CCI Threshold StrategyThe CCI Threshold Strategy is a trading approach that utilizes the Commodity Channel Index (CCI) as a momentum indicator to identify potential buy and sell signals in financial markets. The CCI is particularly effective in detecting overbought and oversold conditions, providing traders with insights into possible price reversals. This strategy is designed for use in various financial instruments, including stocks, commodities, and forex, and aims to capitalize on price movements driven by market sentiment.
Commodity Channel Index (CCI)
The CCI was developed by Donald Lambert in the 1980s and is primarily used to measure the deviation of a security's price from its average price over a specified period.
The formula for CCI is as follows:
CCI=(TypicalPrice−SMA)×0.015MeanDeviation
CCI=MeanDeviation(TypicalPrice−SMA)×0.015
where:
Typical Price = (High + Low + Close) / 3
SMA = Simple Moving Average of the Typical Price
Mean Deviation = Average of the absolute deviations from the SMA
The CCI oscillates around a zero line, with values above +100 indicating overbought conditions and values below -100 indicating oversold conditions (Lambert, 1980).
Strategy Logic
The CCI Threshold Strategy operates on the following principles:
Input Parameters:
Lookback Period: The number of periods used to calculate the CCI. A common choice is 9, as it balances responsiveness and noise.
Buy Threshold: Typically set at -90, indicating a potential oversold condition where a price reversal is likely.
Stop Loss and Take Profit: The strategy allows for risk management through customizable stop loss and take profit points.
Entry Conditions:
A long position is initiated when the CCI falls below the buy threshold of -90, indicating potential oversold levels. This condition suggests that the asset may be undervalued and due for a price increase.
Exit Conditions:
The long position is closed when the closing price exceeds the highest price of the previous day, indicating a bullish reversal. Additionally, if the stop loss or take profit thresholds are hit, the position will be exited accordingly.
Risk Management:
The strategy incorporates optional stop loss and take profit mechanisms, which can be toggled on or off based on trader preference. This allows for flexibility in risk management, aligning with individual risk tolerances and trading styles.
Benefits of the CCI Threshold Strategy
Flexibility: The CCI Threshold Strategy can be applied across different asset classes, making it versatile for various market conditions.
Objective Signals: The use of quantitative thresholds for entry and exit reduces emotional bias in trading decisions (Tversky & Kahneman, 1974).
Enhanced Risk Management: By allowing traders to set stop loss and take profit levels, the strategy aids in preserving capital and managing risk effectively.
Limitations
Market Noise: The CCI can produce false signals, especially in highly volatile markets, leading to potential losses (Bollinger, 2001).
Lagging Indicator: As a lagging indicator, the CCI may not always capture rapid market movements, resulting in missed opportunities (Pring, 2002).
Conclusion
The CCI Threshold Strategy offers a systematic approach to trading based on well-established momentum principles. By focusing on overbought and oversold conditions, traders can make informed decisions while managing risk effectively. As with any trading strategy, it is crucial to backtest the approach and adapt it to individual trading styles and market conditions.
References
Bollinger, J. (2001). Bollinger on Bollinger Bands. New York: McGraw-Hill.
Lambert, D. (1980). Commodity Channel Index. Technical Analysis of Stocks & Commodities, 2, 3-5.
Pring, M. J. (2002). Technical Analysis Explained. New York: McGraw-Hill.
Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124-1131.
Oscillators
RTI Thresholds Index | mad_tiger_slayerOverview of the Script
The Relative Trend Index (RTI) Threshold Index is a custom indicator for TradingView that enhances a Relative Trend Index (RTI) . The RTI is designed to reflect the market’s trend strength by comparing the current price to dynamically calculated upper and lower trend boundaries. Additionally, the indicator includes overbought and oversold thresholds, and Trend-coded signals to visually represent market conditions for easier analysis. The RTI Threshold Index is created and meant for long term investments targeted for longer swing trades over a few months to years.
How Do Investors Use the RTI Trend Index?
In the provided chart image, the indicator is displayed on a Bitcoin price chart. Here’s what each visual component represents:
INTENDED USES
The RTI Threshold Index is NOT intended for SCALPING.
With the nature of its components and calculations. This indicator will give false signals when the Timeframe is too low. The best intended use for high-quality signals are above the 12hr timeframes (Note: Coded to be used above 1 Day Timeframes)
The RTI Threshold Index is a TREND-FOLLOWING and MEAN REVERTING INDICATOR . With the explanation below of the image you can see both Trend-Following and Mean Reversion Uses.
A VISUAL REPRESENTATION INTENDED USES
Relative Trend Index Line (Green/Red): The main RTI line changes colors based on long or short conditions, providing an immediate visual cue of the trend direction. This conditional state enter long when the RTI is greater than the long threshold and will not enter short until it is less than the short threshold. (vice versa) When the RTI is less than the short threshold and will not enter long until it is greater than the long threshold.
EMA of RTI: A smoothed version of the RTI in yellow for more stable trend analysis. This EMA can be used for LONGER TERM trends. When the smoothed RTI is above 50, investors can assume that the trend will be in a trending state. Because this is slower than the RTI, you will get slower entries and slower exits.
Threshold Lines: Green and red lines for long and short thresholds, along with dashed lines for overbought and oversold levels. These lines can be calibrated to allow the RTI to enter a long trending or short trending state. The lower the value is for Long Threshold line , it will enter a long trend faster. The higher the value for Short Threshold Line , it will exit faster. We can also set Overbought and Oversold Thresholds. With the RTI entering above the Overbought Threshold line, Investors can assume that the environment is getting heated or is overbought. Same for oversold with the RTI entering below the Oversold Threshold line, Investors can assume that the environment is getting heated or is overbought.
Gradient Background: Shaded overbought and oversold areas improve readability by distinguishing these zones. This coloring of the shaded area tells us the oversold and overbought levels.
Colored Candles: Candles change color based on the RTI condition, aligning the price action visually with the trend status. The Green symbolizes a long state while red symbolizes a short state.
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The indicator's primary elements include:
Input Parameters: Configurable settings for trend length, sensitivity, moving average (MA) period, thresholds, and overbought/oversold levels.
RTI Calculation: Computation of trend boundaries and the RTI value based on the price's position within these boundaries.
Visual Components: Horizontal threshold lines, plotted RTI values, color-coded candles, and gradient fills for overbought and oversold zones.
1. Input Parameters
The script includes several configurable inputs, allowing users to customize the indicator’s sensitivity and behavior according to market conditions:
Trend Length: Controls the number of data points for trend calculations. Higher values produce a smoother, less responsive trend, while lower values make the trend more sensitive to recent price changes.
Trend Sensitivity: Sets the sensitivity by defining the upper and lower percentiles for the trend boundaries. Higher sensitivity values make the RTI less reactive, while lower values increase responsiveness.
MA length: Defines the period for the Exponential Moving Average (EMA) applied to the RTI, smoothing its output.
longThreshold and shortThreshold: Set the levels for entering long and short positions. The RTI crossing above longThreshold or below shortThreshold signals a long or short condition, respectively.
Overbought and oversold thresholds: When RTI exceeds overbought or falls below oversold, it indicates overbought or oversold market conditions.
2. Relative Trend Index (RTI) Calculation
The RTI is calculated by dynamically setting upper and lower trend boundaries:
Upper Trend and Lower Trend: Calculated by adding and subtracting the standard deviation of the closing price to/from the close, providing a measure of price variation.
upper array and Lower Arrays : Arrays that hold the upper and lower trend values over the specified trend length period.
Sorting and Indexing: After sorting these arrays, the values at specific percentiles (based on trend sensitivity) are selected as UpperTrend and LowerTrend.
RTI formula: The RTI is calculated by normalizing the close price within the range of UpperTrend and LowerTrend. This yields a percentage that reflects the price's relative position within the trend range.
3. Threshold and Signal Lines
Several horizontal lines mark key threshold levels:
midline: A dashed line at 50, marking the RTI midpoint.
overbought and oversold: Dashed lines for the overbought and oversold levels as set by overbought and oversold.
long hline and short hline: Solid lines marking the longThreshold and shortThreshold levels for entering long and short trades. They are colored Green for long threshold and Red for short threshold
4. Long and Short Conditions
The script defines long and short conditions based on the RTI’s position relative to the longThreshold and shortThreshold:
isLong: Set to true when the RTI exceeds longThreshold, signaling a long condition.
isShort: Set to true when the RTI drops below shortThreshold, signaling a short condition. overboughtcandles and oversoldcandles: Boolean variables that indicate when the RTI crosses the overbought or oversold thresholds, enhancing visual feedback.
5. Color Coding
Color-coded elements help to visually indicate the RTI's current state:
rtiColor: Sets the RTI line color based on the long or short condition (green for long, red for short).
obosColor: Colors specific candles in the overbought (yellow) and oversold (purple) regions, adding clarity to these conditions.
6. Plotting and Visualization
The following components display the RTI indicator and its conditions visually:
RTI and EMA Plot: The RTI line is plotted alongside an EMA line for smooth trend observation. The RTI line uses the conditional colors to indicate market conditions.
