ATR Adjusted RSIATR Adjusted RSI Indicator
By Nathan Farmer
The ATR Adjusted RSI Indicator is a versatile indicator designed primarily for trend-following strategies, while also offering configurations for overbought/oversold (OB/OS) signals, making it suitable for mean-reversion setups. This tool combines the classic Relative Strength Index (RSI) with a unique Average True Range (ATR)-based smoothing mechanism, allowing traders to adjust their RSI signals according to market volatility for more reliable entries and exits.
Key Features:
ATR Weighted RSI:
At the core of this indicator is the ATR-adjusted RSI line, where the RSI is smoothed based on volatility (measured by the ATR). When volatility increases, the smoothing effect intensifies, resulting in a more stable and reliable RSI reading. This makes the indicator more responsive to market conditions, which is especially useful in trend-following systems.
Multiple Signal Types:
This indicator offers a variety of signal-generation methods, adaptable to different market environments and trading preferences:
RSI MA Crossovers: Generates signals when the RSI crosses above or below its moving average, with the flexibility to choose between different moving average types (SMA, EMA, WMA, etc.).
Midline Crossovers: Provides trend confirmation when either the RSI or its moving average crosses the 50 midline, signaling potential trend reversals.
ATR-Inversely Weighted RSI Variations: Uses the smoothed, ATR-adjusted RSI for a more refined and responsive trend-following signal. There are variations both for the MA crossover and the midline crossover.
Overbought/Oversold Conditions: Ideal for mean reversion setups, where signals are triggered when the RSI or its moving average crosses over overbought or oversold levels.
Flexible Customization:
With a wide range of customizable options, you can tailor the indicator to fit your personal trading style. Choose from various moving average types for the RSI, modify the ATR smoothing length, and adjust overbought/oversold levels to optimize your signals.
Usage:
While this indicator is primarily designed for trend-following, its OB/OS configurations make it highly effective for mean-reverting setups as well. Depending on your selected signal type, the relevant indicator line will change color between green and red to visually signal long or short opportunities. This flexibility allows traders to switch between trending and sideways market strategies seamlessly.
A Versatile Tool:
The ATR Adjusted RSI Indicator is a valuable component of any trading system, offering enhanced signals that adapt to market volatility. However, it is not recommended to rely on this indicator alone, especially without thorough backtesting. Its performance varies across different assets and timeframes, so it’s essential to experiment with the parameters to ensure consistent results before applying it in live trading.
Recommendation:
Before incorporating this indicator into live trading, backtest it extensively. Given its flexibility and wide range of signal-generation methods, backtesting allows you to optimize the settings for your preferred assets and timeframes. Only consider using it on it's own if you are confident in its performance based on your own backtest results, and even then, it is not recommended.
Oversold
Larry Williams Valuation Index [tradeviZion]Larry Williams Valuation Index
Welcome to the Larry Williams Valuation Index by tradeviZion! This script is an interpretation of Larry Williams' famous WillVal (Valuation) Index, originally developed in 1990 to help traders determine whether a market or asset is overvalued or undervalued. We've extended it to support multiple securities and offer alerts for different valuation levels, helping you make more informed trading decisions.
What is the Valuation Index?
The Valuation Index measures how a security's current price compares to its historical price action. It helps identify whether the security is overvalued (priced too high), undervalued (priced too low), or in a normal range.
This version supports multiple securities and uses valuation parameters to help you assess the relative valuation of three securities simultaneously. It can help you determine the best times to enter (buy) or exit (sell) the market.
Key Features
Multi-Security Analysis: Analyze up to three securities simultaneously to get a broader view of market conditions.
Valuation Levels: Automatically calculate overvaluation and undervaluation levels or set manual levels for consistent analysis.
Custom Alerts: Create custom alerts when securities move between overvalued, undervalued, or normal ranges.
Customizable Table Display: Display a table with valuation values and their status on the chart.
Getting Started
Step 1: Adding the Script to Your Chart
First, add the Larry Williams Valuation Index script to your chart on TradingView. The script is designed to work with any timeframe, but for best results, use weekly or daily timeframes for a longer-term perspective.
Step 2: Configuring Securities
The script allows you to analyze up to three different securities :
Security 1 (Default: DXY)
Security 2 (Default: GC1!)
Security 3 (Default: ZB1!)
You can enable or disable each security individually.
Custom Timeframe Option: You have the option to select a custom timeframe for analysis. This allows you to see whether the security is overvalued or undervalued in lower or higher timeframes. Note that this feature is experimental and has not been extensively tested. Larry Williams originally used the weekly timeframe to determine if a stock was overvalued or undervalued. By default, the indicator compares the current price with the security based on the selected timeframe, except if you choose to use a custom timeframe.
Pro Tip : New users can start with the default securities to understand the concept before using other assets.
Step 3: Valuation Index Settings
Short EMA Length : This is the short-term average used for calculations. A lower value makes it more responsive to recent price changes.
Long EMA Length : This is the long-term average, used to smooth the valuation over time.
Valuation Length (Default: 156) : Represents approximately three years of daily bars (as recommended by Larry Williams).
How is the Valuation Index Calculated?
The valuation calculation is done using a method called WVI (WillVal Index), which compares the current price of a security to the price of another correlated security. Here’s a step-by-step explanation:
1. Data Collection: The script takes the closing price of the security you are analyzing and the closing price of the correlated security.
2. Ratio Calculation : The ratio of the two prices is calculated:
Price Ratio = (Price of your security) / (Price of correlated security) * 100.
This ratio helps determine how expensive or cheap your security is compared to the correlated one.
3. Exponential Moving Averages (EMAs) : The price ratio is used to calculate short-term and long-term EMAs (Exponential Moving Averages). EMAs are used to create smooth lines that represent the average price of a security over a specific period of time, with more weight given to recent data. By calculating both short-term and long-term EMAs, we can identify the trend direction and how the security is performing compared to its historical averages.
4. Valuation Index Calculation:
The Valuation Index is calculated as the difference between the short-term EMA and the long-term EMA. This difference helps to determine if the security is currently overvalued or undervalued:
A positive value indicates that the price is above its longer-term trend, suggesting potential overvaluation.
A negative value indicates that the price is below its longer-term trend, suggesting potential undervaluation.
5. Normalization:
To make the valuation easier to interpret, the calculated valuation index is then normalized using the highest and lowest values over the selected valuation length (e.g., 156 bars).
This normalization process converts the index into a percentage between 0 and 100, where higher values indicate overvaluation and lower values indicate undervaluation.
Step 4: Understanding Valuation Levels
The valuation levels indicate whether a security is currently undervalued, overvalued, or in a normal range.
Manual Levels : You can manually set the overvaluation and undervaluation thresholds (default is 85 for overvalued and 15 for undervalued).
Auto Levels : The script can automatically calculate these levels based on recent price action, allowing you to adapt to changing market conditions.
Auto Levels Calculation Explained:
The Auto Levels are calculated by taking the average of the valuation indices for all three securities (e.g., index1, index2, and index3).
The script then looks at the highest and lowest values of this average over a selected number of recent bars (e.g., 50 bars).
The overvaluation level is determined by taking the highest value and multiplying it by a multiplier (e.g., 5). Similarly, the undervaluation level is calculated using the lowest value and the multiplier.
These dynamic levels adjust according to recent price action, providing an adaptive approach to identifying overvalued and undervalued conditions.
Step 5: How to Use the Script to Make Trading Decisions
For new users, here's a step-by-step trading strategy you can use with the Valuation Index:
1. Identify Undervalued Opportunities
When two or more securities are in the undervalued range (below 15 for manual or below automatically calculated undervalue levels), wait for at least two of these securities to turn from undervalued to normal .
This transition indicates a potential buy opportunity .
2. Buying Signal
When at least two securities transition from undervalued to normal, you can consider buying the asset.
This indicates that the market may be recovering from undervalued conditions and could be moving into a growth phase.
3. Selling Signal
Exit when the price high closes below the EMA 21 (21-day exponential moving average).
Alternatively, if the valuation index reaches overvalued levels (above 85 manually or auto-calculated), wait for it to drop back to normal . This can be another point to exit the trade .
You can also use any other sell condition based on your r isk management strategy .
Alerts for Valuation Levels
The script includes alerts to notify you of changing market conditions:
To activate these alerts, follow these steps, referring to the provided screenshot with detailed steps:
1. Enable Alerts : Click on the settings gear icon on the script title in your chart. In the settings menu, scroll to the section labeled Alerts Settings .
Enable Alerts by checking the Enable Alerts box.
Set the Required Securities for Alert (default is 2 securities).
Choose the Alert Frequency : Selecting Once Per Bar Close will trigger alerts only at the close of each bar, ensuring you receive confirmed signals rather than potentially noisy intermediate signals.
2. Select Alert Type : Choose the type of alert you want to activate, such as Alert on Overvalued, Alert on Undervalued, Alert on Over to Normal , or Alert on Under to Normal .
3. Save Settings : Click OK to save your alert settings.
4. Add Alert on Indicator : Click the "..." (More button) next to the indicator name on the chart and select " Add alert on tradeviZion - WillVal ".
5. Create Alert : In the Create Alert window:
Set Condition to tradeviZion - WillVal .
Ensure Any alert() function call is selected.
Set the Alert Name and select your Expiration preferences.
6. Set Notification Preferences : Go to the Notifications tab and select how you want to receive notifications, such as via app notification, toast notification, email , or sound alert . Adjust these preferences to best suit your needs.
7. Click Create : Finally, click Create to activate the alert.
These alerts will help you stay informed about key market conditions and take action accordingly, ensuring you do not miss critical trading opportunities.
Understanding the Table Display
The script includes an interactive table on the chart to show the valuation status of each security:
Security : The name of the security being analyzed.
Value : The current valuation index value.
Status : Indicates whether the security is overvalued, undervalued , or in a normal range.
Color: Displays a color code for easy identification of status:
Red for overvalued.
Green for undervalued.
Other colors represent normal valuation levels.
Empowering Messages : Motivational messages are displayed to encourage disciplined trading. These messages will change periodically, helping keep a positive trading mindset.
Acknowledgment
This tool builds upon the foundational work of Larry Williams, who developed the WillVal (Valuation) Index concept. It also incorporates enhancements to extend multi-security analysis, valuation normalization, and advanced alerting features, providing a more versatile and powerful indicator. The Larry Williams Valuation Index [ tradeviZion ] helps traders make informed decisions by assessing overvalued and undervalued conditions for multiple securities simultaneously.
Note : Always practice proper risk management and thoroughly test the indicator to ensure it aligns with your trading strategy. Past performance is not indicative of future results.
Trade smarter with TradeVizion—unlock your trading potential today!
Leonid's Bitcoin Sharpe RatioThe Sharpe ratio is an old formula used to value the risk-adjusted return of an asset. It was developed by Nobel Laureate William F. Sharpe. In this case, I have applied it to Bitcoin with an adjustable look-back date.
The Sharpe Ratio shows you the average return earned after subtracting out the risk-free rate per unit of volatility (I've defaulted this to 0.02 ).
Volatility is a measure of the price fluctuations of an asset or portfolio. Subtracting the risk-free rate from the mean return allows you to understand what the extra returns are for taking the risk.
If the indicator is flashing red, Bitcoin is temporarily overbought (expensive).
If the indicator is flashing green, Bitcoin is temporarily oversold (cheap).
The goal of this indicator is to signal out local tops & bottoms. It can be adjusted as far as the lookback time but I have found 25-26 days to be ideal.
Adaptive RSI-Stoch with Butterworth Filter [UAlgo]The Adaptive RSI-Stoch with Butterworth Filter is a technical indicator designed to combine the strengths of the Relative Strength Index (RSI), Stochastic Oscillator, and a Butterworth Filter to provide a smooth and adaptive momentum-based trading signal. This custom-built indicator leverages the RSI to measure market momentum, applies Stochastic calculations for overbought/oversold conditions, and incorporates a Butterworth Filter to reduce noise and smooth out price movements for enhanced signal reliability.
By utilizing these combined methods, this indicator aims to help traders identify potential market reversal points, momentum shifts, and overbought/oversold conditions with greater precision, while minimizing false signals in volatile markets.
🔶 Key Features
Adaptive RSI and Stochastic Oscillator: Calculates RSI using a configurable period and applies a dual-smoothing mechanism with Stochastic Oscillator values (K and D lines).
Helps in identifying momentum strength and potential trend reversals.
Butterworth Filter: An advanced signal processing filter that reduces noise and smooths out the indicator values for better trend identification.
The filter can be enabled or disabled based on user preferences.
Customizable Parameters: Flexibility to adjust the length of RSI, the smoothing factors for Stochastic (K and D values), and the Butterworth Filter period.
🔶 Interpreting the Indicator
RSI & Stochastic Calculations:
The RSI is calculated based on the closing price over the user-defined period, and further smoothed to generate Stochastic Oscillator values.
The K and D values of the Stochastic Oscillator provide insights into short-term overbought or oversold conditions.
Butterworth Filter Application:
What is Butterworth Filter and How It Works?
