Dynamic Score PSAR [QuantAlgo]Dynamic Score PSAR 📈🧬
The Dynamic Score PSAR by QuantAlgo introduces an innovative approach to trend detection by utilizing a dynamic trend scoring technique in combination with the Parabolic SAR. This method goes beyond traditional trend-following indicators by evaluating market momentum through a scoring system that analyzes price behavior over a customizable window. By dynamically adjusting to evolving market conditions, this indicator provides clearer, more adaptive trend signals that help traders and investors anticipate market reversals and capitalize on momentum shifts with greater precision.
💫 Conceptual Foundation and Innovation
At the core of the Dynamic Score PSAR is the dynamic trend score system, which assesses price movements by comparing normalized PSAR values across a range of historical data points. This dynamic trend scoring technique offers a unique, probabilistic approach to trend analysis by evaluating how the current market compares to past price movements. Unlike traditional PSAR indicators that rely on static parameters, this scoring mechanism allows the indicator to adjust in real time to market fluctuations, offering traders and investors a more responsive and insightful view of trends. This innovation makes the Dynamic Score PSAR particularly effective in detecting shifts in momentum and potential reversals, even in volatile or complex market environments.
✨ Technical Composition and Calculation
The Dynamic Score PSAR is composed of several advanced components designed to provide a higher probability of detecting accurate trend shifts. The key innovation lies in the dynamic trend scoring technique, which iterates over historical PSAR values and evaluates price momentum through a dynamic scoring system. By comparing the current normalized PSAR value with previous data points over a user-defined window, the system generates a score that reflects the strength and direction of the trend. This allows for a more refined and responsive detection of trends compared to static, traditional indicators.
To enhance clarity, the PSAR values are normalized against an Exponential Moving Average (EMA), providing a standardized framework for comparison. This normalization ensures that the indicator adapts dynamically to market conditions, making it more effective in volatile markets. The smoothing process reduces noise, helping traders and investors focus on significant trend signals.
Additionally, users can adjust the length of the data window and the sensitivity thresholds for detecting uptrends and downtrends, providing flexibility for different trading and investing environments.
📈 Features and Practical Applications
Customizable Window Length: Adjust the window length to control the indicator’s sensitivity to recent price movements. This provides flexibility for short-term or long-term trend analysis.
Uptrend/Downtrend Thresholds: Set customizable thresholds for identifying uptrends and downtrends. These thresholds define when trend signals are triggered, offering adaptability to different market conditions.
Bar Coloring and Gradient Visualization: Visual cues, including color-coded bars and gradient fills, make it easier to interpret market trends and identify key moments for potential trend reversals.
Momentum Confirmation: The dynamic trend scoring system evaluates price action over time, providing a probabilistic measure of market momentum to confirm the strength and direction of a trend.
⚡️ How to Use
✅ Add the Indicator: Add the Dynamic Score PSAR to your favourites, then to your chart and adjust the PSAR settings, window length, and trend thresholds to match your preferences. Customize the sensitivity to price movements by tweaking the window length and thresholds for different market conditions.
👀 Monitor Trend Shifts: Watch for trend changes as the normalized PSAR values cross key thresholds, and use the dynamic score to confirm the strength and direction of trends. Bar coloring and background fills visually highlight key moments for trend shifts, making it easier to spot reversals.
🔔 Set Alerts: Configure alerts for significant trend crossovers and reversals, ensuring you can act on market movements promptly, even when you’re not actively monitoring the charts.
🌟 Summary and Usage Tips
The Dynamic Score PSAR by QuantAlgo is a powerful tool that combines traditional trend-following techniques with the flexibility of a dynamic trend scoring system. This innovative approach provides clearer, more adaptive trend signals, reducing the risk of false entries and exits while helping traders and investors capture significant market moves. The ability to adjust the indicator’s sensitivity and thresholds makes it versatile across different trading and investing environments, whether you’re focused on short-term pivots or long-term trend reversals. To maximize its effectiveness, fine-tune the sensitivity settings based on current market conditions and use the visual cues to confirm trend shifts.
Trend-trading
Moving Average Directional IndexMADX is ADX-inspired indicator with moving averages that determines strength of a trend, as well as its direction. Indicator works following:
As the value of MADX increases, so does the strength of a trend
If MADX+ ( green line - bullish MADX ) crosses above MADX- ( red line - bearish MADX ) we consider trend as bullish and vice versa..
There will be situations where MADX- and MADX+ cross multiple times in a short period of time -> that will mean that market indecision is happening and big move will most likely happen after it.
For the calculation of MADX+ and MADX- we need Moving Averages or Exponential Moving Averages with three specific sources ( high, close, low ).
Now, the calculation of each MADX will differ
=> for MADX+: Moving Average (high) / Moving Average (close)
=> for MADX-: Moving Average (close) / Moving Average (low)
Length of Moving Average is editable.
Ichimoku + RSI Crypto trending strategyThis is a crypto trending strategy designed for big timeframes such as 3-4h+.
Its components are:
RSI
ICHIMOKU full pack
Heikin Ashi candles for logic calculation inside
Rules for entry.
For long : we have a long cross condition on ichimoku and price is above the ichimoku lines, and at the same time RSI value is > 50.
For long : we have a short cross condition on ichimoku and price is below the ichimoku lines, and at the same time RSI value is < 50.
Rules for exit
We exit whenever we receive an opposite signal of the initial entry.
SInce this strategy is using no risk management inside, I recommend to be careful with it .
If you have any questions, let me know !
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The trading system is extremely simple and easy to use and removes emotions from trading.
The trading or investing logic is simple.... buy on close above 20 days high and sell on close below 20 days low.
No targets are given as profits are unknown and is whatever the market gives. Losses are limited via position sizing.