OPEN-SOURCE SCRIPT
trend_switch
█ Description
Asset price data was time series data, commonly consisting of trends, seasonality, and noise. Many applicable indicators help traders to determine between trend or momentum to make a better trading decision based on their preferences. In some cases, there is little to no clear market direction, and price range. It feels much more appropriate to use a shorter trend identifier, until clearly defined market trend. The indicator/strategy developed with the notion aims to automatically switch between shorter and longer trend following indicator. There were many methods that can be applied and switched between, however in this indicator/strategy will be limited to the use of predictive moving average and MESA adaptive moving average (Ehlers), by first determining if there is a strong trend identified by calculating the slope, if slope value is between upper and lower threshold assumed there is not much price direction.
█ Formula
█ Feature
The indicator will have a specified default parameter of:
- source = ohlc4
- lookback period = 10
- threshold = 10
- fast limit = 0.5
- slow limit = 0.05
- Strategy type can be switched between Long/Short only and Long-Short strategy
- Strategy backtest period
█ How it works
- If slope between the upper (red) and lower (green) threshold line, assume there is little to no clear market direction, thus signal predictive moving average indicator
- If slope is above the upper (red) or below the lower (green) threshold line, assume there is a clear trend forming, the signal generated from the MESA adaptive moving average indicator
█ Example 1 - Slope fall between the Threshold - activate shorter trend
https://www.tradingview.com/x/bMZjRtMu/
█ Example 2 - Slope fall above/below Threshold - activate longer trend
https://www.tradingview.com/x/rUb7AJyI/
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
Disclaimer
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