The Butterworth Filter is a type of signal processing filter that is designed to have a maximally flat frequency response in the passband, meaning it doesn’t distort the frequency components of the signal within the desired range. It is widely used in digital signal processing and technical analysis to smooth noisy data while preserving the important trends in the underlying data. In this indicator, the Butterworth Filter is applied to the trigger value, making the resulting signal smoother and more stable by filtering out short-term fluctuations or noise in price data.
Key Concepts Behind the Butterworth Filter:
Filter Design: The Butterworth filter works by calculating weighted averages of current and past inputs (price or indicator values) and outputs to produce a smooth output. It is characterized by the absence of ripple in the passband and a smooth roll-off after the cutoff frequency.
Cutoff Frequency: The period specified in the indicator acts as a control for the cutoff frequency. A higher period means the filter will remove more high-frequency noise and retain longer-term trends, while a lower period means it will respond more to short-term fluctuations in the data.
Smoothing Process: In this script, the Butterworth Filter is calculated recursively using the following formula,
butterworth_filter(series float input, int period) =>
float wc = math.tan(math.pi / period)
float k1 = 1.414 * wc
float k2 = wc * wc
float a0 = k2 / (1 + k1 + k2)
float a1 = 2 * a0
float a2 = a0
float b1 = 2 * (k2 - 1) / (1 + k1 + k2)
float b2 = (1 - k1 + k2) / (1 + k1 + k2)
wc: This is the angular frequency, derived from the period input.
k1 and k2: These are intermediate coefficients used in the filter calculation.
a0, a1, a2: These are the feedforward coefficients, which determine how much of the current and past input values will contribute to the filtered output.
b1, b2: These are feedback coefficients, which determine how much of the past output values will contribute to the current output, effectively allowing the filter to "remember" past behavior and smooth the signal.
Recursive Calculation: The filter operates by taking into account not only the current input value but also the previous two input values and the previous two output values. This recursive nature helps it smooth the signal by blending the recent past data with the current data.
float filtered_value = a0 * input + a1 * prev_input1 + a2 * prev_input2
filtered_value -= b1 * prev_output1 + b2 * prev_output2
input: The current input value, which could be the trigger value in this case.
prev_input1, prev_input2: The previous two input values.
prev_output1, prev_output2: The previous two output values.
This means the current filtered value is determined by the combination of:
A weighted sum of the current input and the last two inputs.
A correction based on the last two output values to ensure smoothness and remove noise.
In conclusion when filter is enabled, the Butterworth Filter smooths the RSI and Stochastic values to reduce market noise and highlight significant momentum shifts.
The filtered trigger value (post-Butterworth) provides a cleaner representation of the market's momentum.
Cross Signals for Trade Entries:
Buy Signal: A bullish crossover of the K value above the D value, particularly when the values are below 40 and when the Stochastic trigger is below 1 and the filtered trigger is below 35.
Sell Signal: A bearish crossunder of the K value below the D value, particularly when the values are above 60 and when the Stochastic trigger is above 99 and the filtered trigger is above 90.
These signals are plotted visually on the chart for easy identification of potential trading opportunities.
Overbought and Oversold Zones:
The indicator highlights the overbought zone when the filtered trigger surpasses a specific threshold (typically above 100) and the oversold zone when it drops below 0.
The color-coded fill areas between the Stochastic and trigger lines help visualize when the market may be overbought (likely a reversal down) or oversold (potential reversal up).
🔶 Disclaimer
Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.
Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.
Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.
Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.
No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.
Composite Z-Score with Linear Regression Bands [UAlgo]The Composite Z-Score with Linear Regression Bands is a technical indicator designed to provide traders with a comprehensive analysis of price momentum, volatility, and volume. By combining multiple moving averages with slope analysis, volume/volatility compression-expansion metrics, and Z-Score calculations, this indicator aims to highlight potential breakout and breakdown points with high accuracy. The inclusion of linear regression bands further enhances the analysis by providing dynamic support and resistance levels, which adapt to market conditions. This makes the indicator particularly useful in identifying overbought/oversold conditions, volume squeezes, and the overall direction of the trend.
🔶 Key Features
Multi-Length Slope Calculation: The indicator uses multiple Hull Moving Averages (HMA) across various lengths to calculate slope angles, which are then converted into Z-Scores. This helps in capturing both short-term and long-term price momentum.
Volume/Volatility Composite Analysis: By calculating a composite value derived from both volume and volatility, the indicator identifies periods of compression (squeezes) and expansion, which are crucial for detecting potential breakout opportunities.
Linear Regression Bands: The inclusion of dynamic linear regression bands provides traders with adaptive support and resistance levels. These bands are enhanced by the composite value, which adjusts the band width based on market conditions, offering a clearer view of possible price reversals.
Overbought/Oversold Detection: The indicator highlights overbought and oversold conditions by comparing Z-Scores against the upper and lower bounds of the regression bands, which can signal potential reversal points.
Customizable Inputs: Users can customize key parameters such as the lengths of the moving averages, the regression band period, and the number of deviations used for the bands, allowing for flexibility in adapting the indicator to different market environments.
🔶 Interpreting the Indicator
Z-Score Plots: The individual Z-Score plots represent the normalized slope of the Hull Moving Averages over different periods. Positive values indicate upward momentum, while negative values suggest downward momentum. The combined Z-Sum provides a broader view of the overall market momentum.
Composite Value: The composite value is a ratio of volume to volatility, which highlights periods of market compression and expansion. When the composite value rises, it suggests increasing market activity, often preceding a breakout.
Why are we calculating values for multiple lengths?
The Composite Z-Score with Linear Regression Bands indicator employs a multi-timeframe analysis by calculating Z-scores for various moving average lengths. This approach provides a more comprehensive view of market dynamics and helps to identify trends and potential reversals across different timeframes. By considering multiple lengths, we can:
Capture a broader range of market behaviors: Different moving average lengths capture different aspects of price movement. Shorter lengths are more sensitive to recent price changes, while longer lengths provide a smoother representation of the underlying trend.
Reduce the impact of noise: By combining Z-scores from multiple lengths, we can help to filter out some of the noise that can be present in shorter-term data and obtain a more robust signal.
Enhance the reliability of signals: When Z-scores from multiple lengths align, it can increase the confidence in the identified trend or potential reversal. This can help to reduce the likelihood of false signals.
In essence, calculating values for multiple lengths allows the indicator to provide a more nuanced and reliable assessment of market conditions, making it a valuable tool for traders and analysts.
Linear Regression Bands: The central line represents the linear regression of the Z-Sum, while the upper and lower bands represent the dynamic resistance and support levels, respectively. The deviation from the regression line indicates the strength of the current trend. When price moves beyond these bands, it may signal an overbought (above upper band) or oversold (below lower band) condition.
Volume/Volatility Squeeze: When the price moves between the regression bands and the volume/volatility-adjusted bands, the market is in a squeeze. Breakouts from this squeeze can lead to significant price moves, which are indicated by the filling of areas between the Z-Score plots and the bands.
Color Interpretation: The indicator uses color changes to make it easier to interpret the data. Teal colors generally indicate upward momentum or strong conditions, while red suggests downward momentum or weakening conditions. The intensity of the color reflects the strength of the signal.
Overbought/Oversold Signals: The indicator marks potential overbought and oversold conditions when Z-Scores cross above or below the upper and lower regression bands, respectively. These signals are crucial for identifying potential reversal points in the market.
🔶 Disclaimer
Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.
Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.
Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.
Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.
No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.
RSI Slope Filtered Signals [UAlgo]The "RSI Slope Filtered Signals " is a technical analysis tool designed to enhance the accuracy of RSI (Relative Strength Index) signals by incorporating slope analysis. This indicator not only considers the RSI value but also analyzes the slope of the RSI over a specified number of bars, providing a more refined signal that accounts for the momentum and trend strength. By utilizing both positive and negative slope arrays, the indicator dynamically adjusts its thresholds, ensuring that signals are responsive to changing market conditions. This tool is particularly useful for traders looking to identify overbought and oversold conditions with a higher degree of precision, filtering out noise and providing clear visual cues for potential market reversals.
🔶 Key Features
Dynamic Slope Analysis: Measures the slope of RSI over a customizable number of bars, offering insights into the momentum and trend direction.
Adaptive Thresholds: Uses historical slope data to calculate dynamic thresholds, adjusting signal sensitivity based on market conditions.
Normalized Slope Calculation: Normalizes the slope values to provide a consistent measure across different market conditions, making the indicator more versatile.
Clear Signal Visualization: The indicator plots both positive and negative normalized slopes with color gradients, visually representing the strength of the trend.
Overbought and Oversold Signals: Plots overbought and oversold signals directly on the chart when the calculated value reaches the user-specified threshold, helping traders identify potential reversal points.
Customizable Settings: Allows users to adjust the RSI length, slope measurement bars, and lookback periods, providing flexibility to tailor the indicator to different trading strategies.
🔶 Interpreting the Indicator
The "RSI Slope Filtered Signals " indicator is designed to be easy to interpret. Here's how you can use it:
Normalized Slope: The indicator plots the normalized slope of the RSI, with values above zero indicating positive momentum and values below zero indicating negative momentum. A higher positive slope suggests a strong upward trend, while a deeper negative slope indicates a strong downward trend.
Reversal Signals: The indicator plots several horizontal lines at different thresholds (+3, +2, +1, 0, -1, -2, -3). These levels are used to gauge the strength of the momentum based on the normalized slope. For example, a normalized slope crossing above the +2 threshold may indicate a strong bullish trend, while crossing below the -2 threshold may suggest a strong bearish trend. These thresholds help in understanding the intensity of the current trend and provide context for interpreting the indicator's signals.
This indicator generates overbought and oversold signals not solely based on the RSI entering extreme levels (above 70 for overbought and below 30 for oversold), but also by considering the behavior of the normalized slope relative to specific thresholds. Specifically, the Overbought Signal (🔽) is triggered when the RSI is above 70 and the normalized slope from the previous bar is greater than or equal to the upper threshold, with the current slope being lower than the previous slope, indicating a potential bearish reversal as momentum may be slowing down.
Similarly, the Oversold Signal (🔼) is generated when the RSI is below 30 and the normalized slope from the previous bar is less than or equal to the lower threshold, with the current slope being higher than the previous slope, signaling a potential bullish reversal as the downward momentum may be weakening.
Area Plots: The indicator also plots the positive and negative slopes as filled areas, providing a quick visual cue for the strength and direction of the trend. Green areas represent positive slopes (upward momentum), while red areas represent negative slopes (downward momentum).
By combining these elements, the "RSI Slope Filtered Signals " provides a comprehensive view of the market's momentum, helping traders make more informed decisions by filtering out false signals and focusing on the significant trends.
🔶 Disclaimer
Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.
Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.
Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.
Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.
No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.
DSL Oscillator [BigBeluga]DSL Oscillator BigBeluga
The DSL (Discontinued Signal Lines) Oscillator is an advanced technical analysis tool that combines elements of the Relative Strength Index (RSI), Discontinued Signal Lines, and Zero-Lag Exponential Moving Average (ZLEMA). This versatile indicator is designed to help traders identify trend direction, momentum, and potential reversal points in the market.
What are Discontinued Signal Lines (DSL)?
Discontinued Signal Lines are an extension of the traditional signal line concept used in many indicators. While a standard signal line compares an indicator's value to its smoothed (slightly lagging) state, DSL takes this idea further by using multiple adaptive lines that respond to the indicator's current value. This approach provides a more nuanced view of the indicator's state and momentum, making it easier to determine trends and desired states of the indicator.
🔵 KEY FEATURES
● Discontinued Signal Lines (DSL)
Uses multiple adaptive lines that respond to the indicator's value
Provides a more nuanced view of the indicator's state and momentum
Helps determine trends and desired states of the indicator more effectively
Available in "Fast" and "Slow" modes for different responsiveness
Acts as dynamic support and resistance levels for the oscillator
● DSL Oscillator
Based on a combination of RSI and Discontinued Signal Lines
// Discontinued Signal Lines
dsl_lines(src, length)=>
UP = 0.
DN = 0.
