders and investors identify names that are attracting demand, possibly due to news, earnings, or sector strength.
▪ Volume Adds Conviction: When a stock closes up with increased volume, it suggests strong participation behind the move — not just a “head fake” or a thinly traded rally. High volume confirms that institutional players or multiple market participants are involved, which often leads to more reliable price trends.
▪ Early Stage Moves: Daily breakouts can often mark the beginning of a larger trend. Catching stocks on days they close up helps pinpoint emerging leaders and stocks transitioning from accumulation to bullish phases.
▪ Technical Strength: A bullish close (especially in the top half of the day’s price range) is a technical sign of demand. This is a favored criterion in many technical analysis strategies for swing trading, momentum trading, and even fundamental breakouts.
🔹 When Is Up On Volume Screen Most Helpful?
▪ After Market Close: Stocks that show strength and close up on high volume often show continued follow-through in the coming days/weeks.
▪ After Major News/Events: When stocks respond positively to news releases, earnings, or sector movements, searching for those that close up can help you catch momentum before it’s widely recognized.
▪ Trend Days: On days when the market is trending (not sideways or choppy), screening for stocks closing up helps you align with the strongest moves and avoid false signals.
▪ Early in Bullish Cycles: Searching for stocks closing up during the early stage of a market rally or sector rotation can help growth traders get in ahead of sustained upward moves.a
▪ Relative Strength Signals True Leadership: When most stocks decline in a weak market, those that hold firm or rise are showing clear relative strength. This means buyers are stepping in even when the broader mood is negative, often signaling institutional accumulation — these are the names likely to become tomorrow’s winners.
▪ Early Clues to New Cycles: Throughout history, the biggest winners in bull markets often began their runs during corrections and bear phases, not after the headlines turn positive. By focusing on stocks that close green on red days, you’re hunting for companies quietly building buying pressure, poised to break out when the tide turns.
▪ Faster Recoveries and Outperformance: Stocks that resist declines tend to rebound earlier and outpace the broader market once conditions improve. These resilient names frequently end up delivering outsized returns, often leading sector rallies or driving new market themes.
🔹 Screening Features - Setting Your Search Criteria
There are various search options that can be customized.
✓ Volume Gap Up %: Minimum volume percent change over the average volume.
✓ Moving Average: Set length for average volume calculations on daily and weekly timeframes.
✓ Closing Range %: Specify the preferred closing range on the day or week.
✓ Price With X ATR of 52-Week High: Filter for stocks within X ATRs of their 52-week highs.
🔹 Installation And Usage
▪ Mark this indicator as a Favorite.
▪ Use the Pine Screener to search for stocks.
▪ Save the search results to a watchlist.
▪ View the watchlist in TradingView.
🔹 Note
Some high-volume breakout scans rely on proprietary formulas. With this screener, every filter can be researched and verified - no black box! The only variables are price, volume % change, closing range and price within a specified ATR of the 52-week high.
Advanced Currency Strength Meter# Advanced Currency Strength Meter (ACSM)
The Advanced Currency Strength Meter (ACSM) is a scientifically-based indicator that measures relative currency strength using established academic methodologies from international finance and behavioral economics. This indicator provides traders with a comprehensive view of currency market dynamics through multiple analytical frameworks.
### Theoretical Foundation
#### 1. Purchasing Power Parity (PPP) Theory
Based on Cassel's (1918) seminal work and refined by Froot & Rogoff (1995), PPP suggests that exchange rates should reflect relative price levels between countries. The ACSM momentum component captures deviations from long-term equilibrium relationships, providing insights into currency misalignments.
#### 2. Uncovered Interest Rate Parity (UIP) and Carry Trade Theory
Building on Fama (1984) and Lustig et al. (2007), the indicator incorporates volatility-adjusted momentum to capture carry trade flows and interest rate differentials that drive currency strength. This approach helps identify currencies benefiting from interest rate differentials.
#### 3. Behavioral Finance and Currency Momentum
Following Burnside et al. (2011) and Menkhoff et al. (2012), the model recognizes that currency markets exhibit persistent momentum effects due to behavioral biases and institutional flows. The indicator captures these momentum patterns for trading opportunities.
#### 4. Portfolio Balance Theory
Based on Branson & Henderson (1985), the relative strength matrix captures how portfolio rebalancing affects currency cross-rates and creates trading opportunities between different currency pairs.
