OPEN-SOURCE SCRIPT
Grid System
This script plots a a square composed of 8 equilateral triangles ("grid"). User can set the frequency of calculation/interval by adjusting the 't' parameter.
Steps for calculating grid:
1. Find the highest high and lowest low for last 't' periods.
2. Calculate midpoint for prices during that interval (highest high + lowest low) / 2.
3. Center of the grid = {time[t/2], price midpoint}.
Interpretation:
Volatility: If price is volatile for a given period, the area of the grid will expand, since the top and bottom sides are based on the highest high and lowest low for the period. So as range for a given period increases, the grid's area increases.
Support and resistance: The grid's center line often acts as the support / resistance line.
Trend Following: The example chart shows Cognex (CGNX) price using an interval of t=365. When the stock's trend was bullish, the area of the grids became increasingly larger and the y-coordinate of each grid was greater than that of the previous grid.
Steps for calculating grid:
1. Find the highest high and lowest low for last 't' periods.
2. Calculate midpoint for prices during that interval (highest high + lowest low) / 2.
3. Center of the grid = {time[t/2], price midpoint}.
Interpretation:
Volatility: If price is volatile for a given period, the area of the grid will expand, since the top and bottom sides are based on the highest high and lowest low for the period. So as range for a given period increases, the grid's area increases.
Support and resistance: The grid's center line often acts as the support / resistance line.
Trend Following: The example chart shows Cognex (CGNX) price using an interval of t=365. When the stock's trend was bullish, the area of the grids became increasingly larger and the y-coordinate of each grid was greater than that of the previous grid.
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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