UP := (src > ta.sma(src, length)) ? nz(UP ) + dsl_mode / length * (src - nz(UP )) : nz(UP )
DN := (src < ta.sma(src, length)) ? nz(DN ) + dsl_mode / length * (src - nz(DN )) : nz(DN )
Smoothed using Zero-Lag Exponential Moving Average for reduced lag
// Zero-Lag Exponential Moving Average function
zlema(src, length) =>
lag = math.floor((length - 1) / 2)
ema_data = 2 * src - src
ema2 = ta.ema(ema_data, length)
ema2
Oscillates between 0 and 100
Color-coded for easy interpretation of market conditions
● Signal Generation
Generates buy signals when the oscillator crosses above the lower DSL line below 50
Generates sell signals when the oscillator crosses below the upper DSL line above 50
Signals are visualized on both the oscillator and the main chart
● Visual Cues
Background color changes on signal occurrences for easy identification
Candles on the main chart are colored based on the latest signal
Oscillator line color changes based on its position relative to the DSL lines
🔵 HOW TO USE
● Trend Identification
Use the color and position of the DSL Oscillator relative to its Discontinued Signal Lines to determine the overall market trend
● Entry Signals
Look for buy signals (green circles) when the oscillator crosses above the lower DSL line
Look for sell signals (blue circles) when the oscillator crosses below the upper DSL line
Confirm signals with the triangles on the main chart and background color changes
● Exit Signals
Consider exiting long positions on exit signals and short positions on Entery signals
Watch for the oscillator crossing back between the DSL lines as a potential early exit signal
● Momentum Analysis
Strong momentum is indicated when the oscillator moves rapidly towards extremes and away from the DSL lines
Weakening momentum can be spotted when the oscillator struggles to reach new highs or lows, or starts converging with the DSL lines
The space between the DSL lines can indicate potential momentum strength - wider gaps suggest stronger trends
● Confirmation
Use the DSL lines as dynamic support/resistance levels for the oscillator
Look for convergence between oscillator signals and price action on the main chart
Combine signals with other technical indicators or chart patterns for stronger confirmation
🔵 CUSTOMIZATION
The DSL Oscillator offers several customization options:
Adjust the main calculation length for the DSL lines
Choose between "Fast" and "Slow" modes for the DSL lines calculation
By fine-tuning these settings, traders can adapt the DSL Oscillator to various market conditions and personal trading strategies.
The DSL Oscillator provides a multi-faceted approach to market analysis, combining trend identification, momentum assessment, and signal generation in one comprehensive tool. Its dynamic nature and visual cues make it suitable for both novice and experienced traders across various timeframes and markets. The integration of RSI, Discontinued Signal Lines, and ZLEMA offers traders a sophisticated yet intuitive tool to inform their trading decisions.
The use of Discontinued Signal Lines sets this oscillator apart from traditional indicators by providing a more adaptive and nuanced view of market conditions. This can potentially lead to more accurate trend identification and signal generation, especially in markets with varying volatility.
Traders can use the DSL Oscillator to identify trends, spot potential reversals, and gauge market momentum. The combination of the oscillator, dynamic signal lines, and clear visual signals provides a holistic view of market conditions. As with all technical indicators, it's recommended to use the DSL Oscillator in conjunction with other forms of analysis and within the context of a well-defined trading strategy.
Supply and Demand Zones with Enhanced SignalsThis Pine Script indicator combines supply and demand zone analysis with dynamic buy/sell signals to enhance trading strategies. It provides a robust framework for identifying optimal trading opportunities and managing existing trades.
Key Features:
Supply and Demand Zones: The indicator identifies significant supply and demand zones based on recent price action. These zones are plotted as horizontal lines to help traders visualize potential reversal points.
Exponential Moving Average (EMA): A 21-period EMA is used to determine the prevailing trend and generate buy and sell signals.
Relative Strength Index (RSI): The 14-period RSI is utilized to filter buy and sell signals, providing additional context on overbought and oversold conditions.
Signal Generation:
Buy Signal: Triggered when the price crosses above the EMA and RSI indicates that the market is not overbought.
Sell Signal: Triggered when the price crosses below the EMA and RSI indicates that the market is not oversold.
Enhanced Exit Signals:
Exit Buy Signal: Generated if an opposite sell signal occurs or the higher timeframe RSI indicates overbought conditions.
Exit Sell Signal: Generated if an opposite buy signal occurs or the higher timeframe RSI indicates oversold conditions.
Trade Management:
Tracks active trades and provides exit signals based on the occurrence of opposite trading signals. This helps in managing positions more effectively and reducing potential losses.
Usage:
Supply and Demand Zones: Look for price action around these zones to identify potential trading opportunities.
EMA and RSI: Use buy and sell signals in conjunction with EMA and RSI to validate trading decisions.
Higher Timeframe RSI: Utilize this for additional confirmation and exit signals.
Plotting:
Supply Zone: Plotted as a red horizontal line.
Demand Zone: Plotted as a green horizontal line.
EMA: Plotted as a blue line.
Buy and Sell Signals: Indicated by green and red triangle shapes, respectively.
Exit Signals: Indicated by blue and orange X shapes.
This indicator is designed to help traders make informed decisions by combining technical analysis with strategic trade management.
WaveTrend With Divs & RSI(STOCH) Divs by WeloTradesWaveTrend with Divergences & RSI(STOCH) Divergences by WeloTrades
Overview
The "WaveTrend With Divergences & RSI(STOCH) Divergences" is an advanced Pine Script™ indicator designed for TradingView, offering a multi-dimensional analysis of market conditions. This script integrates several technical indicators—WaveTrend, Money Flow Index (MFI), RSI, and Stochastic RSI—into a cohesive tool that identifies both regular and hidden divergences across these indicators. These divergences can indicate potential market reversals and provide critical trading opportunities.
This indicator is not just a simple combination of popular tools; it offers extensive customization options, organized data presentation, and valuable trading signals that are easy to interpret. Whether you're a day trader or a long-term investor, this script enhances your ability to make informed decisions.
Originality and Usefulness
The originality of this script lies in its integration and the synergy it creates among the indicators used. Rather than merely combining multiple indicators, this script allows them to work together, enhancing each other's strengths. For example, by identifying divergences across WaveTrend, RSI, and Stochastic RSI simultaneously, the script provides multiple layers of confirmation, which reduces the likelihood of false signals and increases the reliability of trading signals.
The usefulness of this script is apparent in its ability to offer a consolidated view of market dynamics. It not only simplifies the analytical process by combining different indicators but also provides deeper insights through its divergence detection features. This comprehensive approach is designed to help traders identify potential market reversals, confirm trends, and ultimately make more informed trading decisions.
How the Components Work Together
1. Cross-Validation of Signals
WaveTrend: This indicator is primarily used to identify overbought and oversold conditions, as well as potential buy and sell signals. WaveTrend's ability to smooth price data and reduce noise makes it a reliable tool for identifying trend reversals.
RSI & Stochastic RSI: These momentum oscillators are used to measure the speed and change of price movements. While RSI identifies general overbought and oversold conditions, Stochastic RSI offers a more granular view by tracking the RSI’s level relative to its high-low range over a period of time. When these indicators align with WaveTrend signals, it adds a layer of confirmation that enhances the reliability of the signals.
Money Flow Index (MFI): This volume-weighted indicator assesses the inflow and outflow of money in an asset, giving insights into buying and selling pressure. By analyzing the MFI alongside WaveTrend and RSI indicators, the script can cross-validate signals, ensuring that buy or sell signals are supported by actual market volume.
Example Bullish scenario:
When a bullish divergence is detected on the RSI and confirmed by a corresponding bullish signal on the WaveTrend, along with an increasing Money Flow Index, the probability of a successful trade setup increases. This cross-validation minimizes the risk of acting on false signals, which might occur when relying on a single indicator.
Example Bearish scenario:
When a bearish divergence is detected on the RSI and confirmed by a corresponding bearish signal on the WaveTrend, along with an decreasing Money Flow Index, the probability of a successful trade setup increases. This cross-validation minimizes the risk of acting on false signals, which might occur when relying on a single indicator.
2. Divergence Detection and Market Reversals
Regular Divergences: Occur when the price action and an indicator (like RSI or WaveTrend) move in opposite directions. Regular bullish divergence signals a potential upward reversal when the price makes a lower low while the indicator makes a higher low. Conversely, regular bearish divergence suggests a downward reversal when the price makes a higher high, but the indicator makes a lower high.
Hidden Divergences: These occur when the price action and indicator move in the same direction, but with different momentum. Hidden bullish divergence suggests the continuation of an uptrend, while hidden bearish divergence suggests the continuation of a downtrend. By detecting these divergences across multiple indicators, the script identifies potential trend reversals or continuations with greater accuracy.
Example: The script might detect a regular bullish divergence on the WaveTrend while simultaneously identifying a hidden bullish divergence on the RSI. This combination suggests that while a trend reversal is possible, the overall market sentiment remains bullish, providing a nuanced view of the market.
A Regular Bullish Divergence Example:
A Hidden Bullish Divergence Example:
A Regular Bearish Divergence Example:
A Hidden Bearish Divergence Example:
3. Trend Strength and Sentiment Analysis
WaveTrend: Measures the strength and direction of the trend. By identifying the extremes of market sentiment (overbought and oversold levels), WaveTrend provides early signals for potential reversals.
Money Flow Index (MFI): Assesses the underlying sentiment by analyzing the flow of money. A rising MFI during an uptrend confirms strong buying pressure, while a falling MFI during a downtrend confirms selling pressure. This helps traders assess whether a trend is likely to continue or reverse.
RSI & Stochastic RSI: Offer a momentum-based perspective on the trend’s strength. High RSI or Stochastic RSI values indicate that the asset may be overbought, suggesting a potential reversal. Conversely, low values indicate oversold conditions, signaling a possible upward reversal.
Example:
During a strong uptrend, the WaveTrend & RSI's might signal overbought conditions, suggesting caution. If the MFI also shows decreasing buying pressure and the RSI reaches extreme levels, these indicators together suggest that the trend might be weakening, and a reversal could be imminent.
Example:
During a strong downtrend, the WaveTrend & RSI's might signal oversold conditions, suggesting caution. If the MFI also shows increasing buying pressure and the RSI reaches extreme levels, these indicators together suggest that the trend might be weakening, and a reversal could be imminent.
Conclusion
The "WaveTrend With Divergences & RSI(STOCH) Divergences" script offers a powerful, integrated approach to technical analysis by combining trend, momentum, and sentiment indicators into a single tool. Its unique value lies in the cross-validation of signals, the ability to detect divergences, and the comprehensive view it provides of market conditions. By offering traders multiple layers of analysis and customization options, this script is designed to enhance trading decisions, reduce false signals, and provide clearer insights into market dynamics.
WAVETREND
Display of WaveTrend:
Display of WaveTrend Setting:
WaveTrend Indicator Explanation
The WaveTrend indicator helps identify overbought and oversold conditions, as well as potential buy and sell signals. Its flexibility allows traders to adapt it to various strategies, making it a versatile tool in technical analysis.
WaveTrend Input Settings:
WT MA Source: Default: HLC3
What it is: The data source used for calculating the WaveTrend Moving Average.
What it does: Determines the input data to smooth price action and filter noise.
Example: Using HLC3 (average of High, Low, Close) provides a smoother data representation compared to using just the closing price.
Length (WT MA Length): Default: 3
What it is: The period used to calculate the Moving Average.
What it does: Adjusts the sensitivity of the WaveTrend indicator, where shorter lengths respond more quickly to price changes.
Example: A length of 3 is ideal for short-term analysis, providing quick reactions to price movements.
WT Channel Length & Average: Default: WT Channel Length = 9, Average = 12
What it is: Lengths used to calculate the WaveTrend channel and its average.
What it does: Smooths out the WaveTrend further, reducing false signals by averaging over a set period.
Example: Higher values reduce noise and help in identifying more reliable trends.
Channel: Style, Width, and Color:
What it is: Customization options for the WaveTrend channel's appearance.
What it does: Adjusts how the channel is displayed, including line style, width, and color.
Example: Choosing an area style with a distinct color can make the WaveTrend indicator clearly visible on the chart.
WT Buy & Sell Signals:
What it is: Settings to enable and customize buy and sell signals based on WaveTrend.
What it does: Allows for the display of buy/sell signals and customization of their shapes and colors.
When it gives a Buy Signal: Generated when the WaveTrend line crosses below an oversold level and then rises back, indicating a potential upward price movement.
When it gives a Sell Signal: Triggered when the WaveTrend line crosses above an overbought level and then declines, suggesting a possible downward trend.
Example: The script identifies these signals based on mean reversion principles, where prices tend to revert to the mean after reaching extremes. Traders can use these signals to time their entries and exits effectively.
WAVETREND OVERBOUGTH AND OVERSOLD LEVELS
Display of WaveTrend with Overbought & Oversold Levels:
Display of WaveTrend Overbought & Oversold Levels Settings:
WaveTrend Overbought & Oversold Levels Explanation
WT OB & OS Levels: Default: OB Level 1 = 53, OB Level 2 = 60, OS Level 1 = -53, OS Level 2 = -60
What it is: The default overbought and oversold levels used by the WaveTrend indicator to signal potential market reversals.
What it does: When the WaveTrend crosses above the OB levels, it indicates an overbought condition, potentially signaling a reversal or selling opportunity. Conversely, when it crosses below the OS levels, it indicates an oversold condition, potentially signaling a reversal or buying opportunity.
Example: A trader might use these levels to time entry or exit points, such as selling when the WaveTrend crosses into the overbought zone or buying when it crosses into the oversold zone.
Show OB/OS Levels: Default: True
What it is: Toggle options to show or hide the overbought and oversold levels on your chart.
What it does: When enabled, these levels will be visually represented on your chart, helping you to easily identify when the market reaches these critical thresholds.
Example: Displaying these levels can help you quickly see when the WaveTrend is approaching or has crossed into overbought or oversold territory, allowing for more informed trading decisions.