### Technical Implementation
#### Core Methodologies:
- **Z-Score Normalization**: Following Sharpe (1994), provides statistical significance testing without arbitrary scaling
- **Momentum Analysis**: Uses return-based metrics (Jegadeesh & Titman, 1993) for trend identification
- **Volatility Adjustment**: Implements Average True Range methodology (Wilder, 1978) for risk-adjusted strength
- **Composite Scoring**: Equal-weight methodology to avoid overfitting and maintain robustness
- **Correlation Analysis**: Risk management framework based on Markowitz (1952) portfolio theory
#### Key Features:
- **Multi-Source Data Integration**: Supports OANDA, Futures, and CFD data sources
- **Scientific Methodology**: No arbitrary scaling or curve-fitting; all calculations based on established statistical methods
- **Comprehensive Dashboard**: Clean, professional table showing currency strengths and best trading pairs
- **Alert System**: Automated notifications for strong/weak currency conditions and extreme values
- **Best Pair Identification**: Algorithmic detection of highest-potential trading opportunities
### Practical Applications
#### For Swing Traders:
- Identify currencies in strong uptrends or downtrends
- Select optimal currency pairs based on relative strength divergence
- Time entries based on momentum convergence/divergence
#### For Day Traders:
- Use with real-time futures data for intraday opportunities
- Monitor currency correlations for risk management
- Detect early reversal signals through extreme value alerts
#### For Portfolio Managers:
- Multi-currency exposure analysis
- Risk management through correlation monitoring
- Strategic currency allocation decisions
### Visual Design
The indicator features a clean, professional dashboard that displays:
- **Currency Strength Values**: Each major currency (EUR, GBP, JPY, CHF, AUD, CAD, NZD, USD) with color-coded strength values
- **Best Trading Pairs**: Filtered list of highest-potential currency pairs with BUY/SELL signals
- **Market Analysis**: Real-time identification of strongest and weakest currencies
- **Potential Score**: Quantitative measure of trading opportunity strength
### Data Sources and Latency
The indicator supports multiple data sources to accommodate different trading needs:
- **OANDA (Delayed)**: Free data with 15-20 minute delay, suitable for swing trading
- **Futures (Real-time)**: CME currency futures for real-time analysis
- **CFDs**: Alternative real-time data source option
### Mathematical Framework
#### Strength Calculation:
Momentum = (Price - Price ) / Price * 100
Z-Score = (Price - Mean) / Standard Deviation
Volatility-Adjusted = Momentum / ATR-based Volatility
Composite = 0.5 * Momentum + 0.3 * Z-Score + 0.2 * Volatility-Adjusted
#### USD Strength Derivation:
USD strength is calculated as the weighted average of all USD-based pairs, providing a true baseline for relative strength comparison.
### Performance Considerations
The indicator is optimized for:
- **Computational Efficiency**: Uses Pine Script v6 best practices
- **Memory Management**: Appropriate lookback periods and array handling
- **Visual Clarity**: Clean table design optimized for both light and dark themes
- **Alert Reliability**: Robust signal generation with statistical significance testing
### Limitations and Risk Disclosure
- Model performance may vary during extreme market stress (Black Swan events)
- Requires stable data feeds for accurate calculations
- Not optimized for high-frequency scalping strategies
- Central bank interventions may temporarily distort signals
- Performance assumes normal market conditions with behavioral adjustments
### Academic References
- Branson, W. H., & Henderson, D. W. (1985). "The Specification and Influence of Asset Markets"
- Burnside, C., Eichenbaum, M., & Rebelo, S. (2011). "Carry Trade and Momentum in Currency Markets"
- Cassel, G. (1918). "Abnormal Deviations in International Exchanges"
- Fama, E. F. (1984). "Forward and Spot Exchange Rates"
- Froot, K. A., & Rogoff, K. (1995). "Perspectives on PPP and Long-Run Real Exchange Rates"
- Jegadeesh, N., & Titman, S. (1993). "Returns to Buying Winners and Selling Losers"
- Lustig, H., Roussanov, N., & Verdelhan, A. (2007). "Common Risk Factors in Currency Markets"
- Markowitz, H. (1952). "Portfolio Selection"
- Menkhoff, L., Sarno, L., Schmeling, M., & Schrimpf, A. (2012). "Carry Trades and Global FX Volatility"
- Sharpe, W. F. (1994). "The Sharpe Ratio"
- Wilder, J. W. (1978). "New Concepts in Technical Trading Systems"
### Usage Instructions
1. **Setup**: Add the indicator to your chart and select your preferred data source
2. **Currency Selection**: Choose which currencies to analyze (default: all major currencies)
3. **Methodology**: Select calculation method (Composite recommended for most users)
4. **Monitoring**: Watch the dashboard for strength changes and best pair opportunities
5. **Alerts**: Set up notifications for strong/weak currency conditions