Background Gradient Fill: Shaded areas between the overbought and oversold levels highlight these zones in the background.
Colored Candles: Candles on the price chart are color-coded based on the RTI condition (green for long, red for short), making it easy to see trend direction changes.
Overbought and Oversold Gradient Fill: Gradient fills are applied to the overbought and oversold regions, creating a visual effect when the RTI reaches extreme levels.
Conclusion
The RTI Threshold Indicator is a powerful tool for assessing trend strength and market conditions. With configurable parameters, it adapts well to various timeframes and market environments, providing investors with a reliable means to identify potential entry and exit points. With configurable parameters, RTI Threshold Indicator can identify market conditions for potential buy and sell zones.
Dynamic RSI Mean Reversion StrategyDynamic RSI Mean Reversion Strategy
Overview:
This strategy uses an RSI with ATR-Adjusted OB/OS levels in order to enhance the quality of it's mean reversion trades. It also incorporates a form of trend filtering in an effort to minimize downside and maximize upside. The backtest has fewer trades, as it uses substantial filtering to enhance trade quality. As you can see, I didn't cherry pick the results, so the results aren't the most beautiful thing you'll see in your life. I did this to ensure nobody gets misled. If you need a higher frequency of trades, consider removing the trend filter or increasing the length of the EMAs used for trend detection.
Features:
Dynamic OB/OS Levels: Uses ATR to adjust overbought and oversold thresholds dynamically, making the RSI more responsive in varying volatility conditions. This approach enhances signal strength by expanding the RSI range in high volatility and tightening it in low volatility.
Mean Reversion Focus: Designed for mean reversion but incorporates a trend-following filter to reduce countertrend trades. When the RSI is high, it often indicates an uptrend, so a trend filter prevents shorting in these cases and the same goes for downtrends and longing.
Trend Filtering: A moving average cross trend filter checks for the trend direction, with the RSI signal line color-coded to reflect trend shifts. Entries occur when the RSI crosses above or below the dynamic thresholds and is not a countertrend trade.
Stop Losses: Stop losses are set based on ATR distance from the entry price, providing volatility-adjusted protection.
Note:
If you're using this strategy on assets with a higher price, remember to increase the initial capital in the strategy settings. Otherwise, the strategy won't generate any (or many) trades and you'll end up with some inaccurate results.
Recommended Use:
Test it on different assets and timeframes. I’ve found the best results with standard RSI inputs, a relatively slow ATR, and a slower MA cross for trend filtering. Thus, the defaults are set that way. If the trend metrics are too slow, you’ll filter out too many good trades while allowing crummy ones; if too fast, most trades may be filtered out. As always, this has a lot of configurability so experiment to find the balance that works for your trading style.
AutoCorrelation Test [OmegaTools]Overview
The AutoCorrelation Test indicator is designed to analyze the correlation patterns of a financial asset over a specified period. This tool can help traders identify potential predictive patterns by measuring the relationship between sequential returns, effectively assessing the autocorrelation of price movements.
Autocorrelation analysis is useful in identifying the consistency of directional trends (upward or downward) and potential cyclical behavior. This indicator provides an insight into whether recent price movements are likely to continue in a similar direction (positive correlation) or reverse (negative correlation).
Key Features
Multi-Period Autocorrelation: The indicator calculates autocorrelation across three periods, offering a granular view of price movement consistency over time.
Customizable Length & Sensitivity: Adjustable parameters allow users to tailor the length of analysis and sensitivity for detecting correlation.
Visual Aids: Three separate autocorrelation plots are displayed, along with an average correlation line. Dotted horizontal lines mark the thresholds for positive and negative correlation, helping users quickly assess potential trend continuation or reversal.
Interpretive Table: A table summarizing correlation status for each period helps traders make quick, informed decisions without needing to interpret the plot details directly.
Parameters
Source: Defines the price source (default: close) for calculating autocorrelation.
Length: Sets the analysis period, ranging from 10 to 2000 (default: 200).
Sensitivity: Adjusts the threshold sensitivity for defining correlation as positive or negative (default: 2.5).
Interpretation
Above 50 + Sensitivity: Indicates Positive Correlation. The price movements over the selected period are likely to continue in the same direction, potentially signaling a trend continuation.
Below 50 - Sensitivity: Indicates Negative Correlation. The price movements show a likelihood of reversing, which could signal an upcoming trend reversal.
Between 50 ± Sensitivity: Indicates No Correlation. Price movements are less predictable in direction, with no clear trend continuation or reversal tendency.
How It Works
The indicator calculates the logarithmic returns of the selected source price over each length period.
It then compares returns over consecutive periods, categorizing them as either "winning" (consistent direction) or "losing" (inconsistent direction) movements.
The result for each period is displayed as a percentage, with values above 50% indicating a higher degree of directional consistency (positive or negative).
A table updates with descriptive labels (Positive Correlation, Negative Correlation, No Correlation) for each tested period, providing a quick overview.
Visual Elements
Plots:
AutoCorrelation Test : Displays autocorrelation for the closest period (lag 1).
AutoCorrelation Test : Displays autocorrelation for the second period (lag 2).
AutoCorrelation Test : Displays autocorrelation for the third period (lag 3).
Average: Displays the simple moving average of the three test periods for a smoothed view of overall correlation trends.
Horizontal Lines:
No Correlation (50%): A baseline indicating neutral correlation.
Positive/Negative Correlation Thresholds: Dotted lines set at 50 ± Sensitivity, marking the thresholds for significant correlation.
Usage Guide
Adjust Parameters:
Select the Source to define which price metric (e.g., close, open) will be analyzed.
Set the Length based on your preferred analysis window (e.g., shorter for intraday trends, longer for swing trading).
Modify Sensitivity to fine-tune the thresholds based on market volatility and personal trading preference.
Interpret Table and Plots:
Use the table to quickly check the correlation status of each lag period.
Analyze the plots for changes in correlation. If multiple lags show positive correlation above the sensitivity threshold, a trend continuation may be expected. Conversely, negative values suggest a potential reversal.
Integrate with Other Indicators:
For enhanced insights, consider using the AutoCorrelation Test indicator in conjunction with other trend or momentum indicators.
This indicator offers a powerful method to assess market conditions, identify potential trend continuations or reversals, and better inform trading decisions. Its customization options provide flexibility for various trading styles and timeframes.
FMS Suite [KFB Quant]FMS Suite
Overview
The FMS Suite is a powerful and adaptive trend and momentum analysis tool that leverages multiple technical indicators to deliver a comprehensive signal for market direction. This suite combines the strengths of the Aroon, DMI, RSI, Supertrend, and Trix indicators, offering traders a well-rounded perspective on market trends.
How It Works
The FMS Suite integrates five essential components to assess market behavior:
Aroon Indicator : Detects trend strength and direction by analyzing the frequency of recent highs and lows over multiple timeframes. Directional Movement Index (DMI) : Measures the direction and strength of trends, with an ADX component for better trend assessment. Relative Strength Index (RSI) : Evaluates market momentum by indicating overbought or oversold conditions, with signals derived from the 50-line. Supertrend : Utilizes ATR-based volatility measures to establish dynamic support and resistance levels, signaling potential trend changes. Trix : A triple-smoothed EMA oscillator that highlights trend reversals using rate-of-change dynamics.
Each component is calculated across three separate timeframes (fast, medium, and slow), which are then averaged to produce a final FMS Signal . Users can also apply signal smoothing to reduce noise and enhance clarity.
Key Features
Customizable Parameters : Adjust the lengths for each component (fast, medium, slow) to optimize the indicator's responsiveness to different markets. Signal Smoothing Options : Select from various smoothing methods, including SMA, EMA, DEMA, and WMA, to fine-tune the FMS signal. Visual Representation : The FMS Suite plots a histogram representing the raw signal and a smoother line for clearer trend visualization. The background color shifts dynamically to indicate long, short, or neutral conditions. Threshold-Based Alerts : Set your own long and short thresholds, tailoring the indicator to your trading strategy and market outlook. Informative Table Display : An integrated table provides an at-a-glance summary of the current FMS and smoothed FMS signals, along with their respective scores and market state.
How to Use
Trend Confirmation : Utilize the FMS histogram and smoothed signal to validate or challenge existing trend assumptions. Trade Entries and Exits : Identify potential buy (long) or sell (short) signals based on the relationship between the FMS signal and predefined thresholds. Strategy Customization : Fine-tune the indicator settings to align with your trading style, whether it’s short-term scalping or long-term trend following.
Important Considerations
Not Predictive : The FMS Suite does not predict future price movements and should be used in conjunction with other analysis methods. It is based on historical price data, and past performance is not indicative of future results. Settings and Backtesting : Experiment with different lengths and smoothing techniques to optimize performance for specific instruments and market conditions. Always backtest thoroughly.
Disclaimer: This tool is provided for informational and educational purposes only and should not be considered as financial advice. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Williams %R - Multi TimeframeThis indicator implements the William %R multi-timeframe. On the 1H chart, the curves for 1H (with signal), 4H, and 1D are displayed. On the 4H chart, the curves for 4H (with signal) and 1D are shown. On all other timeframes, only the %R and signal are displayed. The indicator is useful to use on 1H and 4H charts to find confluence among the different curves and identify better entries based on their alignment across all timeframes. Signals above 80 often indicate a potential bearish reversal in price, while signals below 20 often suggest a bullish price reversal.