Line Style, Width, and Color for OB/OS Levels:
What it is: Options to customize the appearance of the OB and OS levels on your chart, including line style (solid, dotted, dashed), line width, and color.
What it does: These settings allow you to adjust how prominently these levels are displayed on your chart, which can help you better visualize and respond to overbought or oversold conditions.
Example: Setting a thicker, dashed line in a contrasting color can make these levels stand out more clearly, aiding in quick visual identification.
Example of Use:
Scenario: A trader wants to identify potential selling points when the market is overbought. They set the OB levels at 53 and 60, choosing a solid, red line style to make these levels clear on their chart. As the WaveTrend crosses above 53, they monitor for further price action, and upon crossing 60, they consider initiating a sell order.
WAVETREND DIVERGENCES
Display of WaveTrend Divergence:
Display of WaveTrend Divergence Setting:
WaveTrend Divergence Indicator Explanation
The WaveTrend Divergence feature helps identify potential reversal points in the market by highlighting divergences between the price and the WaveTrend indicator. Divergences can signal a shift in market momentum, indicating a possible trend reversal. This component allows traders to visualize and customize divergence detection on their charts.
WaveTrend Divergence Input Settings:
Potential Reversal Range: Default: 28
What it is: The number of bars to look back when detecting potential tops and bottoms.
What it does: Sets the range for identifying possible reversal points based on historical data.
Example: A setting of 28 looks back across the last 28 bars to find reversal points, offering a balance between responsiveness and reliability.
Reversal Minimum LVL OB & OS: Default: OB = 35, OS = -35
What it is: The minimum overbought and oversold levels required for detecting potential reversals.
What it does: Adjusts the thresholds that trigger a reversal signal based on the WaveTrend indicator.
Example: A higher OB level reduces the sensitivity to overbought conditions, potentially filtering out false reversal signals.
Lookback Bar Left & Right: Default: Left = 10, Right = 1
What it is: The number of bars to the left and right used to confirm a top or bottom.
What it does: Helps determine the position of peaks and troughs in the price action.
Example: A larger left lookback captures more extended price action before the peak, while a smaller right lookback focuses on the immediate past.
Lookback Range Min & Max: Default: Min = 5, Max = 60
What it is: The minimum and maximum range for the lookback period when identifying divergences.
What it does: Fine-tunes the detection of divergences by controlling the range over which the indicator looks back.
Example: A wider range increases the chances of detecting divergences across different market conditions.
R.Div Minimum LVL OB & OS: Default: OB = 53, OS = -53
What it is: The threshold levels for detecting regular divergences.
What it does: Adjusts the sensitivity of the regular divergence detection.
Example: Higher thresholds make the detection more conservative, identifying only stronger divergence signals.
H.Div Minimum LVL OB & OS: Default: OB = 20, OS = -20
What it is: The threshold levels for detecting hidden divergences.
What it does: Similar to regular divergence settings but for hidden divergences, which can indicate potential reversals that are less obvious.
Example: Lower thresholds make the hidden divergence detection more sensitive, capturing subtler market shifts.
Divergence Label Options:
What it is: Options to display and customize labels for regular and hidden divergences.
What it does: Allows users to visually differentiate between regular and hidden divergences using customizable labels and colors.
Example: Using different colors and symbols for regular (R) and hidden (H) divergences makes it easier to interpret signals on the chart.
Text Size and Color:
What it is: Customization options for the size and color of divergence labels.
What it does: Adjusts the readability and visibility of divergence labels on the chart.
Example: Larger text size may be preferred for charts with a lot of data, ensuring divergence labels stand out clearly.
FAST & SLOW MONEY FLOW INDEX
Display of Fast & Slow Money Flow:
Display of Fast & Slow Money Flow Setting:
Fast Money Flow Indicator Explanation
The Fast Money Flow indicator helps traders identify the flow of money into and out of an asset over a shorter time frame. By tracking the volume-weighted average of price movements, it provides insights into buying and selling pressure in the market, which can be crucial for making timely trading decisions.
Fast Money Flow Input Settings:
Fast Money Flow: Length: Default: 9
What it is: The period used for calculating the Fast Money Flow.
What it does: Determines the sensitivity of the Money Flow calculation. A shorter length makes the indicator more responsive to recent price changes, while a longer length provides a smoother signal.
Example: A length of 9 is suitable for traders looking to capture quick shifts in market sentiment over a short period.
Fast MFI Area Multiplier: Default: 5
What it is: A multiplier applied to the Money Flow area calculation.
What it does: Adjusts the size of the Money Flow area on the chart, effectively amplifying or reducing the visual impact of the indicator.
Example: A higher multiplier can make the Money Flow more prominent on the chart, aiding in the quick identification of significant money flow changes.
Y Position (Y Pos): Default: 0
What it is: The vertical position adjustment for the Fast Money Flow plot on the chart.
What it does: Allows you to move the Money Flow plot up or down on the chart to avoid overlap with other indicators.
Example: Adjusting the Y Position can be useful if you have multiple indicators on the chart and need to maintain clarity.
Fast MFI Style, Width, and Color:
What it is: Customization options for how the Fast Money Flow is displayed on the chart.
What it does: Enables you to choose between different plot styles (line or area), set the line width, and select colors for positive and negative money flow.
Example: Using different colors for positive (green) and negative (red) money flow helps to visually distinguish between periods of buying and selling pressure.
Slow Money Flow Indicator Explanation
The Slow Money Flow indicator tracks the flow of money into and out of an asset over a longer time frame. It provides a broader perspective on market sentiment, smoothing out short-term fluctuations and highlighting longer-term trends.
Slow Money Flow Input Settings:
Slow Money Flow: Length: Default: 12
What it is: The period used for calculating the Slow Money Flow.
What it does: A longer period smooths out short-term fluctuations, providing a clearer view of the overall money flow trend.
Example: A length of 12 is often used by traders looking to identify sustained trends rather than short-term volatility.
Slow MFI Area Multiplier: Default: 5
What it is: A multiplier applied to the Slow Money Flow area calculation.
What it does: Adjusts the size of the Money Flow area on the chart, helping to emphasize the indicator’s significance.
Example: Increasing the multiplier can help highlight the Money Flow in markets with less volatile price action.
Y Position (Y Pos): Default: 0
What it is: The vertical position adjustment for the Slow Money Flow plot on the chart.
What it does: Allows for vertical repositioning of the Money Flow plot to maintain chart clarity when used with other indicators.
Example: Adjusting the Y Position ensures that the Slow Money Flow indicator does not overlap with other key indicators on the chart.
Slow MFI Style, Width, and Color:
What it is: Customization options for the visual display of the Slow Money Flow on the chart.
What it does: Allows you to choose the plot style (line or area), set the line width, and select colors to differentiate positive and negative money flow.
Example: Customizing the colors for the Slow Money Flow allows traders to quickly distinguish between buying and selling trends in the market.
RSI
Display of RSI:
Display of RSI Setting:
RSI Indicator Explanation
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. It is typically used to identify overbought or oversold conditions in the market, providing traders with potential signals for buying or selling.
RSI Input Settings:
RSI Source: Default: Close
What it is: The data source used for calculating the RSI.
What it does: Determines which price data (e.g., close, open) is used in the RSI calculation, affecting how the indicator reflects market conditions.
Example: Using the closing price is standard practice, as it reflects the final agreed-upon price for a given time period.
MA Type (Moving Average Type): Default: SMA
What it is: The type of moving average applied to the RSI for smoothing purposes.
What it does: Changes the smoothing technique of the RSI, impacting how quickly the indicator responds to price movements.
Example: Using an Exponential Moving Average (EMA) will make the RSI more sensitive to recent price changes compared to a Simple Moving Average (SMA).
RSI Length: Default: 14
What it is: The period over which the RSI is calculated.
What it does: Adjusts the sensitivity of the RSI. A shorter length (e.g., 7) makes the RSI more responsive to recent price changes, while a longer length (e.g., 21) smooths out the indicator, reducing the number of signals.
Example: A 14-period RSI is commonly used for identifying overbought and oversold conditions, providing a balance between sensitivity and reliability.
RSI Plot Style, Width, and Color:
What it is: Options to customize the appearance of the RSI line on the chart.
What it does: Allows you to adjust the visual representation of the RSI, including the line width and color.
Example: Setting a thicker line width and a bright color like yellow can make the RSI more visible on the chart, aiding in quick analysis.
Display of RSI with RSI Moving Average:
RSI Moving Average Explanation
The RSI Moving Average adds a smoothing layer to the RSI, helping to filter out noise and provide clearer signals. It is particularly useful for confirming trend strength and identifying potential reversals.
RSI Moving Average Input Settings:
MA Length: Default: 14
What it is: The period over which the Moving Average is calculated on the RSI.
What it does: Adjusts the smoothing of the RSI, helping to reduce false signals and provide a clearer trend indication.
Example: A 14-period moving average on the RSI can smooth out short-term fluctuations, making it easier to spot genuine overbought or oversold conditions.
MA Plot Style, Width, and Color:
What it is: Customization options for how the RSI Moving Average is displayed on the chart.
What it does: Allows you to adjust the line width and color, helping to differentiate the Moving Average from the main RSI line.
Example: Using a contrasting color for the RSI Moving Average (e.g., magenta) can help it stand out against the main RSI line, making it easier to interpret the indicator.
STOCHASTIC RSI
Display of Stochastic RSI:
Display of Stochastic RSI Setting:
Stochastic RSI Indicator Explanation
The Stochastic RSI (Stoch RSI) is a momentum oscillator that measures the level of the RSI relative to its high-low range over a set period of time. It is used to identify overbought and oversold conditions, providing potential buy and sell signals based on momentum shifts.
Stochastic RSI Input Settings:
Stochastic RSI Length: Default: 14
What it is: The period over which the Stochastic RSI is calculated.
What it does: Adjusts the sensitivity of the Stochastic RSI. A shorter length makes the indicator more responsive to recent price changes, while a longer length smooths out the fluctuations, reducing noise.
Example: A length of 14 is commonly used to identify momentum shifts over a medium-term period, providing a balanced view of potential overbought or oversold conditions.
Display of Stochastic RSI %K Line:
Stochastic RSI %K Line Explanation
The %K line in the Stochastic RSI is the main line that tracks the momentum of the RSI over the chosen period. It is the faster-moving component of the Stochastic RSI, often used to identify entry and exit points.
Stochastic RSI %K Input Settings:
%K Length: Default: 3
What it is: The period used for smoothing the %K line of the Stochastic RSI.
What it does: Smoothing the %K line helps reduce noise and provides a clearer signal for potential market reversals.
Example: A smoothing length of 3 is common, offering a balance between responsiveness and noise reduction, making it easier to spot significant momentum shifts.
%K Plot Style, Width, and Color:
What it is: Customization options for the visual representation of the %K line.
What it does: Allows you to adjust the appearance of the %K line on the chart, including line width and color, to fit your visual preferences.
Example: Setting a blue color and a medium width for the %K line makes it stand out clearly on the chart, helping to identify key points of momentum change.
%K Fill Color (Above):
What it is: The fill color that appears above the %K line on the chart.
What it does: Adds visual clarity by shading the area above the %K line, making it easier to interpret the direction and strength of momentum.
Example: Using a light blue fill color above the %K line can help emphasize bullish momentum, making it visually prominent.
Display of Stochastic RSI %D Line:
Stochastic RSI %D Line Explanation
The %D line in the Stochastic RSI is a moving average of the %K line and acts as a signal line. It is slower-moving compared to the %K line and is often used to confirm signals or identify potential reversals when it crosses the %K line.
Stochastic RSI %D Input Settings:
%D Length: Default: 3
What it is: The period used for smoothing the %D line of the Stochastic RSI.
What it does: Smooths out the %D line, making it less sensitive to short-term fluctuations and more reliable for identifying significant market signals.
Example: A length of 3 is often used to provide a smoothed signal line that can help confirm trends or reversals indicated by the %K line.
%D Plot Style, Width, and Color:
What it is: Customization options for the visual representation of the %D line.
What it does: Allows you to adjust the appearance of the %D line on the chart, including line width and color, to match your preferences.
Example: Setting an orange color and a thicker line width for the %D line can help differentiate it from the %K line, making crossover points easier to spot.
%D Fill Color (Below):
What it is: The fill color that appears below the %D line on the chart.
What it does: Adds visual clarity by shading the area below the %D line, making it easier to interpret bearish momentum.
Example: Using a light orange fill color below the %D line can highlight bearish conditions, making it visually easier to identify.
RSI & STOCHASTIC RSI OVERBOUGHT AND OVERSOLD LEVELS
Display of RSI & Stochastic with Overbought & Oversold Levels:
Display of RSI & Stochastic Overbought & Oversold Settings:
RSI & Stochastic Overbought & Oversold Levels Explanation
The Overbought (OB) and Oversold (OS) levels for RSI and Stochastic RSI indicators are key thresholds that help traders identify potential reversal points in the market. These levels are used to determine when an asset is likely overbought or oversold, which can signal a potential trend reversal.
