Overview
The Confusion Clarity Bar Index (CCBI) is a TradingView indicator designed to measure market efficiency and volatility by combining the Efficiency Ratio with a Bollinger Bands %b calculation. This provides traders with a unique way to gauge price movement clarity versus confusion.
Key Features:
1. Efficiency Ratio (ER) Calculation:
• Measures the directional efficiency of price movements over a user-defined period.
• Compares absolute momentum to cumulative volatility to determine efficiency.
2. Bollinger Bands %b Calculation:
• Applies a Bollinger Bands overlay to the Efficiency Ratio.
• Standard deviation is set very low (default 0.0001) to capture subtle variations in efficiency.
3. Histogram Visualization:
• A column-style histogram represents %b values:
• Blue bars when %b is above 0.5 (greater market clarity).
• Red bars when %b is below 0.5 (higher market confusion).
4. Overbought & Oversold Levels:
• 1.0 (Overbought) → Market is exceptionally efficient.
• 0.0 (Oversold) → Market is highly inefficient or erratic.
• 0.5 (Neutral Level) → Middle ground between efficiency and confusion.
5. Background Highlighting:
• Green background when %b reaches 1.0 (strong market efficiency).
• Red background when %b reaches 0.0 (extreme market inefficiency).
How to Use It:
• Trend Confirmation:
• If bars remain blue, price movements are likely clear and efficient.
• If bars turn red, market uncertainty is increasing.
• Reversal Zones:
• A move towards 0.0 suggests indecision, potentially signaling trend exhaustion.
• A move towards 1.0 indicates strong directional momentum.
• Volatility Breakouts:
• A sharp shift in %b from low to high may indicate an upcoming trend breakout.
This indicator is best used in conjunction with momentum oscillators and volume indicators to confirm market conditions and potential trade setups.
The Confusion Clarity Bar Index (CCBI) is a TradingView indicator designed to measure market efficiency and volatility by combining the Efficiency Ratio with a Bollinger Bands %b calculation. This provides traders with a unique way to gauge price movement clarity versus confusion.
Key Features:
1. Efficiency Ratio (ER) Calculation:
• Measures the directional efficiency of price movements over a user-defined period.
• Compares absolute momentum to cumulative volatility to determine efficiency.
2. Bollinger Bands %b Calculation:
• Applies a Bollinger Bands overlay to the Efficiency Ratio.
• Standard deviation is set very low (default 0.0001) to capture subtle variations in efficiency.
3. Histogram Visualization:
• A column-style histogram represents %b values:
• Blue bars when %b is above 0.5 (greater market clarity).
• Red bars when %b is below 0.5 (higher market confusion).
4. Overbought & Oversold Levels:
• 1.0 (Overbought) → Market is exceptionally efficient.
• 0.0 (Oversold) → Market is highly inefficient or erratic.
• 0.5 (Neutral Level) → Middle ground between efficiency and confusion.
5. Background Highlighting:
• Green background when %b reaches 1.0 (strong market efficiency).
• Red background when %b reaches 0.0 (extreme market inefficiency).
How to Use It:
• Trend Confirmation:
• If bars remain blue, price movements are likely clear and efficient.
• If bars turn red, market uncertainty is increasing.
• Reversal Zones:
• A move towards 0.0 suggests indecision, potentially signaling trend exhaustion.
• A move towards 1.0 indicates strong directional momentum.
• Volatility Breakouts:
• A sharp shift in %b from low to high may indicate an upcoming trend breakout.
This indicator is best used in conjunction with momentum oscillators and volume indicators to confirm market conditions and potential trade setups.
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.
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.