ChikouTradeIndicatorndicator Title: ChikouTradeIndicator
Short Title: CTI
Description:
The ChikouTradeIndicator (CTI) is designed to help traders identify potential trend reversals by analyzing short-term and long-term price ranges. It calculates the midpoint of the highest high and lowest low over two customizable lengths – the Turning Length (TL) and the Kumo Length (KL) – and determines market momentum by plotting the difference between these midpoints.
How It Works:
- Positive values (above the zero line) indicate bullish momentum, suggesting potential buying opportunities.
- Negative values (below the zero line) indicate bearish momentum, suggesting potential selling opportunities.
Features:
- Two customizable inputs:
- TL (Turning Length): Period used to calculate the short-term high/low midpoint.
- KL (Kumo Length): Period used to calculate the longer-term high/low midpoint.
Disclaimer:
This indicator is intended as a supportive tool to enhance trading analysis. It does not guarantee profitability and should be used with caution. Trading involves risk, and users should perform their own research before making any trading decisions. The developer is not responsible for any losses incurred through the use of this indicator.
ATR-Based Trend Oscillator with Donchian ChannelsThis script, my Magnum Opus, combines the best elements of trend detection into a powerful ATR-based trend strength oscillator. It has been meticulously engineered to give traders a consistent edge in trend analysis across any asset, including highly volatile markets like crypto and forex. The oscillator normalizes trend strength as a percentage of ATR, smoothing out noise and allowing the oscillator to remain highly responsive while adapting to varying asset volatility.
Key Features:
ATR-Based Oscillator: Measures trend strength in relation to Average True Range, which enhances accuracy and consistency across different assets. By normalizing to ATR, the oscillator produces stable and reliable values that capture shifts in trend momentum effectively.
Dual Moving Averages for Smoothing: This script features two customizable moving averages to help confirm trend direction and strength, making it adaptable for short- and long-term analysis alike.
Donchian Channels for Strength Bounds: A Donchian Channel over the smoothed trend strength oscillator visually bounds strength levels, enabling traders to spot breakout points or reversals quickly.
Ideal for Multi-Asset Trading: The versatility of this indicator makes it a perfect choice across various asset classes, from stocks to forex and cryptocurrencies, maintaining consistency in signals and reliability.
Suggested Pairing: Use this oscillator alongside a directional indicator, such as the Vortex Indicator, to confirm trend direction. This pairing allows traders to understand not only the strength but also the direction of the trend for optimized entry and exit points.
Why This Indicator Will Elevate Your Trading: This trend strength oscillator has been refined to provide clarity and edge for any trader. By incorporating ATR-based normalization, it maintains accuracy in volatile and steady markets alike. The Donchian Channels add structure to trend strength, giving clear overbought and oversold signals, while the two moving averages ensure that lag is minimized without sacrificing accuracy.
Whether you're scalping or trend-trading, this oscillator will enhance your ability to detect and interpret trend strength, making it an essential tool in any trading arsenal.
Stoch RSI and RSI Buy/Sell Signals with MACD Trend FilterDescription of the Indicator
This Pine Script is designed to provide traders with buy and sell signals based on the combination of Stochastic RSI, RSI, and MACD indicators, enhanced by the confirmation of candle colors. The primary goal is to facilitate informed trading decisions in various market conditions by utilizing different indicators and their interactions. The script allows customization of various parameters, providing flexibility for traders to adapt it to their specific trading styles.
Usefulness
This indicator is not just a mashup of existing indicators; it integrates the functionality of multiple momentum and trend-detection methods into a cohesive trading tool. The combination of Stochastic RSI, RSI, and MACD offers a well-rounded approach to analyzing market conditions, allowing traders to identify entry and exit points effectively. The inclusion of color-coded signals (strong vs. weak) further enhances its utility by providing visual cues about the strength of the signals.
How to Use This Indicator
Input Settings: Adjust the parameters for the Stochastic RSI, RSI, and MACD to fit your trading style. Set the overbought/oversold levels according to your risk tolerance.
Signal Colors:
Strong Buy Signal: Indicated by a green label and confirmed by a green candle (close > open).
Weak Buy Signal: Indicated by a blue label and confirmed by a green candle (close > open).
Strong Sell Signal: Indicated by a red label and confirmed by a red candle (close < open).
Weak Sell Signal: Indicated by an orange label and confirmed by a red candle (close < open).
Example Trading Strategy Using This Indicator
To effectively use this indicator as part of your trading strategy, follow these detailed steps:
Setup:
Timeframe : Select a timeframe that aligns with your trading style (e.g., 15-minute for intraday, 1-hour for swing trading, or daily for longer-term positions).
Indicator Settings : Customize the Stochastic RSI, RSI, and MACD parameters to suit your trading approach. Adjust overbought/oversold levels to match your risk tolerance.
Strategy:
1. Strong Buy Entry Criteria :
Wait for a strong buy signal (green label) when the RSI is at or below the oversold level (e.g., ≤ 35), indicating a deeply oversold market. Confirm that the MACD shows a decreasing trend (bearish momentum weakening) to validate a potential reversal. Ensure the current candle is green (close > open) if candle color confirmation is enabled.
Example Use : On a 1-hour chart, if the RSI drops below 35, MACD shows three consecutive bars of decreasing negative momentum, and a green candle forms, enter a buy position. This setup signals a robust entry with strong momentum backing it.
2. Weak Buy Entry Criteria :
Monitor for weak buy signals (blue label) when RSI is above the oversold level but still below the neutral (e.g., between 36 and 50). This indicates a market recovering from an oversold state but not fully reversing yet. These signals can be used for early entries with additional confirmations, such as support levels or higher timeframe trends.
Example Use : On the same 1-hour chart, if RSI is at 45, the MACD shows momentum stabilizing (not necessarily negative), and a green candle appears, consider a partial or cautious entry. Use this as an early warning for a potential bullish move, especially when higher timeframe indicators align.
3. Strong Sell Entry Criteria :
Look for a strong sell signal (red label) when RSI is at or above the overbought level (e.g., ≥ 65), signaling a strong overbought condition. The MACD should show three consecutive bars of increasing positive momentum to indicate that the bullish trend is weakening. Ensure the current candle is red (close < open) if candle color confirmation is enabled.
Example Use : If RSI reaches 70, MACD shows increasing momentum that starts to level off, and a red candle forms on a 1-hour chart, initiate a short position with a stop loss set above recent resistance. This is a high-confidence signal for potential price reversal or pullback.
4. Weak Sell Entry Criteria :
Use weak sell signals (orange label) when RSI is between the neutral and overbought levels (e.g., between 50 and 64). These can indicate potential short opportunities that might not yet be fully mature but are worth monitoring. Look for other confirmations like resistance levels or trendline touches to strengthen the signal.
Example Use : If RSI reads 60 on a 1-hour chart, and the MACD shows slight positive momentum with signs of slowing down, place a cautious sell position or scale out of existing long positions. This setup allows you to prepare for a possible downtrend.
Trade Management:
Stop Loss : For buy trades, place stop losses below recent swing lows. For sell trades, set stops above recent swing highs to manage risk effectively.
Take Profit : Target nearby resistance or support levels, apply risk-to-reward ratios (e.g., 1:2), or use trailing stops to lock in profits as price moves in your favor.
Confirmation : Align these signals with broader trends on higher timeframes. For example, if you receive a weak buy signal on a 15-minute chart, check the 1-hour or daily chart to ensure the overall trend is not bearish.
Real-World Example: Imagine trading on a 15-minute chart :
For a buy:
A strong buy signal (green) appears when the RSI dips to 32, MACD shows declining bearish momentum, and a green candle forms. Enter a buy position with a stop loss below the most recent support level.
Alternatively, a weak buy signal (blue) appears when RSI is at 47. Use this as a signal to start monitoring the market closely or enter a smaller position if other indicators (like support and volume analysis) align.
For a sell:
A strong sell signal (red) with RSI at 72 and a red candle signals to short with conviction. Place your stop loss just above the last peak.
A weak sell signal (orange) with RSI at 62 might prompt caution but can still be acted on if confirmed by declining volume or touching a resistance level.
These strategies show how to blend both strong and weak signals into your trading for more nuanced decision-making.
Technical Analysis of the Code
1. Stochastic RSI Calculation:
The script calculates the Stochastic RSI (stochRsiK) using the RSI as input and smooths it with a moving average (stochRsiD).
Code Explanation : ta.stoch(rsi, rsi, rsi, stochLength) computes the Stochastic RSI, and ta.sma(stochRsiK, stochSmoothing) applies smoothing.
2. RSI Calculation :
The RSI is computed over a user-defined period and checks for overbought or oversold conditions.
Code Explanation : rsi = ta.rsi(close, rsiLength) calculates RSI values.
3. MACD Trend Filter :
MACD is calculated with fast, slow, and signal lengths, identifying trends via three consecutive bars moving in the same direction.