RSI & Stochastic Overbought & Oversold Input Settings:
RSI & Stochastic Level 1 Overbought (OB) & Oversold (OS): Default: OB Level = 170, OS Level = 130
What it is: The first set of thresholds for determining overbought and oversold conditions for both RSI and Stochastic RSI indicators.
What it does: When the RSI or Stochastic RSI crosses above the overbought level, it suggests that the asset might be overbought, potentially signaling a sell opportunity. Conversely, when these indicators drop below the oversold level, it suggests the asset might be oversold, potentially signaling a buy opportunity.
Example: If the RSI crosses above 170, traders might look for signs of a potential trend reversal to the downside, while a cross below 130 might indicate a reversal to the upside.
RSI & Stochastic Level 2 Overbought (OB) & Oversold (OS): Default: OB Level = 180, OS Level = 120
What it is: The second set of thresholds for determining overbought and oversold conditions for both RSI and Stochastic RSI indicators.
What it does: These levels provide an additional set of reference points, allowing traders to differentiate between varying degrees of overbought and oversold conditions, potentially leading to more refined trading decisions.
Example: When the RSI crosses above 180, it might indicate an extreme overbought condition, which could be a stronger signal for a sell, while a cross below 120 might indicate an extreme oversold condition, which could be a stronger signal for a buy.
RSI & Stochastic Overbought (OB) Band Customization:
OB Level 1: Width, Style, and Color:
What it is: Customization options for the visual appearance of the first overbought band on the chart.
What it does: Allows you to set the line width, style (solid, dotted, dashed), and color for the first overbought band, enhancing its visibility on the chart.
Example: A dashed red line with medium width can clearly indicate the first overbought level, helping traders quickly identify when this threshold is crossed.
OB Level 2: Width, Style, and Color:
What it is: Customization options for the visual appearance of the second overbought band on the chart.
What it does: Allows you to set the line width, style, and color for the second overbought band, providing a clear distinction from the first band.
Example: A dashed red line with a slightly thicker width can represent a more significant overbought level, making it easier to differentiate from the first level.
RSI & Stochastic Oversold (OS) Band Customization:
OS Level 1: Width, Style, and Color:
What it is: Customization options for the visual appearance of the first oversold band on the chart.
What it does: Allows you to set the line width, style (solid, dotted, dashed), and color for the first oversold band, making it visually prominent.
Example: A dashed green line with medium width can highlight the first oversold level, helping traders identify potential buying opportunities.
OS Level 2: Width, Style, and Color:
What it is: Customization options for the visual appearance of the second oversold band on the chart.
What it does: Allows you to set the line width, style, and color for the second oversold band, providing an additional visual cue for extreme oversold conditions.
Example: A dashed green line with a thicker width can represent a more significant oversold level, offering a stronger visual cue for potential buying opportunities.
RSI DIVERGENCES
Display of RSI Divergence Labels:
Display of RSI Divergence Settings:
RSI Divergence Lookback Explanation
The RSI Divergence settings allow traders to customize the parameters for detecting divergences between the RSI (Relative Strength Index) and price action. Divergences occur when the price moves in the opposite direction to the RSI, potentially signaling a trend reversal. These settings help refine the accuracy of divergence detection by adjusting the lookback period and range. ( NOTE: This setting only imply to the RSI. This doesn't effect the STOCHASTIC RSI. )
RSI Divergence Lookback Input Settings:
Lookback Left: Default: 10
What it is: The number of bars to look back from the current bar to detect a potential divergence.
What it does: Defines the left-side lookback period for identifying pivot points in the RSI, which are used to spot divergences. A longer lookback period may capture more significant trends but could also miss shorter-term divergences.
Example: A setting of 10 bars means the script will consider pivot points up to 10 bars before the current bar to check for divergence patterns.
Lookback Right: Default: 1
What it is: The number of bars to look forward from the current bar to complete the divergence pattern.
What it does: Defines the right-side lookback period for confirming a potential divergence. This setting helps ensure that the identified divergence is valid by allowing the script to check subsequent bars for confirmation.
Example: A setting of 1 bar means the script will look at the next bar to confirm the divergence pattern, ensuring that the signal is reliable.
Lookback Range Min: Default: 5
What it is: The minimum range of bars required to detect a valid divergence.
What it does: Sets a lower bound on the range of bars considered for divergence detection. A lower minimum range might capture more frequent but possibly less significant divergences.
Example: Setting the minimum range to 5 ensures that only divergences spanning at least 5 bars are considered, filtering out very short-term patterns.
Lookback Range Max: Default: 60
What it is: The maximum range of bars within which a divergence can be detected.
What it does: Sets an upper bound on the range of bars considered for divergence detection. A larger maximum range might capture more significant divergences but could also include less relevant long-term patterns.
Example: Setting the maximum range to 60 bars allows the script to detect divergences over a longer timeframe, capturing more extended divergence patterns that could indicate major trend reversals.
RSI Divergence Explanation
RSI divergences occur when the RSI indicator and price action move in opposite directions, signaling potential trend reversals. This section of the settings allows traders to customize the appearance and detection of both regular and hidden bullish and bearish divergences.
RSI Divergence Input Settings:
R. Bullish Div Label: Default: True
What it is: An option to display labels for regular bullish divergences.
What it does: Enables or disables the visibility of labels that mark regular bullish divergences, where the price makes a lower low while the RSI makes a higher low, indicating a potential upward reversal.
Example: A trader might use this to spot buying opportunities in a downtrend when a bullish divergence suggests the trend may be reversing.
Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bullish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Selecting a green label color and a distinct line width makes bullish divergences easily recognizable on your chart.
R. Bearish Div Label: Default: True
What it is: An option to display labels for regular bearish divergences.
What it does: Enables or disables the visibility of labels that mark regular bearish divergences, where the price makes a higher high while the RSI makes a lower high, indicating a potential downward reversal.
Example: A trader might use this to spot selling opportunities in an uptrend when a bearish divergence suggests the trend may be reversing.
Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bearish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Choosing a red label color and a specific line width makes bearish divergences clearly stand out on your chart.
H. Bullish Div Label: Default: False
What it is: An option to display labels for hidden bullish divergences.
What it does: Enables or disables the visibility of labels that mark hidden bullish divergences, where the price makes a higher low while the RSI makes a lower low, indicating potential continuation of an uptrend.
Example: A trader might use this to confirm an existing uptrend when a hidden bullish divergence signals continued buying strength.
Hidden Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bullish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A softer green color with a thinner line width might be chosen to subtly indicate hidden bullish divergences, keeping the chart clean while providing useful information.
H. Bearish Div Label: Default: False
What it is: An option to display labels for hidden bearish divergences.
What it does: Enables or disables the visibility of labels that mark hidden bearish divergences, where the price makes a lower high while the RSI makes a higher high, indicating potential continuation of a downtrend.
Example: A trader might use this to confirm an existing downtrend when a hidden bearish divergence signals continued selling pressure.
Hidden Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bearish divergence labels.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A muted red color with a thinner line width might be selected to indicate hidden bearish divergences without overwhelming the chart.
Divergence Text Size and Color: Default: S (Small)
What it is: Settings to adjust the size and color of text labels for RSI divergences.
What it does: Allows you to customize the size and color of text labels that display the divergence information on the chart.
Example: Choosing a small text size with a bright white color can make divergence labels easily readable without taking up too much space on the chart.
STOCHASTIC DIVERGENCES
Display of Stochastic RSI Divergence Labels:
Display of Stochastic RSI Divergence Settings:
Stochastic RSI Divergence Explanation
Stochastic RSI divergences occur when the Stochastic RSI indicator and price action move in opposite directions, signaling potential trend reversals. These settings allow traders to customize the detection and visual representation of both regular and hidden bullish and bearish divergences in the Stochastic RSI.
Stochastic RSI Divergence Input Settings:
R. Bullish Div Label: Default: True
What it is: An option to display labels for regular bullish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark regular bullish divergences, where the price makes a lower low while the Stochastic RSI makes a higher low, indicating a potential upward reversal.
Example: A trader might use this to spot buying opportunities in a downtrend when a bullish divergence in the Stochastic RSI suggests the trend may be reversing.
Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bullish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Selecting a blue label color and a distinct line width makes bullish divergences in the Stochastic RSI easily recognizable on your chart.
R. Bearish Div Label: Default: True
What it is: An option to display labels for regular bearish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark regular bearish divergences, where the price makes a higher high while the Stochastic RSI makes a lower high, indicating a potential downward reversal.
Example: A trader might use this to spot selling opportunities in an uptrend when a bearish divergence in the Stochastic RSI suggests the trend may be reversing.
Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of regular bearish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: Choosing an orange label color and a specific line width makes bearish divergences in the Stochastic RSI clearly stand out on your chart.
H. Bullish Div Label: Default: False
What it is: An option to display labels for hidden bullish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark hidden bullish divergences, where the price makes a higher low while the Stochastic RSI makes a lower low, indicating potential continuation of an uptrend.
Example: A trader might use this to confirm an existing uptrend when a hidden bullish divergence in the Stochastic RSI signals continued buying strength.
Hidden Bullish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bullish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A softer blue color with a thinner line width might be chosen to subtly indicate hidden bullish divergences, keeping the chart clean while providing useful information.
H. Bearish Div Label: Default: False
What it is: An option to display labels for hidden bearish divergences in the Stochastic RSI.
What it does: Enables or disables the visibility of labels that mark hidden bearish divergences, where the price makes a lower high while the Stochastic RSI makes a higher high, indicating potential continuation of a downtrend.
Example: A trader might use this to confirm an existing downtrend when a hidden bearish divergence in the Stochastic RSI signals continued selling pressure.
Hidden Bearish Label Color, Line Width, and Line Color:
What it is: Settings to customize the appearance of hidden bearish divergence labels in the Stochastic RSI.
What it does: Allows you to choose the color of the labels, adjust the width of the divergence lines, and select the color for these lines.
Example: A muted orange color with a thinner line width might be selected to indicate hidden bearish divergences without overwhelming the chart.
Divergence Text Size and Color: Default: S (Small)
What it is: Settings to adjust the size and color of text labels for Stochastic RSI divergences.
What it does: Allows you to customize the size and color of text labels that display the divergence information on the chart.
Example: Choosing a small text size with a bright white color can make divergence labels easily readable without taking up too much space on the chart.
Alert System:
Custom Alerts for Divergences and Reversals:
What it is: The script includes customizable alert conditions to notify you of detected divergences or potential reversals based on WaveTrend, RSI, and Stochastic RSI.
What it does: Helps you stay informed of key market movements without constantly monitoring the charts, enabling timely decisions.
Example: Setting an alert for regular bearish divergence on the WaveTrend could notify you of a potential sell opportunity as soon as it is detected.
How to Use Alerts:
Set up custom alerts in TradingView based on these conditions to be notified of potential trading opportunities. Alerts are triggered when the indicator detects conditions that match the selected criteria, such as divergences or potential reversals.
By following the detailed guidelines and examples above, you can effectively use and customize this powerful indicator to suit your trading strategy.
For further understanding and customization, refer to the input settings within the script and adjust them to match your trading style and preferences.
How Components Work Together
Synergy and Cross-Validation: The indicator combines multiple layers of analysis to validate trading signals. For example, a WaveTrend buy signal that coincides with a bullish divergence in RSI and positive fast money flow is likely to be more reliable than any single indicator’s signal. This cross-validation reduces the likelihood of false signals and enhances decision-making.
Comprehensive Market Analysis: Each component plays a role in analyzing different aspects of the market. WaveTrend focuses on trend strength, Money Flow indicators assess market sentiment, while RSI and Stochastic RSI offer detailed views of price momentum and potential reversals.
Ideal For
Traders who require a reliable, multifaceted tool for detecting market trends and reversals.
Investors seeking a deeper understanding of market dynamics across different timeframes and conditions, whether in forex, equities, or cryptocurrency markets.
This script is designed to provide a comprehensive tool for technical analysis, combining multiple indicators and divergence detection into one versatile and customizable script. It is especially useful for traders who want to monitor various indicators simultaneously and look for convergence or divergence signals across different technical tools.
Acknowledgements
Special thanks to these amazing creators for inspiration and their creations:
I want to thank these amazing creators for creating there amazing indicators , that inspired me and also gave me a head start by making this indicator! Without their amazing indicators it wouldn't be possible!
vumanchu: VuManChu Cipher B Divergences.
MisterMoTa: RSI + Divergences + Alerts .
DevLucem: Plain Stochastic Divergence.
Note
This indicator is designed to be a powerful tool in your trading arsenal. However , it is essential to backtest and adjust the settings according to your trading strategy before applying it to live trading . If you have any questions or need further assistance, feel free to reach out.
Ultimate Bands [BigBeluga]Ultimate Bands
The Ultimate Bands indicator is an advanced technical analysis tool that combines elements of volatility bands, oscillators, and trend analysis. It provides traders with a comprehensive view of market conditions, including trend direction, momentum, and potential reversal points.
