Overview
The Market Anomaly Detector (MAD) Indicator is designed to capture market reversals, trend shifts, and volatility cycles using a combination of its Mainline (blue), Upper Band (green), and Lower Band (red). This idea explores how the indicator performed in real market conditions, highlighting how price interactions with these bands provided trading signals.
How It Works
• Mainline (Blue Line - Dynamic Market Structure Guide)
• This acts as a key trend reference. When price trades above the Mainline, the structure is bullish; when below, it’s bearish.
• Acts as floating resistance in downtrends and support in uptrends.
• Upper Band (Green Line - Dynamic Resistance Zone)
• Expands and contracts based on volatility.
• Acts as a dynamic resistance—when price struggles at this level, it often signals an overextended move.
• Breakout Above Green Band → Possible bullish expansion, highlighted by Green Background.
• Rejection at Green Band → Signals potential price exhaustion and reversal.
• Lower Band (Red Line - Dynamic Support Zone)
• Functions as a strong support—if price holds, a reversal is likely.
• Break Below Red Band → Sell confirmation, as bearish momentum increases highlighted by Red Background.
Performance in This Case Study (Based on this chart)
1. Reversal Accuracy & Trend Reactions
• Multiple green buy signals were generated as the price bounced from the red lower band, confirming it as a strong support zone.
• When price broke below the red band, sell signals followed, aligning with the continuation of a bearish move.
• Sell signals near the green upper band played out well, confirming resistance rejection.
2. Trend Shrinking & Expansion Dynamics
• The bands contracted during sideways market phases, signaling low volatility and a lack of momentum.
• Expansion occurred before sharp price moves, giving early volatility warnings.
3. Resistance & Support Behavior
• The Blue Mainline rejected price during a downtrend, acting as dynamic resistance.
• Price failed to hold above the Green Upper Band, confirming trend weakness.
4. Strong Market Moves & Confirmation
• The break below the red band led to a clear downward trend, reinforcing the sell signal’s validity.
• The indicator effectively filtered false breakouts by ensuring a clean move beyond its bands before confirming signals.
Key Takeaways
✅ Lower Band (Red Line) = Strong Support → If price holds, reversals occur; if broken, sell-offs follow.
✅ Upper Band (Green Line) = Strong Resistance → Price rejection confirms weakness; breakout signals potential expansion.
✅ Mainline (Blue Line) = Dynamic Trend Guide → Price below = bearish, price above = bullish.
✅ Band Contraction = Low Volatility, Band Expansion = Impending Breakout.
✅ MAD Indicator accurately detected reversals and trend shifts in this case study.
The Market Anomaly Detector (MAD) Indicator is designed to capture market reversals, trend shifts, and volatility cycles using a combination of its Mainline (blue), Upper Band (green), and Lower Band (red). This idea explores how the indicator performed in real market conditions, highlighting how price interactions with these bands provided trading signals.
How It Works
• Mainline (Blue Line - Dynamic Market Structure Guide)
• This acts as a key trend reference. When price trades above the Mainline, the structure is bullish; when below, it’s bearish.
• Acts as floating resistance in downtrends and support in uptrends.
• Upper Band (Green Line - Dynamic Resistance Zone)
• Expands and contracts based on volatility.
• Acts as a dynamic resistance—when price struggles at this level, it often signals an overextended move.
• Breakout Above Green Band → Possible bullish expansion, highlighted by Green Background.
• Rejection at Green Band → Signals potential price exhaustion and reversal.
• Lower Band (Red Line - Dynamic Support Zone)
• Functions as a strong support—if price holds, a reversal is likely.
• Break Below Red Band → Sell confirmation, as bearish momentum increases highlighted by Red Background.
Performance in This Case Study (Based on this chart)
1. Reversal Accuracy & Trend Reactions
• Multiple green buy signals were generated as the price bounced from the red lower band, confirming it as a strong support zone.
• When price broke below the red band, sell signals followed, aligning with the continuation of a bearish move.
• Sell signals near the green upper band played out well, confirming resistance rejection.
2. Trend Shrinking & Expansion Dynamics
• The bands contracted during sideways market phases, signaling low volatility and a lack of momentum.
• Expansion occurred before sharp price moves, giving early volatility warnings.
3. Resistance & Support Behavior
• The Blue Mainline rejected price during a downtrend, acting as dynamic resistance.
• Price failed to hold above the Green Upper Band, confirming trend weakness.
4. Strong Market Moves & Confirmation
• The break below the red band led to a clear downward trend, reinforcing the sell signal’s validity.
• The indicator effectively filtered false breakouts by ensuring a clean move beyond its bands before confirming signals.
Key Takeaways
✅ Lower Band (Red Line) = Strong Support → If price holds, reversals occur; if broken, sell-offs follow.
✅ Upper Band (Green Line) = Strong Resistance → Price rejection confirms weakness; breakout signals potential expansion.
✅ Mainline (Blue Line) = Dynamic Trend Guide → Price below = bearish, price above = bullish.
✅ Band Contraction = Low Volatility, Band Expansion = Impending Breakout.
✅ MAD Indicator accurately detected reversals and trend shifts in this case study.
Thanks.
TradeTech Analysis
Telegram Channel - t.me/Tradetech2024
Youtube Channel - youtube.com/@TradeTechAnalysis
Website - tradetechanalysis.com/
TradeTech Analysis
Telegram Channel - t.me/Tradetech2024
Youtube Channel - youtube.com/@TradeTechAnalysis
Website - tradetechanalysis.com/
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Thanks.
TradeTech Analysis
Telegram Channel - t.me/Tradetech2024
Youtube Channel - youtube.com/@TradeTechAnalysis
Website - tradetechanalysis.com/
TradeTech Analysis
Telegram Channel - t.me/Tradetech2024
Youtube Channel - youtube.com/@TradeTechAnalysis
Website - tradetechanalysis.com/
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.