Code Explanation : = ta.macd(close, macdLengthFast, macdLengthSlow, macdSignalLength) sets MACD values. Conditions like macdLine < macdLine confirm trends.
4. Buy and Sell Conditions :
The script checks Stochastic RSI, RSI, and MACD values to set buy/sell flags. Candle color filters further confirm valid entries.
Code Explanation : buyConditionMet and sellConditionMet logically check all conditions and toggles (enableStochCondition, enableRSICondition, etc.).
5. Signal Flags and Confirmation :
Flags track when conditions are met and ensure signals only appear on appropriate candle colors.
Code Explanation : Conditional blocks (if statements) update buyFlag and sellFlag.
6. Labels and Alerts :
The indicator plots "BUY" or "SELL" labels with the RSI value when signals trigger and sets alerts through alertcondition().
Code Explanation : label.new() displays the signal, color-coded for strength based on RSI.
NOTE : All strategies can be enabled or disabled in the settings, allowing traders to customize the indicator to their preferences and trading styles.
Dynamic Autocorrelation Visualizer (YavuzAkbay)The Dynamic Autocorrelation Visualizer (DAV) is a specialized indicator that analyzes and displays the autocorrelation of closing prices over multiple time lags. The autocorrelation function is a well-established economic calculation that measures how past price movements correlate with current prices at various intervals. This indicator implements this function to provide traders with insights into how these correlations evolve over time, enabling them to identify shifts in market behavior and trends.
Key Features and Functionality
1. Input Parameters:
Max Lag: This parameter determines the maximum number of lags for which the autocorrelation will be calculated. By default, it is set to 10, allowing traders to observe the correlation from the most recent price up to 10 periods back.
Calculation Period: The period over which the autocorrelation is calculated, set by default to 50. This setting allows users to adapt the analysis to different time frames depending on their trading strategies.
2. Autocorrelation Calculation:
The DAV calculates the average closing price over the specified period using the Simple Moving Average (SMA). This average serves as a reference point for measuring deviations in price behavior.
It then computes the denominator for the autocorrelation formula, which is the sum of the squared differences between each closing price and the average price. This normalization ensures that the autocorrelation values are meaningful and statistically valid.
For each specified lag (from 0 to max_lag - 1), the indicator calculates the numerator by summing the product of deviations from the mean for both the current and lagged prices. The autocorrelation value for each lag is then derived by dividing the numerator by the denominator, producing a set of autocorrelation values that reflect the strength and direction of price relationships over time.
3. Visualization:
The results for each lag's autocorrelation are plotted as individual lines on the chart, each differentiated by color to represent different lag periods.
A zero line is drawn as a reference, helping traders easily identify when autocorrelation values cross from positive to negative or vice versa.
The color gradient from the brightest blue (for lag 1) to darker shades indicates the relative strength of the autocorrelation for each lag, providing an immediate visual cue for analysis.
Indicator is Useful for
Seeing how correlation patterns evolve
Identifying periods where the market changes its behavior
Spotting when certain lag patterns become more or less significant
How to Use the DAV Indicator
Before using the indicator, it should be backtested on the chart and the mechanics should be learned. In general, if all lags of the indicator are above 0, it means that the trend is continuing. When the lags start to fall below 0 one by one, it means a trend reversal or instability. The indicator is in a sense a 90 degree freeze trace of the Autocorrelation indicator that I have also integrated into Tradingview (available in my profile), so it may be more understandable if used in conjunction with this indicator.
Trade 1 + StatergyThe Relative Strength Index (RSI) is a momentum oscillator used in technical analysis that measures the speed and change of price movements of a security within a range of 0 to 100. It is most commonly set to a 14-period timeframe and helps traders identify overbought or oversold conditions, suggesting potential reversal points in the market. Divergence occurs when the price trend and the RSI trend move in opposite directions. A bullish divergence signals potential upward movement when prices are making new lows while the RSI makes higher lows. Conversely, a bearish divergence suggests a possible downward trend when prices are making new highs but the RSI is making lower highs. These signals are crucial for traders looking to capture shifts in momentum and adjust their trading strategies accordingly.
use full to
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15 min decition
Hodrick-Prescott Cycle Component (YavuzAkbay)The Hodrick-Prescott Cycle Component indicator in Pine Script™ is an advanced tool that helps traders isolate and analyze the cyclical deviations in asset prices from their underlying trend. This script calculates the cycle component of the price series using the Hodrick-Prescott (HP) filter, allowing traders to observe and interpret the short-term price movements around the long-term trend. By providing two views—Percentage and Price Difference—this indicator gives flexibility in how these cyclical movements are visualized and interpreted.
What This Script Does
This indicator focuses exclusively on the cycle component of the price, which is the deviation of the current price from the long-term trend calculated by the HP filter. This deviation (or "cycle") is what traders analyze for mean-reversion opportunities and overbought/oversold conditions. The script allows users to see this deviation in two ways:
Percentage Difference: Shows the deviation as a percentage of the trend, giving a normalized view of the price’s distance from its trend component.
Price Difference: Shows the deviation in absolute price terms, reflecting how many price units the price is above or below the trend.
How It Works
Trend Component Calculation with the HP Filter: Using the HP filter, the script isolates the trend component of the price. The smoothness of this trend is controlled by the smoothness parameter (λ), which can be adjusted by the user. A higher λ value results in a smoother trend, while a lower λ value makes it more responsive to short-term changes.
Cycle Component Calculation: Percentage Deviation (cycle_pct) calculated as the difference between the current price and the trend, divided by the trend, and then multiplied by 100. This metric shows how far the price deviates from the trend in relative terms. Price Difference (cycle_price) simply the difference between the current price and the trend component, displaying the deviation in absolute price units.
Conditional Plotting: The user can choose to view the cycle component as either a percentage or a price difference by selecting the Display Mode input. The indicator will plot the chosen mode in a separate pane, helping traders focus on the preferred measure of deviation.
How to Use This Indicator
Identify Overbought/Oversold Conditions: When the cycle component deviates significantly from the zero line (shown with a dashed horizontal line), it may indicate overbought or oversold conditions. For instance, a high positive cycle component suggests the price may be overbought relative to the trend, while a large negative cycle suggests potential oversold conditions.
Mean-Reversion Strategy: In mean-reverting markets, traders can use this indicator to spot potential reversal points. For example, if the cycle component shows an extreme deviation from zero, it could signal that the price is likely to revert to the trend. This can help traders with entry and exit points when the asset is expected to correct back toward its trend.
Trend Strength and Cycle Analysis: By comparing the magnitude and duration of deviations, traders can gauge the strength of cycles and assess if a new trend might be forming. If the cycle component remains consistently positive or negative, it may indicate a persistent market bias, even as prices fluctuate around the trend.
Percentage vs. Price Difference Views: Use the Percentage Difference mode to standardize deviations and compare across assets or different timeframes. This is especially helpful when analyzing assets with varying price levels. Use the Price Difference mode when an absolute deviation (price units) is more intuitive for spotting overbought/oversold levels based on the asset’s actual price.
Using with Hodrick-Prescott: You can also use Hodrick-Prescott, another indicator that I have adapted to the Tradingview platform, to see the trend on the chart, and you can also use this indicator to see how far the price is deviating from the trend. This gives you a multifaceted perspective on your trades.
Practical Tips for Traders
Set the Smoothness Parameter (λ): Adjust the λ parameter to match your trading timeframe and asset characteristics. Lower values make the trend more sensitive, which might suit short-term trading, while higher values smooth out the trend for long-term analysis.
Cycle Component as Confirmation: Combine this indicator with other momentum or trend indicators for confirmation of overbought/oversold signals. For example, use the cycle component with RSI or MACD to validate the likelihood of mean-reversion.
Observe Divergences: Divergences between price movements and the cycle component can indicate potential reversals. If the price hits a new high, but the cycle component shows a smaller deviation than previous highs, it could signal a weakening trend.
DMI Delta by 0xjcfOverview
This indicator integrates the Directional Movement Index (DMI), Average Directional Index (ADX), and volume analysis into an Oscillator designed to help traders identify divergence-based trading signals. Unlike typical volume or momentum indicators, this combination provides insight into directional momentum and volume intensity, allowing traders to make well-informed decisions based on multiple facets of market behavior.
Purpose and How Components Work Together
By combining DMI and ADX with volume analysis, this indicator helps traders detect when momentum diverges from price action—a common precursor to potential reversals or significant moves. The ADX filter enhances this by distinguishing trending from range-bound conditions, while volume analysis highlights moments of extreme sentiment, such as solid buying or selling. Together, these elements provide traders with a comprehensive view of market strength, directional bias, and volume surges, which help filter out weaker signals.
Key Features
DMI Delta and Oscillator: The DMI indicator measures directional movement by comparing DI+ and DI- values. This difference (DMI Delta) is calculated and displayed as a histogram, visualizing changes in directional bias. When combined with ADX filtering, this histogram helps traders gauge the strength of momentum and spot directional shifts early. For instance, a rising histogram in a bearish price trend might signal a potential bullish reversal.