🔵 KEY FEATURES
● Ultimate Bands
Consists of an upper band, lower band, and a smooth middle line
Based on John Ehler's SuperSmoother algorithm for reduced lag
Bands are calculated using Root Mean Square Deviation (RMSD) for adaptive volatility measurement
Helps identify potential support and resistance levels
● Ultimate Oscillator
Derived from the price position relative to the Ultimate Bands
Oscillates between overbought and oversold levels
Provides insights into potential reversals and trend strength
● Trend Signal Line
Based on a Hull Moving Average (HMA) of the Ultimate Oscillator
Helps identify the overall trend direction
Color-coded for easy trend interpretation
● Heatmap Visualization
Displays the current state of the oscillator and trend signal
Provides an intuitive visual representation of market conditions
Shows overbought/oversold status and trend direction at a glance
● Breakout Signals
Optional feature to detect and display breakouts beyond the Ultimate Bands
Helps identify potential trend reversals or continuations
Visualized with arrows on the chart and color-coded candles
🔵 HOW TO USE
● Trend Identification
Use the color and position of the Trend Signal Line to determine the overall market trend
Refer to the heatmap for a quick visual confirmation of trend direction
● Entry Signals
Look for price touches or breaks of the Ultimate Bands for potential entry points
Use oscillator extremes in conjunction with band touches for stronger signals
Consider breakout signals (if enabled) for trend-following entries
● Exit Signals
Use opposite band touches or breakouts as potential exit points
Monitor the oscillator for divergences or extreme readings as exit signals
● Overbought/Oversold Analysis
Use the Ultimate Oscillator and heatmap to identify overbought/oversold conditions
Look for potential reversals when the oscillator reaches extreme levels
● Confirmation
Combine Ultimate Bands, Oscillator, and Trend Signal for stronger trade confirmation
Use the heatmap for quick visual confirmation of market conditions
🔵 CUSTOMIZATION
The Ultimate Bands indicator offers several customization options:
Adjust the main calculation length for bands and oscillator
Modify the number of standard deviations for band calculation
Change the signal line length for trend analysis
Toggle the display of breakout signals and candle coloring
By fine-tuning these settings, traders can adapt the Ultimate Bands indicator to various market conditions and personal trading strategies.
The Ultimate Bands indicator provides a multi-faceted approach to market analysis, combining volatility-based bands, oscillator analysis, and trend identification in one comprehensive tool. Its adaptive nature and visual cues make it suitable for both novice and experienced traders across various timeframes and markets. The integration of multiple analytical elements offers traders a rich set of data points to inform their trading decisions.
Money Flow Index Trend Zone Strength [UAlgo]The "Money Flow Index Trend Zone Strength " indicator is designed to analyze and visualize the strength of market trends and OB/OS zones using the Money Flow Index (MFI). The MFI is a momentum indicator that incorporates both price and volume data, providing insights into the buying and selling pressure in the market. This script enhances the traditional MFI by introducing trend and zone strength analysis, helping traders identify potential trend reversals and continuation points.
🔶 Customizable Settings
Amplitude: Defines the range for the MFI Zone Strength calculation.
Wavelength: Period used for the MFI calculation and Stochastic calculations.
Smoothing Factor: Smoothing period for the Stochastic calculations.
Show Zone Strength: Enables/disables visualization of the MFI Zone Strength line.
Show Trend Strength: Enables/disables visualization of the MFI Trend Strength area.
Trend Strength Signal Length: Period used for the final smoothing of the Trend Strength indicator.
Trend Anchor: Selects the anchor point (0 or 50) for the Trend Strength Stochastic calculation.
Trend Transform MA Length: Moving Average length for the Trend Transform calculation.
🔶 Calculations
Zone Strength (Stochastic MFI):
The highest and lowest MFI values over a specified amplitude are used to normalize the MFI value:
MFI Highest: Highest MFI value over the amplitude period.
MFI Lowest: Lowest MFI value over the amplitude period.
MFI Zone Strength: (MFI Value - MFI Lowest) / (MFI Highest - MFI Lowest)
By normalizing and smoothing the MFI values, we aim to highlight the relative strength of different market zones.
Trend Strength:
The smoothed MFI zone strength values are further processed to calculate the trend strength:
EMA of MFI Zone Strength: Exponential Moving Average of the MFI Zone Strength over the wavelength period.
Stochastic of EMA: Stochastic calculation of the EMA values, smoothed with the same smoothing factor.
Purpose: The trend strength calculation provides insights into the underlying market trends. By using EMA and stochastic functions, we can filter out noise and better understand the overall market direction. This helps traders stay aligned with the prevailing trend and make more informed trading decisions.
🔶 Usage
Interpreting Zone Strength: The zone strength plot helps identify overbought and oversold conditions. A higher zone strength indicates potential overbought conditions, while a lower zone strength suggests oversold conditions, can suggest areas for entry/exit decisions.
Interpreting Trend Strength: The trend strength plot visualizes the underlying market trend, can help signal potential trend continuation or reversal based on the chosen anchor point.
Using the Trend Transform: The trend transform plot provides an additional layer of trend analysis, helping traders identify potential trend reversals and continuation points.
Combine the insights from the zone strength and trend strength plots with other technical analysis tools to make informed trading decisions. Look for confluence between different indicators to increase the reliability of your trades.
🔶 Disclaimer:
Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.
Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.
Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.
Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.
No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.
Money Flow Index Crossover IndicatorThe "Money Flow Index Crossover Indicator" is a specialized technical analysis tool designed to assist traders by providing a clear visualization of potential buy and sell signals based on the Money Flow Index (MFI) and its smoothed moving average (SMA). This indicator delineates overbought and oversold zones, offering valuable insights into market dynamics. It operates as an oscillator on a separate pane, helping traders identify bullish and bearish market conditions with greater precision. By incorporating k-Nearest Neighbor (KNN) machine learning techniques, this indicator enhances the reliability and accuracy of the signals provided.
Originality and Usefulness:
This script is not just a simple mashup of existing indicators but integrates multiple components to create a unique and comprehensive analysis tool. The combined information from the MFI, its smoothed moving average, and the KNN machine learning techniques influence the form and accuracy of the Money Flow Index Average line and the Smoothed Money Flow Index line giving a visually helpful representation of overbought and oversold conditions. These lines are displayed in an oscillator style crossover, allowing users to visualize potential buy and sell zones for setting up potential signals. The user can adjust various settings of these tools behind the code to fine-tune the behavior and sensitivity of these lines. This integration provides a more robust and insightful trading tool that can adapt to different market conditions and trading styles.
How It Works:
Inputs:
MFI Settings:
Show Signals: Allows users to toggle the display of MFI and SMA crossing signals, which are critical for identifying potential market reversals.
Plot Amount: Determines the number of plots in the heat map, ranging from 2 to 28, enabling customization based on user preference.
Source: Defines the data source for MFI calculations, typically set to OHLC4 for a balanced view of price movements.
Smooth Initial MFI Length: Specifies the smoothing length for the initial MFI calculations to reduce noise and enhance signal clarity.
MFI SMA Length: Sets the length for the SMA used to smooth the MFI average, providing a more stable reference line.
Machine Learning Settings:
Use KInSource: Option to average MFI data by adding a lookback to the source, improving the accuracy of historical comparisons.
KNN Distance Requirement: Defines the distance calculation method for KNN (Max, Min, Both) to refine the data filtering process.
Machine Learning Length: Specifies the amount of machine learning data stored for smoothing results, balancing between responsiveness and stability.
KNN Length: Sets the number of KNN used to calculate the allowable distance range, enhancing the precision of the machine learning model.
Fast and Slow Lengths: Defines the lengths for fast and slow MFI calculations, allowing the indicator to capture different market dynamics.
Smoothing Length: Determines the length at which MFI calculations start for a more smoothed result, reducing false signals.
Variables and Functions:
KNN Function: Filters machine learning data to calculate valid distances based on defined criteria, ensuring more accurate MFI averages.
MFI Calculations: Computes both fast and slow MFI values, applies smoothing, and stores them for KNN processing to refine signal generation.
MFI KNN Calculation: Uses the KNN function to calculate the machine learning average of MFI values, enhancing signal reliability.
MFI Average and SMA: Calculates the average and smoothed MFI values, which are crucial for determining crossover signals.
Calculations:
MFI Values: Calculates current fast and slow MFI values and applies smoothing to reduce market noise.
Storage Arrays: Stores MFI data in arrays for KNN processing, enabling historical comparison and pattern recognition.
KNN Processing: Computes the machine learning average of MFI values using the KNN function, improving the robustness of signals.
MFI Average: Scales the MFI average to fit the heat map and calculates the smoothed SMA, providing a clear visual representation of trends.
Crossover Signals: Identifies bullish (MFI crossing above SMA) and bearish (MFI crossing below SMA) signals, which are key for making trading decisions.
Plots and Visuals:
MFI Average and SMA Lines: Plots the MFI average and smoothed SMA on the chart, allowing traders to easily visualize market trends and potential reversals.
Zones: Defines and plots overbought, neutral, and oversold zones for easy visualization. The recommended settings for these zones are:
Overbought Zone: Level set to approximately 24.6, indicating a potential market top.
Neutral Zone: Level set to 14, representing a balanced market condition.
Oversold Zone: Level set to 5.4, signaling a potential market bottom.
Crossover Marks: Plots circles on the chart to indicate bullish and bearish crossover signals, making it easier to spot entry and exit points.
Visual Alerts:
Bullish and Bearish Alerts: one can see overbought and oversold conditions and up alert conditions for bullish and bearish MFI crossover signals, enabling traders to have access to visual cues when these events are on trajectory to occur and, if they occur, act promptly with the visual representation of its zones.
Why It's Helpful:
The "Money Flow Index Crossover Indicator" provides traders with a sophisticated tool to identify potential buy and sell conditions based on the combined information of the MFI and its smoothed moving average. The KNN machine learning techniques enhance the accuracy of this indicator's clear visual representation of overbought, neutral, and oversold zones. This combination of data represented on the chart helps traders make informed decisions about market conditions. This indicator is particularly useful for traders looking to refine their entry and exit points by leveraging advanced data analysis in respect to overbought and oversold conditions.
Disclaimer:
This indicator is intended to assist traders in making informed decisions based on technical analysis. However, it is not a guarantee of future performance and should be used in conjunction with other analysis techniques and risk management practices. Past performance is not indicative of future results, and traders should exercise caution and perform their own due diligence before making any trading decisions.
Buffett Valuation Indicator [TradeDots]The Buffett Valuation Indicator (also known as the Buffett Index or Buffett Ratio) measures the ratio of the total United States stock market to GDP.
This indicator helps determine whether the valuation changes in US stocks are justified by the GDP level.
For example, the ratio is calculated based on the standard deviations from the historical trend line. If the value exceeds +2 standard deviations, it suggests that the stock market is overvalued relative to GDP, and vice versa.
This "Buffett Valuation Indicator" is an enhanced version of the original indicator. It applies a Bollinger Band over the Valuation/GDP ratio to identify overvaluation and undervaluation across different timeframes, making it efficient for use in smaller timeframes, e.g. daily or even hourly intervals.
HOW DOES IT WORK
The Buffett Valuation Indicator measures the ratio between US stock valuation and US GDP, evaluating whether stock valuations are overvalued or undervalued in GDP terms.
In this version, the total valuation of the US stock market is represented by considering the top 10 market capitalization stocks.
Users can customize this list to include other stocks for a more balanced valuation ratio. Alternatively, users may use S&P 500 ETFs, such as SPY or VOO, as inputs.
The ratio is plotted as a line chart in a separate panel below the main chart. A Bollinger Band with a default 100-period and multiples of 1 and 2 is used to identify overvaluation and undervaluation.
For instance, if the ratio line moves above the +2 standard deviation line, it indicates that stocks are overvalued, signaling a potential selling opportunity.
APPLICATION
When the indicator is applied to a chart, we observe the ratio line's movements relative to the standard deviation lines. The further the line deviates from the standard deviation lines, the more extreme the overvaluation or undervaluation.
We look for buying opportunities when the Buffett Index moves below the first and second standard deviation lines and sell opportunities when it moves above these lines. This indicator is used as a microeconomic confirmation tool, in combination with other indicators, to achieve higher win-rate setups.
RISK DISCLAIMER
Trading entails substantial risk, and most day traders incur losses. All content, tools, scripts, articles, and education provided by TradeDots serve purely informational and educational purposes. Past performances are not definitive predictors of future results.
Momentum & Squeeze Oscillator [UAlgo]The Momentum & Squeeze Oscillator is a technical analysis tool designed to help traders identify shifts in market momentum and potential squeeze conditions. This oscillator combines multiple timeframes and periods to provide a detailed view of market dynamics. It enhances the decision-making process for both short-term and long-term traders by visualizing momentum with customizable colors and alerts.
🔶 Key Features
Custom Timeframe Selection: Allows users to select a custom timeframe for oscillator calculations, providing flexibility in analyzing different market periods.
Recalculation Option: Enables or disables the recalculation of the indicator, offering more control over real-time data processing.
Squeeze Background Visualization: Highlights potential squeeze conditions with a background color, helping traders quickly spot consolidation periods.
Adjustable Squeeze Sensitivity: Users can modify the sensitivity of the squeeze detection, tailoring the indicator to their specific trading style and market conditions.
Bar Coloring Condition: Option to color the price bars based on momentum conditions, enhancing the visual representation of market trends.
Threshold Bands: Option to fill threshold bands for a clearer visualization of overbought and oversold levels.
Reference Lines: Display reference lines for overbought, oversold, and mid-levels, aiding in quick assessment of momentum extremes.
Multiple Output Modes: Offers different output visualization modes, including:
ALL: Displays all calculated momentum values (fast, medium, slow).
AVG: Shows the average momentum, providing a consolidated view.
STD: Displays the standard deviation of momentum, useful for understanding volatility.
Alerts: Configurable alerts for key momentum events such as crossovers and squeeze conditions, keeping traders informed of important market changes.
🔶 Usage
The Momentum & Squeeze Oscillator can be used for various trading purposes:
Trend Identification: Use the oscillator to determine the direction and strength of market trends. By analyzing the average, fast, medium, and slow momentum lines, traders can gain insights into short-term and long-term market movements.
Squeeze Detection: The indicator highlights periods of low volatility (squeeze conditions) which often precede significant price movements. Traders can use this information to anticipate and prepare for potential breakouts.
Overbought/Oversold Conditions: The oscillator helps identify overbought and oversold conditions, indicating potential reversal points. This is particularly useful for timing entry and exit points in the market.
Momentum Shifts: By monitoring the crossover of momentum lines with key levels (e.g., the 50 level), traders can spot shifts in market momentum, allowing them to adjust their positions accordingly.
🔶 Disclaimer:
Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.
Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.
Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.
Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.
No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.
Chande Momentum Oscillator (CMO) Buy Sell Strategy [TradeDots]The "Chande Momentum Oscillator (CMO) Buy Sell Strategy" leverages the CMO indicator to identify short-term buy and sell opportunities.
HOW DOES IT WORK
The standard CMO indicator measures the difference between recent gains and losses, divided by the total price movement over the same period. However, this version of the CMO has some limitations.
The primary disadvantage of the original CMO is its responsiveness to short-term volatility, making the signals less smooth and more erratic, especially in fluctuating markets. This instability can lead to misleading buy or sell signals.
To address this, we integrated the concept from the Moving Average Convergence Divergence (MACD) indicator. By applying a 9-period exponential moving average (EMA) to the CMO line, we obtained a smoothed signal line. This line acts as a filter, identifying confirmed overbought or oversold states, thereby reducing the number of false signals.
Similar to the MACD histogram, we generate columns representing the difference between the CMO and its signal line, reflecting market momentum. We use this momentum indicator as a criterion for entry and exit points. Trades are executed when there's a convergence of CMO and signal lines during an oversold state, and they are closed when the CMO line diverges from the signal line, indicating increased selling pressure.
APPLICATION
Since the 9-period EMA smooths the CMO line, it's less susceptible to extreme price fluctuations. However, this smoothing also makes it more challenging to breach the original +50 and -50 benchmarks.
To increase trading opportunities, we've tightened the boundary ranges. Users can customize the target benchmark lines in the settings to adjust for the volatility of the underlying asset.
The 'cool down period' is essentially the number of bars that await before the next signal generation. This feature is employed to dodge the occurrence of multiple signals in a short period.
DEFAULT SETUP
Commission: 0.01%
Initial Capital: $10,000
Equity per Trade: 80%
Signal Cool Down Period: 5
RISK DISCLAIMER
Trading entails substantial risk, and most day traders incur losses. All content, tools, scripts, articles, and education provided by TradeDots serve purely informational and educational purposes. Past performances are not definitive predictors of future results.
Fusion MFI RSIHello fellas,
This superb indicator summons two monsters called Relative Strength Index (RSI) and Money Flow Index (MFI) and plays the Yu-Gi-Oh! card "Polymerization" to combine them.
Overview
The Fusion MFI RSI Indicator is an advanced analytical tool designed to provide a nuanced understanding of market dynamics by combining the Relative Strength Index (RSI) and the Money Flow Index (MFI). Enhanced with sophisticated smoothing techniques and the Inverse Fisher Transform (IFT), this indicator excels in identifying key market conditions such as overbought and oversold states, trends, and potential reversal points.
Key Features (Brief Overview)
Fusion of RSI and MFI: Integrates momentum and volume for a comprehensive market analysis.
Advanced Smoothing Techniques: Employs Hann Window, Jurik Moving Average (JMA), T3 Smoothing, and Super Smoother to refine signals.
Inverse Fisher Transform (IFT) Enhances the clarity and distinctiveness of indicator outputs.
Detailed Feature Analysis
Fusion of RSI and MFI
RSI (Relative Strength Index): Developed by J. Welles Wilder Jr., the RSI measures the speed and magnitude of directional price movements. Wilder recommended using a 14-day period and identified overbought conditions above 70 and oversold conditions below 30.
MFI (Money Flow Index): Created by Gene Quong and Avrum Soudack, the MFI combines price and volume to measure trading pressure. It is typically calculated using a 14-day period, with over 80 considered overbought and under 20 as oversold.
Application in Fusion: By combining RSI and MFI, the indicator leverages RSI's sensitivity to price changes with MFI's volume-weighted confirmation, providing a robust analysis tool. This combination is particularly effective in confirming the strength behind price movements, making the signals more reliable.
Advanced Smoothing Techniques
Hann Window: Traditionally used to reduce the abrupt data discontinuities at the edges of a sample, it is applied here to smooth the price data.
Jurik Moving Average (JMA): Known for preserving the timing and smoothness of the data, JMA reduces market noise effectively without significant lag.
T3 Smoothing: Developed to respond quickly to market changes, T3 provides a smoother response to price fluctuations.
Super Smoother: Filters out high-frequency noise while retaining important trends.
Application in Fusion: These techniques are chosen to refine the output of the combined RSI and MFI values, ensuring the indicator remains responsive yet stable, providing clearer and more actionable signals.
Inverse Fisher Transform (IFT):
Developed by John Ehlers, the IFT transforms oscillator outputs to enhance the clarity of extreme values. This is particularly useful in this fusion indicator to make critical turning points more distinct and actionable.
Mathematical Calculations for the Fusion MFI RSI Indicator
RSI (Relative Strength Index)
The RSI is calculated using the following steps:
Average Gain and Average Loss: First, determine the average gain and average loss over the specified period (typically 14 days). This is done by summing all the gains and losses over the period and then dividing each by the period.
Average Gain = (Sum of Gains over the past 14 periods) / 14
Average Loss = (Sum of Losses over the past 14 periods) / 14
Relative Strength (RS): This is the ratio of average gain to average loss.
RS = Average Gain / Average Loss
RSI: Finally, the RSI is calculated using the RS value:
RSI = 100 - (100 / (1 + RS))
MFI (Money Flow Index)
The MFI is calculated using several steps that incorporate both price and volume:
Typical Price: Calculate the typical price for each period.
Typical Price = (High + Low + Close) / 3
Raw Money Flow: Multiply the typical price by the volume for the period.
Raw Money Flow = Typical Price * Volume
Positive and Negative Money Flow: Compare the typical price of the current period to the previous period to determine if the money flow is positive or negative.
If today's Typical Price > Yesterday's Typical Price, then Positive Money Flow = Raw Money Flow; Negative Money Flow = 0
If today's Typical Price < Yesterday's Typical Price, then Negative Money Flow = Raw Money Flow; Positive Money Flow = 0
Money Flow Ratio: Calculate the ratio of the sum of Positive Money Flows to the sum of Negative Money Flows over the past 14 periods.
Money Flow Ratio = (Sum of Positive Money Flows over 14 periods) / (Sum of Negative Money Flows over 14 periods)
MFI: Finally, calculate the MFI using the Money Flow Ratio.
MFI = 100 - (100 / (1 + Money Flow Ratio))
Fusion of RSI and MFI
The final Fusion MFI RSI value could be calculated by averaging the IFT-transformed values of RSI and MFI, providing a single oscillator value that reflects both momentum and volume-weighted price action:
Fusion MFI RSI = (MFI weight * MFI) + (RSI weight * RSI)
Suggested Settings and Trading Rules
Original Usage
RSI: Wilder suggested buying when the RSI moves above 30 from below (enter long) and selling when the RSI moves below 70 from above (enter short). He recommended exiting long positions when the RSI reaches 70 or higher and exiting short positions when the RSI falls below 30.
MFI: Quong and Soudack recommended buying when the MFI is below 20 and starts rising (enter long), and selling when it is above 80 and starts declining (enter short). They suggested exiting long positions when the MFI reaches 80 or higher and exiting short positions when the MFI falls below 20.
Fusion Application
Settings: Use a 14-day period for this indicator's calculations to maintain consistency with the original settings suggested by the inventors.
Trading Rules:
Enter Long Signal: Consider entering a long position when both RSI and MFI are below their respective oversold levels and begin to rise. This indicates strong buying pressure supported by both price momentum and volume.
Exit Long Signal: Exit the long position when either RSI or MFI reaches its respective overbought threshold, suggesting a potential reversal or decrease in buying pressure.
Enter Short Signal: Consider entering a short position when both indicators are above their respective overbought levels and begin to decline, suggesting that selling pressure is mounting.
Exit Short Signal: Exit the short position when either RSI or MFI falls below its respective oversold threshold, indicating diminishing selling pressure and a potential upward reversal.
How to Use the Indicator
Select Source and Timeframe: Choose the data source and the timeframe for analysis.
Configure Fusion Settings: Adjust the weights for RSI and MFI.
Choose Smoothing Technique: Select and configure the desired smoothing method to suit the market conditions and personal preference.
Enable Fisherization: Optionally apply the Inverse Fisher Transform to enhance signal clarity.
Customize Visualization: Set up gradient coloring, background plots, and bands according to your preferences.
Interpret the Indicator: Use the Fusion value and visual cues to identify market conditions and potential trading opportunities.
Conclusion
The Fusion MFI RSI Indicator integrates classical and modern technical analysis concepts to provide a comprehensive tool for market analysis. By combining RSI and MFI with advanced smoothing techniques and the Inverse Fisher Transform, this indicator offers enhanced insights, aiding traders in making more informed and timely trading decisions. Customize the settings to align with your trading strategy and leverage this powerful tool to navigate financial markets effectively.
Best regards,
simwai
---
Credits to:
@loxx – T3
@everget – JMA
@cheatcountry – Hann Window
Linear Regression Oscillator [ChartPrime]Linear Regression Oscillator Indicator
Overview:
The Linear Regression Oscillator is a custom TradingView indicator designed to provide insights into potential mean reversion and trend conditions. By calculating a linear regression on the closing prices over a user-defined period, this oscillator helps identify overbought and oversold levels and highlights trend changes. The indicator also offers visual cues and color-coded price bars to aid in quick decision-making.
Key Features:
◆ Customizable Look-Back Period:
Input: Length
Default: 20
Description: Determines the period over which the linear regression is calculated. A longer period smooths the oscillator but may lag, while a shorter period is more responsive but may be noisier.
◆ Overbought and Oversold Thresholds:
Inputs: Upper Threshold and Lower Threshold
Default: 1.5 and -1.5 respectively
Description: Define the upper and lower bounds for identifying overbought and oversold conditions. Values outside these thresholds suggest potential reversals.
◆ Candlestick Color Plotting:
Input: Plot Bar Color
Default: false
Description: Option to color the price bars based on the oscillator's value, providing a visual representation of market conditions. Bars turn cyan for positive oscillator values and blue for negative.
◆ Mean Reversion and Trend Signals:
Visual markers and labels indicate when the oscillator suggests mean reversion or trend changes, aiding in identifying key market turning points.
◆ Invalidation Levels:
Tracks the highest and lowest prices over a recent period to set levels where the current trend signal would be considered invalidated.
◆ Gradient Color Coding:
Utilizes gradient color coding to enhance the visualization of oscillator values, making it easier to interpret overbought and oversold conditions.
◆ Usage Notes:
Setting the Look-Back Period:
Adjust the "Length" input based on the timeframe and the type of trading you are conducting. Shorter periods are more suited for intraday trading, while longer periods can be used for swing trading.
Interpreting Thresholds:
Use the upper and lower threshold inputs to fine-tune the sensitivity of the overbought and oversold signals. Higher absolute values reduce the number of signals but increase their reliability.
Candlestick Coloring:
Enabling the "Plot Bar Color" option can help quickly identify the current state of the oscillator in relation to the zero line. This visual aid can be particularly useful in fast-moving markets.
Mean Reversion and Trend Signals:
Pay attention to the symbols and labels on the chart indicating mean reversion and trend changes. These signals are designed to highlight potential entry and exit points.
Invalidation Levels:
Use the plotted invalidation levels as stop-loss or signal invalidation points. If the price moves beyond these levels, the current trend signal is likely invalid.
This indicator helps traders identify overbought and oversold conditions, potential mean reversions, and trend changes based on the linear regression of the closing prices over a specified look-back period.