Volume Analysis with Extremes: Volume is monitored to reveal when market participation is unusually high, using a customizable multiplier to highlight significant volume spikes. These extreme levels are color-coded directly on the histogram, providing visual cues on whether buying or selling interest is particularly strong. Volume analysis adds depth to the directional insights from DMI, allowing traders to differentiate between regular and powerful moves.
ADX Trending Filter: The ADX component filters trends by measuring the overall strength of a price move, with a default threshold of 25. When ADX is above this level, it suggests that the market is trending strongly, making the DMI Delta readings more reliable. Below this threshold, the market is likely range-bound, cautioning traders that signals might not have as much follow-through.
Using the Indicator in Divergence Strategies
This indicator excels in divergence strategies by highlighting moments when price action diverges from directional momentum. Here’s how it aids in decision-making:
Bullish Divergence: If the price is falling to new lows while the DMI Delta histogram rises, it can indicate weakening bearish momentum and signal a potential price reversal to the upside.
Bearish Divergence: Conversely, if prices are climbing but the DMI Delta histogram falls, it may point to waning bullish momentum, suggesting a bearish reversal.
Visual Cues and Customization
The color-coded output enhances usability:
Bright Green/Red: Extreme volume with strong bullish or bearish signals, often at points of high potential for trend continuation or reversal.
Green/Red Shades: These shades reflect trending conditions (bullish or bearish) based on ADX, factoring in volume. Green signals a bullish trend, and red is a bearish trend.
Blue/Orange Shades: Indicates non-trending or weaker conditions, suggesting a more cautious approach in range-bound markets.
Customizable for Diverse Trading Styles
This indicator allows users to adjust settings like the ADX threshold and volume multiplier to optimize performance for various timeframes and strategies. Whether a trader prefers swing trading or intraday scalping, these parameters enable fine-tuning to enhance signal reliability across different market contexts.
Practical Usage Tips
Entry and Exit Signals: Use this indicator in conjunction with price action. Divergences between the price and DMI Delta histogram can reinforce entry or exit decisions.
Adjust Thresholds: Based on backtesting, customize the ADX Trending Threshold and Volume Multiplier to ensure optimal performance on different timeframes or trading styles.
In summary, this indicator is tailored for traders seeking a multi-dimensional approach to market analysis. It blends momentum, trend strength, and volume insights to support divergence-based strategies, helping traders confidently make informed decisions. Remember to validate signals through backtesting and use it alongside price action for the best results.
Fair Value Gap Oscillator | Flux Charts💎 GENERAL OVERVIEW
Introducing the new Fair Value Gap Oscillator (FVG Oscillator) indicator! This unique indicator identifies and tracks Fair Value Gaps (FVGs) in price action, presenting them in an oscillator format to reveal market momentum based on FVG strength. It highlights bullish and bearish FVGs while enabling traders to adjust detection sensitivity and apply volume and ATR-based filters for more precise setups. For more information about the process, check the "📌 HOW DOES IT WORK" section.
Features of the new FVG Oscillator:
Fully Customizable FVG Detection
An Oscillator Approach To FVGs
Divergence Markers For Potential Reversals
Alerts For Divergence Labels
Customizable Styling
📌 HOW DOES IT WORK?
Fair Value Gaps are price gaps within bars that indicate inefficiencies, often filled as the market retraces. The FVG Oscillator scans historical bars to identify these gaps, then filters them based on ATR or volume. Each FVG is marked as bullish or bearish according to the trend direction that preceded its formation.
An oscillator is calculated using recent FVGs with this formula :
1. The Oscillator starts as 0.
2. When a new FVG Appears, it contributes (FVG Width / ATR) to the oscillator of the corresponding type.
3. Each confirmed bar, the oscillator is recalculated as OSC = OSC * (1 - Decay Coefficient)
The oscillator aggregates and decays past FVGs, allowing recent FVG activity to dominate the signal. This approach emphasizes current market momentum, with oscillations moving bullish or bearish based on FVG intensity. Divergences are marked where FVG oscillations suggest potential reversals. Bullish Divergence conditions are as follows :
1. The current candlestick low must be the lowest of last 25 bars.
2. Net Oscillator (Shown in gray line by default) must be > 0.
3. The current Bullish FVG Oscillator value should be no more than 0.1 below the highest value from the last 25 bars.
Traders can use divergence signals to get an idea of potential reversals, and use the Net FVG Oscillator as a trend following marker.
🚩 UNIQUENESS
The Fair Value Gap Oscillator stands out by converting FVG activity into an oscillator format, providing a momentum-based visualization of FVGs that reveals market sentiment dynamically. Unlike traditional indicators that statically mark FVG zones, the oscillator decays older FVGs over time, showing only the most recent, relevant activity. This approach allows for real-time insight into market conditions and potential reversals based on oscillating FVG strength, making it both intuitive and powerful for momentum trading.
Another unique feature is the combination of customizable ATR and volume filters, letting traders adapt the indicator to match their strategy and market type. You can also set-up alerts for bullish & bearish divergences.
⚙️ SETTINGS
1. General Configuration
Decay Coefficient -> The decay coefficient for oscillators. Increasing this setting will result in oscillators giving the weight to recent FVGs, while decreasing it will distribute the weight equally to the past and recent FVGs.
2. Fair Value Gaps
Zone Invalidation -> Select between Wick & Close price for FVG Zone Invalidation.
Zone Filtering -> With "Average Range" selected, algorithm will find FVG zones in comparison with average range of last bars in the chart. With the "Volume Threshold" option, you may select a Volume Threshold % to spot FVGs with a larger total volume than average.
FVG Detection -> With the "Same Type" option, all 3 bars that formed the FVG should be the same type. (Bullish / Bearish). If the "All" option is selected, bar types may vary between Bullish / Bearish.
Detection Sensitivity -> You may select between Low, Normal or High FVG detection sensitivity. This will essentially determine the size of the spotted FVGs, with lower sensitivies resulting in spotting bigger FVGs, and higher sensitivies resulting in spotting all sizes of FVGs.
3. Style
Divergence Labels On -> You can switch divergence labels to show up on the chart or the oscillator plot.
Options Series - Technical Analysis Chart➤ Simple Technical Chart Only:
➤ With MA-20 Overlay and Volatility background bars:
➤ With RSI Candles:
⭐ Overview and How It Works:
This script provides a multi-asset analysis tool to assess various market conditions across four symbols simultaneously. It combines several indicators such as daily price change, Moving Averages (MA), Bollinger Bands (BB), Parabolic SAR, RSI, and VWAP to generate buy/sell signals and trend indicators. Its strength lies in the layered use of indicators to enhance signal reliability, making it valuable for traders needing cross-validation in decision-making.
⭐ Key Features and Functionality:
The script evaluates each symbol's price against various indicators and conditions:
Daily Price Conditions: It checks if each symbol’s close price is above or below the previous day’s open, close, and intra-day ranges, forming a foundational bullish/bearish condition.
Range Breakout 1st 5min Candle (ORB): Opening Range Breakout levels are calculated and compared with current close prices, detecting breakout/breakdown conditions.
ORB Body: This basically calculates the previous day Daily candle body size, if todays Daily candle body size is greater than previous day, then we can say that we are having good momentum else its likely to be in-sidebar trading.
Moving Averages (MA): It leverages EMA-20, 2-day, and 3-day exponential moving averages to gauge short to medium-term trends.
RSI and VWAP: Relative Strength Index (RSI) determines overbought or oversold conditions, while VWAP compares prices to volume-weighted levels.
Bollinger Bands and Trend Analysis: Detects volatility and potential breakout conditions.
Concept of ORB Body:
Current_PrevDay_Body = (math.max(var_Current_PrevD_Open, var_Current_PrevD_Close) - math.min(var_Current_PrevD_Open, var_Current_PrevD_Close))
Current_Upper_ORB = var_Current_D_Open + Current_PrevDay_Body
Current_Lower_ORB = var_Current_D_Open - Current_PrevDay_Body
Current_TodayDay_Body = math.max(var_Current_D_Open, var_Current_Close) - math.min(var_Current_D_Open, var_Current_Close)
Current_ORBBody = Current_TodayDay_Body > Current_PrevDay_Body
Current_Upper_ORB_bull = (var_Current_Close > Current_Upper_ORB)
Current_Lower_ORB_bear = (var_Current_Close < Current_Lower_ORB)
🎨 Visualizations and User Experience:
The script can dynamically display colored backgrounds indicating trends when conditions are met. For example, the bgcolor function changes the background when certain trend-based criteria are satisfied, offering visual cues to users. Additionally, the checkbox input toggles trend bar visualizations, enhancing user experience by providing a quick visual reference without needing to interpret individual data points manually.
RSI-Based Candle Coloring:
➤ The script customizes candle colors based on RSI thresholds, specifically defining upper (60) and lower (40) RSI levels. When the RSI value exceeds the upper threshold, candles are colored as bullish (green), and if it falls below the lower threshold, candles are colored as bearish (red). Neutral RSI values result in a default color (gray).
➤ This setup offers a visually intuitive way to identify potential trend directions based on RSI levels, making it ideal for traders looking to gauge momentum visually.
⭐ Settings and Customization:
With multiple user-configurable inputs, the script allows for tailored analysis. Customizable parameters, such as enabling/disabling trend bars and setting various look-back periods for indicators like Bollinger Bands and Moving Averages, make it adaptable to various trading styles and preferences. It also allows users to modify visual elements like colors and styles, improving flexibility.
⭐ Uniqueness of the Concept:
The unique aspect of this script is its multi-symbol approach combined with complex conditions. By comparing not only one but four symbols simultaneously, it provides a broader market view and allows traders to correlate signals across different assets, offering a potential edge for diversified or comparative strategies. Additionally, the incorporation of ORB and multi-timeframe MAs gives it a robustness often lacking in simpler single-symbol scripts.
🚀 Conclusion:
This script is a powerful multi-indicator tool suited for traders looking for a comparative, multi-symbol analysis. With features like ORB, Bollinger Band-based trend detection, and MA cross-verification, it can assist traders in identifying and validating trend signals across assets. The user-friendly visualizations and customizable settings further enhance its usability, making it versatile for various trading strategies and preferences.
Reversed Choppiness Index with Donchian Channels and SMAIn the chaotic world of trading, where every tick can lead to joy or despair, traders yearn for clarity amid the noise. They crave a mechanism that not only reveals the underlying market trends but also navigates the turbulent waters of volatility with grace. Enter the Reversed Choppiness Index with Donchian Channels and SMA Smoothing—a sophisticated tool crafted for those who refuse to be swayed by the whims of market noise.
This innovative script harnesses the power of the Choppiness Index, flipping it on its head to unveil the true direction of price movement. Choppiness, in its traditional form, indicates when the market is stuck in a sideways range, characterized by erratic price movements that can leave traders bewildered. High choppiness often signals confusion in the market, where prices oscillate without a clear trend, leading to potential losses. Conversely, low choppiness suggests a trending market, whether bullish or bearish, where trades can yield consistent profits. By reversing the Choppiness Index, this tool highlights lower choppiness levels as opportunities for selling when the market shows stability and momentum—perfect for traders looking to enter or exit positions with confidence.
The Donchian Channels serve as reliable markers, defining the boundaries of price action and helping to paint a clearer picture of market dynamics. Traders should look for breakouts from these channels, which may indicate a significant shift in momentum. When the Reversed Choppiness Index trends lower while price breaks above the upper Donchian Band, it may signal a strong buying opportunity, while a rise in choppiness alongside price dipping below the lower band can indicate a potential selling point.
But that's not all—this tool features a dual-layer of smoothing through two distinct Simple Moving Averages (SMAs). The first SMA gently caresses the Reversed Choppiness Index, softening its edges to reveal the underlying trends. The second SMA adds an extra layer of finesse, ensuring traders can spot significant changes with less noise interference.
In a landscape filled with fleeting opportunities and unpredictable swings, this script stands as a beacon of stability. It allows traders to focus on what truly matters—seizing profitable moments without getting caught in the crossfire of volatility. By understanding the dynamics of choppiness through this reversed lens, traders can more effectively navigate their strategies, capitalizing on clearer signals while avoiding the pitfalls of market noise. Embrace this tool and transform the way you trade; the market's whispers will no longer drown out your strategies, paving the way for informed decisions and greater success.
Z-Score RSI StrategyOverview
The Z-Score RSI Indicator is an experimental take on momentum analysis. By applying the Relative Strength Index (RSI) to a Z-score of price data, it measures how far prices deviate from their mean, scaled by standard deviation. This isn’t your traditional use of RSI, which is typically based on price data alone. Nevertheless, this unconventional approach can yield unique insights into market trends and potential reversals.
Theory and Interpretation
The RSI calculates the balance between average gains and losses over a set period, outputting values from 0 to 100. Typically, people look at the overbought or oversold levels to identify momentum extremes that might be likely to lead to a reversal. However, I’ve often found that RSI can be effective for trend-following when observing the crossover of its moving average with the midline or the crossover of the RSI with its own moving average. These crossovers can provide useful trend signals in various market conditions.
By combining RSI with a Z-score of price, this indicator estimates the relative strength of the price’s distance from its mean. Positive Z-score trends may signal a potential for higher-than-average prices in the near future (scaled by the standard deviation), while negative trends suggest the opposite. Essentially, when the Z-Score RSI indicates a trend, it reflects that the Z-score (the distance between the average and current price) is likely to continue moving in the trend’s direction. Generally, this signals a potential price movement, though it’s important to note that this could also occur if there’s a shift in the mean or standard deviation, rather than a meaningful change in price itself.
While the Z-Score RSI could be an insightful addition to a comprehensive trading system, it should be interpreted carefully. Mean shifts may validate the indicator’s predictions without necessarily indicating any notable price change, meaning it’s best used in tandem with other indicators or strategies.
Recommendations
Before putting this indicator to use, conduct thorough backtesting and avoid overfitting. The added parameters allow fine-tuning to fit various assets, but be careful not to optimize purely for the highest historical returns. Doing so may create an overly tailored strategy that performs well in backtests but fails in live markets. Keep it balanced and look for robust performance across multiple scenarios, as overfitting is likely to lead to disappointing real-world results.
XAUUSD 10-Minute StrategyThis XAUUSD 10-Minute Strategy is designed for trading Gold vs. USD on a 10-minute timeframe. By combining multiple technical indicators (MACD, RSI, Bollinger Bands, and ATR), the strategy effectively captures both trend-following and reversal opportunities, with adaptive risk management for varying market volatility. This approach balances high-probability entries with robust volatility management, making it suitable for traders seeking to optimise entries during significant price movements and reversals.
Key Components and Logic:
MACD (12, 26, 9):
Generates buy signals on MACD Line crossovers above the Signal Line and sell signals on crossovers below the Signal Line, helping to capture momentum shifts.
RSI (14):
Utilizes oversold (below 35) and overbought (above 65) levels as a secondary filter to validate entries and avoid overextended price zones.
Bollinger Bands (20, 2):
Uses upper and lower Bollinger Bands to identify potential overbought and oversold conditions, aiming to enter long trades near the lower band and short trades near the upper band.
ATR-Based Stop Loss and Take Profit:
Stop Loss and Take Profit levels are dynamically set as multiples of ATR (3x for stop loss, 5x for take profit), ensuring flexibility with market volatility to optimise exit points.
Entry & Exit Conditions:
Buy Entry: T riggered when any of the following conditions are met:
MACD Line crosses above the Signal Line
RSI is oversold
Price drops below the lower Bollinger Band
Sell Entry: Triggered when any of the following conditions are met:
MACD Line crosses below the Signal Line
RSI is overbought
Price moves above the upper Bollinger Band
Exit Strategy: Trades are closed based on opposing entry signals, with adaptive spread adjustments for realistic exit points.
Backtesting Configuration & Results:
Backtesting Period: July 21, 2024, to October 30, 2024
Symbol Info: XAUUSD, 10-minute timeframe, OANDA data source
Backtesting Capital: Initial capital of $700, with each trade set to 10 contracts (equivalent to approximately 0.1 lots based on the broker’s contract size for gold).
Users should confirm their broker's contract size for gold, as this may differ. This script uses 10 contracts for backtesting purposes, aligned with 0.1 lots on brokers offering a 100-contract specification.
Key Backtesting Performance Metrics:
Net Profit: $4,733.90 USD (676.27% increase)
Total Closed Trades: 526
Win Rate: 53.99%
Profit Factor: 1.44 (1.96 for Long trades, 1.14 for Short trades)
Max Drawdown: $819.75 USD (56.33% of equity)
Sharpe Ratio: 1.726
Average Trade: $9.00 USD (0.04% of equity per trade)
This backtest reflects realistic conditions, with a spread adjustment of 38 points and no slippage or commission applied. The settings aim to simulate typical retail trading conditions. However, please adjust the initial capital, contract size, and other settings based on your account specifics for best results.
Usage:
This strategy is tuned specifically for XAUUSD on a 10-minute timeframe, ideal for both trend-following and reversal trades. The ATR-based stop loss and take profit levels adapt dynamically to market volatility, optimising entries and exits in varied conditions. To backtest this script accurately, ensure your broker’s contract specifications for gold align with the parameters used in this strategy.
Mean Trend OscillatorMean Trend Oscillator
The Mean Trend Oscillator offers an original approach to trend analysis by integrating multiple technical indicators, using statistic to get a probable signal, and dynamically adapting to market volatility.
This tool aggregates signals from four popular indicators—Relative Strength Index (RSI), Simple Moving Average (SMA), Exponential Moving Average (EMA), and Relative Moving Average (RMA)—and adjusts thresholds using the Average True Range (ATR). By using this, we can use Statistics to aggregate or take the average of each indicators signal. Mathematically, Taking an average of these indicators gives us a better probability on entering a trending state.
By consolidating these distinct perspectives, the Mean Trend Oscillator provides a comprehensive view of market direction, helping traders make informed decisions based on a broad, data-driven trend assessment. Traders can use this indicator to enter long spot or leveraged positions. The Mean Trend Oscillator is intended to be use in long term trending markets. Scalping MUST NOT be used with this indicator. (This indicator will give false signals when the Timeframe is too low. The best intended use for high-quality signals are longer timeframes).
The current price of a beginning trend series may tell us something about the next move. Thus, the Mean Trend Oscillator allows us to spot a high probability trending market and potentially exploit this information enter long or shorts strategy. (again, this indicator will give false signals when the Timeframe is too low. The best intended use for high-quality signals are longer timeframes).
Concept and Calculation and Inputs
The Mean Trend Oscillator calculates a “net trend” score as follows:
RSI evaluates market momentum, identifying overbought and oversold conditions, essential for confirming trend direction.
SMA, EMA, and RMA introduce varied smoothing methods to capture short- to medium-term trends, balancing quick price changes with smoothed averages.
ATR-Enhanced Thresholds: ATR is used as a dynamic multiplier, adjusting each indicator’s thresholds to current volatility levels, which helps reduce noise in low-volatility conditions and emphasizes significant signals when volatility spikes.
Length could be used to adjust how quickly each indicator can more or how slower each indicator can be.
Time Coherency for Inputs: Each indicator must be calculated where each signal is relatively around the same area.
For example:
Simply:
SMA, RMA, EMA, and RSI enters long around each intended trend period. Doesn't have to be perfect, but the indicators all enter long around there.
Each indicator contributes a score (+1 for bullish and -1 for bearish), and these scores are averaged to generate the final trend score:
A positive score, shown as a green line, suggests bullish conditions.
A negative score, indicated by a red line, signifies bearish conditions.
Thus, giving us a signal to long or short.
How to Use the Mean Trend Oscillator
This indicator’s output is straightforward and can fit into various trading strategies:
Bullish Signal: A green line shows that the trend is bullish, based on a positive average score across the indicators, signaling a consideration of longing an asset.
Bearish Signal: A red line indicates bearish conditions, with an overall negative trend score, signaling a consideration to shorting an asset.
By aggregating these indicators, the Mean Trend Oscillator helps traders identify strong trends while filtering out minor fluctuations, making it a versatile tool for both short- and long-term analysis. This multi-layered, adaptive approach to trend detection sets it apart from traditional single-indicator trend tools.
Weekly RSI Buy/Sell SignalsWeekly RSI Buy/Sell Signal Indicator
This indicator is designed to help traders identify high-probability buy and sell opportunities on the weekly chart by using the Relative Strength Index (RSI). By utilizing weekly RSI values, this indicator ensures signals align with broader market trends, providing a clearer view of potential price reversals and continuation.
How It Works:
Weekly RSI Calculation: This script calculates the RSI using a 14-period setting, focusing on the weekly timeframe regardless of the user’s current chart view. The weekly RSI is derived using request.security, allowing for consistent signals even on intraday charts.
Signal Conditions:
Buy Signal: A buy signal appears when the RSI crosses above the oversold threshold of 30, suggesting that price may be gaining momentum after a potential bottom.
Sell Signal: A sell signal triggers when the RSI crosses below the overbought threshold of 70, indicating a possible momentum shift downwards.
Visual Cues:
Buy/Sell Markers: Clear green "BUY" and red "SELL" markers are displayed on the chart when buy or sell conditions are met, making it easy to identify entry and exit points.
RSI Line and Thresholds: The weekly RSI value is plotted in real time with color-coded horizontal lines at 30 (oversold) and 70 (overbought), providing a visual reference for key levels.
This indicator is ideal for traders looking for reliable, trend-based signals on higher timeframes and can be a helpful tool for filtering out shorter-term market noise.
DSL Strategy [DailyPanda]
Overview
The DSL Strategy by DailyPanda is a trading strategy that synergistically combines the idea from indicators to create a more robust and reliable trading tool. By integrating these indicators, the strategy enhances signal accuracy and provides traders with a comprehensive view of market trends and momentum shifts. This combination allows for better entry and exit points, improved risk management, and adaptability to various market conditions.
Combining ideas from indicators adds value by:
Enhancing Signal Confirmation : The strategy requires alignment between trend and momentum before generating trade signals, reducing false entries.
Improving Accuracy : By integrating price action with momentum analysis, the strategy captures more reliable trading opportunities.
Providing Comprehensive Market Insight : The combination offers a better perspective on the market, considering both the direction (trend) and the strength (momentum) of price movements.
How the Components Work Together
1. Trend Identification with DSL Indicator
Dynamic Signal Lines : Calculates upper and lower DSL lines based on a moving average (SMA) and dynamic thresholds derived from recent highs and lows with a specified offset. These lines adapt to market conditions, providing real-time trend insights.
ATR-Based Bands : Adds bands around the DSL lines using the Average True Range (ATR) multiplied by a width factor. These bands account for market volatility and help identify potential stop-loss levels.
Trend Confirmation : The relationship between the price, DSL lines, and bands determines the current trend. For example, if the price consistently stays above the upper DSL line, it indicates a bullish trend.
2. Momentum Analysis
RSI Calculation : Computes the RSI over a specified period to measure the speed and change of price movements.
Zero-Lag EMA (ZLEMA) : Applies a ZLEMA to the RSI to minimize lag and produce a more responsive oscillator.
DSL Application on Oscillator : Implements the DSL concept on the oscillator by calculating dynamic upper and lower levels. This helps identify overbought or oversold conditions more accurately.
Signal Generation : Detects crossovers between the oscillator and its DSL lines. A crossover above the lower DSL line signals potential bullish momentum, while a crossover below the upper DSL line signals potential bearish momentum.
3. Integrated Signal Filtering
Confluence Requirement : A trade signal is generated only when both the DSL indicator and oscillator agree. For instance, a long entry requires both an uptrend confirmation from the DSL indicator and a bullish momentum signal from the oscillator.
Risk Management Integration : The strategy uses the DSL indicator's bands for setting stop-loss levels and calculates take-profit levels based on a user-defined risk-reward ratio. This ensures that every trade has a predefined risk management plan.
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Originality and Value Added to the Community
Unique Synergy : While both indicators are available individually, this strategy is original in how it combines them to enhance their strengths and mitigate their weaknesses, offering a novel approach not present in existing scripts.
Enhanced Reliability : By requiring confirmation from both trend and momentum indicators, the strategy reduces false signals and increases the likelihood of successful trades.
Versatility : The customizable parameters allow traders to adapt the strategy to different instruments, timeframes, and trading styles, making it a valuable tool for a wide range of trading scenarios.
Educational Contribution : The script demonstrates an effective method of combining indicators for improved trading performance, providing insights that other traders can learn from and apply to their own strategies.
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How to Use the Strategy
Adding the Strategy to Your Chart
Apply the DSL Strategy to your desired trading instrument and timeframe on TradingView.
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Configuring Parameters
DSL Indicator Settings :
Length (len) : Adjusts the sensitivity of the DSL lines (default is 34).
Offset : Determines the look-back period for threshold calculations (default is 30).
Bands Width (width) : Changes the distance of the ATR-based bands from the DSL lines (default is 1).
DSL-BELUGA Oscillator Settings :
Beluga Length (len_beluga) : Sets the period for the RSI calculation in the oscillator (default is 10).
DSL Lines Mode (dsl_mode) : Chooses between "Fast" (more responsive) and "Slow" (smoother) modes for the oscillator's DSL lines.
Risk Management :
Risk Reward (risk_reward) : Defines your desired risk-reward ratio for calculating take-profit levels (default is 1.5).
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Interpreting Signals
Long Entry Conditions :
Trend Confirmation : Price is above the upper DSL line and the upper DSL band (dsl_up1 > dsl_dn).
Price Behavior : The last three candles have both their opens and closes above the upper DSL line.
Momentum Signal : The DSL-BELUGA oscillator crosses above its lower DSL line (up_signal), indicating bullish momentum.
Short Entry Conditions :
Trend Confirmation : Price is below the lower DSL line and the lower DSL band (dsl_dn < dsl_up1).
Price Behavior : The last three candles have both their opens and closes below the lower DSL band.
Momentum Signal : The DSL-BELUGA oscillator crosses below its upper DSL line (dn_signal), indicating bearish momentum.
Exit Conditions :
Stop-Loss : Automatically set at the DSL indicator's band level (upper band for longs, lower band for shorts).
Take-Profit : Calculated based on the risk-reward ratio and the initial risk determined by the stop-loss distance.
Visual Aids
Signal Arrows : Upward green arrows for long entries and downward blue arrows for short entries appear on the chart when conditions are met.
Stop-Loss and Take-Profit Lines : Red and green lines display the calculated stop-loss and take-profit levels for active trades.
Background Highlighting : The chart background subtly changes color to indicate when a signal has been generated.
Backtesting and Optimization
Use TradingView's strategy tester to backtest the strategy over historical data.
Adjust parameters to optimize performance for different instruments or market conditions.
Regularly review backtesting results to ensure the strategy remains effective.
Pullback Scalp Trade V2Pullback Scalp Trading Indicator
This indicator combines multiple technical analysis tools to identify potential pullback trading opportunities in trending markets. It uses a dual moving average system along with RSI for confirmation, providing a comprehensive approach to trend-following and momentum trading.
Key Features:
1. Trend Identification:
- Uses 50 and 200 period moving averages to define the overall trend
- Visual trend zone highlighting for clear market direction
- Customizable MA periods for different timeframes
2. Signal Generation System:
- Combines RSI crossovers with trend direction
- Buy signals occur when:
* Price is above 200 MA (uptrend)
* RSI crosses above its SMA
* RSI is below the lower threshold (default 50)
- Sell signals occur when:
* Price is below 200 MA (downtrend)
* RSI crosses below its SMA
* RSI is above the upper threshold (default 50)
3. Customizable Parameters:
- Short and Long MA periods
- MA types (SMA, EMA, VWMA)
- RSI length and RSI-SMA length
- RSI signal thresholds
- Trend MA periods
Usage Guidelines:
- Best used on higher timeframes (1H and above) for trend trading
- Wait for price to respect the trend zone before taking trades
- Use additional confirmation from price action or other indicators
- Adjust RSI levels based on market volatility
Limitations:
- Like all indicators, this tool may generate false signals in choppy markets
- Should not be used as a sole decision-making tool
- Past performance does not guarantee future results
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Türkçe Açıklama:
Bu indikatör, trendli piyasalarda potansiyel geri çekilme fırsatlarını belirlemek için birden fazla teknik analiz aracını birleştirir. Trend takibi ve momentum ticareti için kapsamlı bir yaklaşım sunan ikili hareketli ortalama sistemi ile RSI'yı bir arada kullanır.
Temel Özellikler:
1. Trend Belirleme:
- Genel trendi tanımlamak için 50 ve 200 periyotlu hareketli ortalamalar
- Görsel trend bölgesi vurgulaması
- Farklı zaman dilimleri için özelleştirilebilir MA periyotları
2. Sinyal Üretim Sistemi:
- RSI kesişimlerini trend yönü ile birleştirir
- Alış sinyalleri şu durumlarda oluşur:
* Fiyat 200 MA'nın üzerinde (yükseliş trendi)
* RSI, SMA'sını yukarı keser
* RSI alt eşiğin altında (varsayılan 50)
- Satış sinyalleri şu durumlarda oluşur:
* Fiyat 200 MA'nın altında (düşüş trendi)
* RSI, SMA'sını aşağı keser
* RSI üst eşiğin üzerinde (varsayılan 50)
3. Özelleştirilebilir Parametreler:
- Kısa ve Uzun MA periyotları
- MA tipleri (SMA, EMA, VWMA)
- RSI uzunluğu ve RSI-SMA uzunluğu
- RSI sinyal seviyeleri
- Trend MA periyotları
Kullanım Önerileri:
- Trend ticareti için yüksek zaman dilimlerinde (1S ve üzeri) kullanılması önerilir
- İşlem almadan önce fiyatın trend bölgesine saygı göstermesini bekleyin
- Fiyat hareketi veya diğer indikatörlerden ek teyit alın
- RSI seviyelerini piyasa volatilitesine göre ayarlayın
Sınırlamalar:
- Tüm indikatörler gibi, dalgalı piyasalarda yanlış sinyaller üretebilir
- Tek başına karar verme aracı olarak kullanılmamalıdır
- Geçmiş performans, gelecekteki sonuçların garantisi değildir
EMD Oscillator (Zeiierman)█ Overview
The Empirical Mode Decomposition (EMD) Oscillator is an advanced indicator designed to analyze market trends and cycles with high precision. It breaks down complex price data into simpler parts called Intrinsic Mode Functions (IMFs), allowing traders to see underlying patterns and trends that aren’t visible with traditional indicators. The result is a dynamic oscillator that provides insights into overbought and oversold conditions, as well as trend direction and strength. This indicator is suitable for all types of traders, from beginners to advanced, looking to gain deeper insights into market behavior.
█ How It Works
The core of this indicator is the Empirical Mode Decomposition (EMD) process, a method typically used in signal processing and advanced scientific fields. It works by breaking down price data into various “layers,” each representing different frequencies in the market’s movement. Imagine peeling layers off an onion: each layer (or IMF) reveals a different aspect of the price action.
⚪ Data Decomposition (Sifting): The indicator “sifts” through historical price data to detect natural oscillations within it. Each oscillation (or IMF) highlights a unique rhythm in price behavior, from rapid fluctuations to broader, slower trends.
⚪ Adaptive Signal Reconstruction: The EMD Oscillator allows traders to select specific IMFs for a custom signal reconstruction. This reconstructed signal provides a composite view of market behavior, showing both short-term cycles and long-term trends based on which IMFs are included.
⚪ Normalization: To make the oscillator easy to interpret, the reconstructed signal is scaled between -1 and 1. This normalization lets traders quickly spot overbought and oversold conditions, as well as trend direction, without worrying about the raw magnitude of price changes.
The indicator adapts to changing market conditions, making it effective for identifying real-time market cycles and potential turning points.
█ Key Calculations: The Math Behind the EMD Oscillator
The EMD Oscillator’s advanced nature lies in its high-level mathematical operations:
⚪ Intrinsic Mode Functions (IMFs)
IMFs are extracted from the data and act as the building blocks of this indicator. Each IMF is a unique oscillation within the price data, similar to how a band might be divided into treble, mid, and bass frequencies. In the EMD Oscillator:
Higher-Frequency IMFs: Represent short-term market “noise” and quick fluctuations.
Lower-Frequency IMFs: Capture broader market trends, showing more stable and long-term patterns.
⚪ Sifting Process: The Heart of EMD
The sifting process isolates each IMF by repeatedly separating and refining the data. Think of this as filtering water through finer and finer mesh sieves until only the clearest parts remain. Mathematically, it involves:
Extrema Detection: Finding all peaks and troughs (local maxima and minima) in the data.
Envelope Calculation: Smoothing these peaks and troughs into upper and lower envelopes using cubic spline interpolation (a method for creating smooth curves between data points).
Mean Removal: Calculating the average between these envelopes and subtracting it from the data to isolate one IMF. This process repeats until the IMF criteria are met, resulting in a clean oscillation without trend influences.
⚪ Spline Interpolation
The cubic spline interpolation is an advanced mathematical technique that allows smooth curves between points, which is essential for creating the upper and lower envelopes around each IMF. This interpolation solves a tridiagonal matrix (a specialized mathematical problem) to ensure that the envelopes align smoothly with the data’s natural oscillations.
To give a relatable example: imagine drawing a smooth line that passes through each peak and trough of a mountain range on a map. Spline interpolation ensures that line is as smooth and close to reality as possible. Achieving this in Pine Script is technically demanding and demonstrates a high level of mathematical coding.
⚪ Amplitude Normalization
To make the oscillator more readable, the final signal is scaled by its maximum amplitude. This amplitude normalization brings the oscillator into a range of -1 to 1, creating consistent signals regardless of price level or volatility.
█ Comparison with Other Signal Processing Methods
Unlike standard technical indicators that often rely on fixed parameters or pre-defined mathematical functions, the EMD adapts to the data itself, capturing natural cycles and irregularities in real-time. For example, if the market becomes more volatile, EMD adjusts automatically to reflect this without requiring parameter changes from the trader. In this way, it behaves more like a “smart” indicator, intuitively adapting to the market, unlike most traditional methods. EMD’s adaptive approach is akin to AI’s ability to learn from data, making it both resilient and robust in non-linear markets. This makes it a great alternative to methods that struggle in volatile environments, such as fixed-parameter oscillators or moving averages.
█ How to Use
Identify Market Cycles and Trends: Use the EMD Oscillator to spot market cycles that represent phases of buying or selling pressure. The smoothed version of the oscillator can help highlight broader trends, while the main oscillator reveals immediate cycles.
Spot Overbought and Oversold Levels: When the oscillator approaches +1 or -1, it may indicate that the market is overbought or oversold, signaling potential entry or exit points.
Confirm Divergences: If the price movement diverges from the oscillator's direction, it may indicate a potential reversal. For example, if prices make higher highs while the oscillator makes lower highs, it could be a sign of weakening trend strength.
█ Settings
Window Length (N): Defines the number of historical bars used for EMD analysis. A larger window captures more data but may slow down performance.
Number of IMFs (M): Sets how many IMFs to extract. Higher values allow for a more detailed decomposition, isolating smaller cycles within the data.
Amplitude Window (L): Controls the length of the window used for amplitude calculation, affecting the smoothness of the normalized oscillator.
Extraction Range (IMF Start and End): Allows you to select which IMFs to include in the reconstructed signal. Starting with lower IMFs captures faster cycles, while ending with higher IMFs includes slower, trend-based components.
Sifting Stopping Criterion (S-number): Sets how precisely each IMF should be refined. Higher values yield more accurate IMFs but take longer to compute.
Max Sifting Iterations (num_siftings): Limits the number of sifting iterations for each IMF extraction, balancing between performance and accuracy.
Source: The price data used for the analysis, such as close or open prices. This determines which price movements are decomposed by the indicator.
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Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