Turbo Oscillator [RunRox]Introducing Turbo Oscillator by RunRox, our new indicator that combines a multitude of useful and unique features, which we will detail in this post.
List of Advanced Technologies:
Real-Time Divergences: Detects discrepancies between price movements and oscillator indicators to forecast potential price reversals.
Real-Time Hidden Divergences: We identify hidden divergences in real-time. These are not the standard type of divergences; they are opposite to regular divergences, providing unique insights into potential market movements.
Overbought and Oversold Zones: Identifies areas where the market is potentially overextended, suggesting possible entry and exit points.
Signal Line: Indicates the market direction, helping traders to quickly understand current trends.
Money Flow Histogram: Shows the flow of money into and out of the market, providing insights into buying and selling pressure.
Predicted Reversal Zones: Pinpoints areas where the market might experience reversals, aiding in strategic planning and risk management. These zones also serve as potential areas for taking profits, enhancing their utility for exit strategy planning.
Customizable Alerts: You can flexibly set up alerts for any events detected by our indicator, ensuring you stay informed about critical market movements.
To begin with, I would like to describe the difference between classic divergences and hidden divergences.
As you can see, these are opposite situations. Our oscillator identifies both types of divergences and displays them in real-time.
Divergences can serve as points where the price might reverse in the opposite direction, making both classic and hidden divergences powerful tools for spotting reversal points. I'll show a few examples of how divergences are used in our oscillator.
Classic Divergences - which we identify in real-time. As you can see, the price often reacts strongly to the formation of these divergences, frequently changing its direction.
Hidden Divergences - we also observe frequent movement in the opposite direction on the chart. The advantage of our indicator is that we show divergences in real-time without delays, allowing you to react immediately to trend changes.
Overbought and Oversold Zones - These zones allow you to see trend changes when the price is clearly overbought or oversold. When the color changes from a contrasting shade to a neutral one, you can observe the trend shift. The lines work by combining the positivity/negativity of the histogram, the positivity/negativity of the signal line, and the direction of the signal line (red/green). This sophisticated interaction provides precise insights into market conditions, making it an invaluable tool for traders.
Signal Line - This provides insights into trend changes and price reversals. The points on the line better indicate the beginning of a trend shift. These points can vary in size, offering a clearer understanding of the strength of the emerging trend. This feature works in combination with RSI, Stochastic, and MFI. RSI and MFI are top-tier indicators, while Stochastic adds responsiveness and sensitivity to trend changes, ensuring you capture every market movement accurately and promptly.
Money Flow Histogram - As shown in the example, our histogram displays the divergence between money flow and the actual price. You can see that while the price is rising, the money flow is decreasing, indicating insufficient demand for the asset and an imminent trend change. This feature uses MFI with an extended period, providing a more comprehensive and accurate analysis of market conditions. The extended period enhances the reliability of the Money Flow Index, making it an essential tool for identifying subtle shifts in market dynamics.
Predicted Reversal Zones - We automatically identify potential price reversal zones and display them above our overbought and oversold zones. In cases of strong overbought or oversold conditions, we detect potential price pullbacks and mark the beginning of a trend change. This helps you better identify trend shifts. We recommend considering these zones as potential take profit points for your trades.
Customizable Alerts - Our flexible alert system allows you to receive notifications only for the events you are interested in. These can include:
1. Classic Divergences
2. Hidden Divergences
3. Overbought or Oversold conditions on the status line
4. Strong Overbought or Oversold conditions on the status line
5. Signals from the signal line
6. Reversal zones in any direction
Our oscillator is a unique indicator that provides a comprehensive understanding of price movements. It can be used as a standalone tool for analyzing price action.
Here are a few examples of using our Oscillator in practice:
In the example above, you can see three conditions that have formed for a potential trade:
1. Clear overbought condition with a formed reversal point.
2. Decreasing Money Flow Index diverging from the rising price.
3. Formed classic divergence.
The entry point could be the formed divergence, while the exit point could be the overbought condition at the bottom of the oscillator along with the reversal points.
Here's another example of using hidden divergence, where you can see three conditions for a potential trade:
1. Overbought zone
2. Formed hidden divergence
3. Start of bearish movement indicated by the signal line
You can enter the trade either when the hidden divergence forms or wait for confirmation of the trend change by the signal line and enter the trade when the corresponding signal forms on the signal line. The exit point could be the opposite reversal point or the formation of a new hidden divergence.
We have demonstrated a few examples of how you can use our indicator, but we are confident that you will find many more applications in your own strategies.
Oscillator offers a variety of customizable parameters to tailor the indicator to your trading preferences. Here’s what our settings include:
Signal Line
Turn On/Off: Enable or disable the signal line.
Length: Set the length period for the signal line calculation.
Smooth: Adjust the smoothing level of the signal line for more accurate display.
Histogram
Turn On/Off: Enable or disable the histogram.
Length: Set the length period for the histogram calculation.
Smooth: Adjust the smoothing level of the histogram.
Other
Show Divergence Line: Display divergence lines on the chart.
Show Hidden Divergence: Display hidden divergences.
Show Status Line: Show the status line indicating overbought or oversold conditions.
Show TP Signal: Display signals for take profit.
Show Reversal Points: Display potential trend reversal points.
Delete Broken Divergence Lines: Remove broken divergence lines from the chart.
Alerts Customization
Signal Line Bull/Bear: Set alerts for bullish or bearish signals from the signal line.
TP Bull/Bear: Set alerts for take profit signals.
Status Bull/Bear: Set alerts for bullish or bearish status conditions.
Status Bull+/Bear+: Set enhanced alerts for stronger bullish or bearish status conditions.
Divergence Bull/Bear: Set alerts for bullish or bearish divergences.
Hidden Divergence Bull/Bear: Set alerts for hidden bullish or bearish divergences.
With these comprehensive settings, you can fine-tune the Oscillator to perfectly fit your trading strategy and preferences.
Our indicator utilizes technologies such as RSI, Stochastic, and Money Flow Index, with numerous enhancements from our team. It includes exclusive features such as real-time detection of hidden and classic divergences, identification of reversal points using our unique methodology, and much more.
Disclaimer:
While we consider our Turbo Oscillator to be an excellent tool, it is important to understand that past performance is not indicative of future results. We recommend approaching market analysis comprehensively, using a combination of tools and techniques to make well-informed trading decisions. Always consider the full range of market data and risks when using any trading indicator.
Price Ratio Indicator [ChartPrime]The Price Ratio Indicator is a versatile tool designed to analyze the relationship between the price of an asset and its moving average. It helps traders identify overbought and oversold conditions in the market, as well as potential trend reversals.
◈ User Inputs:
MA Length: Specifies the length of the moving average used in the calculation.
MA Type Fast: Allows users to choose from various types of moving averages such as Exponential Moving Average (EMA), Simple Moving Average (SMA), Weighted Moving Average (WMA), Volume Weighted Moving Average (VWMA), Relative Moving Average (RMA), Double Exponential Moving Average (DEMA), Triple Exponential Moving Average (TEMA), Zero-Lag Exponential Moving Average (ZLEMA), and Hull Moving Average (HMA).
Upper Level and Lower Level: Define the threshold levels for identifying overbought and oversold conditions.
Signal Line Length: Determines the length of the signal line used for smoothing the indicator's values.
◈ Indicator Calculation:
The indicator calculates the ratio between the price of the asset and the selected moving average, subtracts 1 from the ratio, and then smooths the result using the chosen signal line length.
// 𝙄𝙉𝘿𝙄𝘾𝘼𝙏𝙊𝙍 𝘾𝘼𝙇𝘾𝙐𝙇𝘼𝙏𝙄𝙊𝙉𝙎
//@ Moving Average's Function
ma(src, ma_period, ma_type) =>
ma =
ma_type == 'EMA' ? ta.ema(src, ma_period) :
ma_type == 'SMA' ? ta.sma(src, ma_period) :
ma_type == 'WMA' ? ta.wma(src, ma_period) :
ma_type == 'VWMA' ? ta.vwma(src, ma_period) :
ma_type == 'RMA' ? ta.rma(src, ma_period) :
ma_type == 'DEMA' ? ta.ema(ta.ema(src, ma_period), ma_period) :
ma_type == 'TEMA' ? ta.ema(ta.ema(ta.ema(src, ma_period), ma_period), ma_period) :
ma_type == 'ZLEMA' ? ta.ema(src + src - src , ma_period) :
ma_type == 'HMA' ? ta.hma(src, ma_period)
: na
ma
//@ Smooth of Source
src = math.sum(source, 5)/5
//@ Ratio Price / MA's
p_ratio = src / ma(src, ma_period, ma_type) - 1
◈ Visualization:
The main plot displays the price ratio, with color gradients indicating the strength and direction of the ratio.
The bar color changes dynamically based on the ratio, providing a visual representation of market conditions.
Invisible Horizontal lines indicate the upper and lower threshold levels for overbought and oversold conditions.
A signal line, smoothed using the specified length, helps identify trends and potential reversal points.
High and low value regions are filled with color gradients, enhancing visualization of extreme price movements.
MA type HMA gives faster changes of the indicator (Each MA has its own specifics):
MA type TEMA:
◈ Additional Features:
A symbol displayed at the bottom right corner of the chart provides a quick visual reference to the current state of the indicator, with color intensity indicating the strength of the ratio.
Overall, the Price Ratio Indicator offers traders valuable insights into price dynamics and helps them make informed trading decisions based on the relationship between price and moving averages. Adjusting the input parameters allows for customization according to individual trading preferences and market conditions.
Hybrid Overbought/Oversold OverlayIntroduction
This is a new representation of my well-known oscillator Hybrid Overbought/Oversold Detector overlaid on the chart. The script utilizes the following 12 different oscillators to bring forth a new indicator which I call it Hybrid OB/OS .
Utilized Oscillators
The utilized oscillators here are:
Bollinger Bands %B
Chaikin Money Flow (CMF)
Chande Momentum Oscillator (CMO)
Commodity Channel Index (CCI)
Disparity Index (DIX)
Keltner Channel %K
Money Flow Index (MFI)
Rate Of Change (ROC)
Relative Strength Index (RSI)
Relative Vigor Index (RVI/RVGI)
Stochastic
Twiggs Money Flow (TMF)
The challenging part of utilizing mentioned oscillators was that some of their formulas range are not similar and some of them does not have a mathematical range at all. So I used a normalization function to normalize all their output values to (0, 100) interval.
Overbought/Oversold Levels Calculation
I noticed that the levels which considered as OB/OS level by various traders for each of the utilized oscillators are so different, e.g., many traders consider 30 as OS level and 70 as OB level for RSI and some others take 20 and 80 as the levels, or some traders consider 20 and 80 as OS/OB levels for Stochastic oscillator. Also these levels could be different on different assets, e.g., OB/OS levels for CCI on EURUSD chart might be 80 and 20 while the levels on BTCUSDT chart might be 75 and 25, and so on.
So I decided to make a routine to automate the calculation of these levels using historical data. By this feature, my indicator would calculate the corresponding levels for the oscillators on current chart and then decide about the overbought/oversold situation of each one, which leads to a more accurate Hybrid OB/OS indication.
As the result, if all 12 individual oscillators say it's overbought/oversold, the Hybrid OB/OS shows 100% overbought/oversold, vice versa, if none of them say it's overbought/oversold, the Hybrid OB/OS shows 0, and so on.
The Overlaying Oscillator Problem!
A programming-related challenge here was that Pine Script assigns two separate spaces to the oscillators and the overlaid indicators, and the programmers are limited to use just one of them in each of their codes.
Knowing this, I was forced to simulate the oscillator space on the chart and display my oscillator as a diagram somehow. Of course it won't be as nice as the oscillator itself, because the relation between the main chart bars and the oscillator bars could not be obtained, but it's better than nothing!
Settings and Usage
The indicator settings contain some options about the calculations, the diagram display and the signals appearance. By default they are fine, but you could change them as you prefer.
This indicator is better to be used alongside other indicators as a confirmation (specially in counter-trend strategies I believe). Also it generates an external signal which you could use it in your own designed indicators as well.
Feel free to test it and also the former form of the Hybrid OB/OS . Good Luck!
RSI Multi Strategies With Overlay SignalsHello everyone,
In this indicator, you will find 6 different entry and exit signals based on the RSI :
Entry into overbought and oversold zones
Exit from overbought and oversold zones
Crossing the 50 level
RSI cross RSI MA below or above the 50 level
RSI cross RSI MA in the overbought or oversold zones
RSI Divergence
With the signals identified, you can create your own strategy . (If you have any suggestions, please mention them in the comments).
Beyond these signals, you can set SL (Stop Loss) and TP (Take Profit) levels to better manage your positions.
SL Methods:
Percentage: The stop loss is determined by the percentage you specify.
ATR : The stop level is determined based on the Average True Range (ATR).
TP Methods:
Percentage: The take profit is determined by the percentage you specify.
RR ( Risk Reward ): The take profit level is determined based on the distance from the stop level.
You can mix and match these options as you like.
What makes the indicator unique and effective is its ability to display the RSI in the bottom chart and the signals, SL (Stop Loss), and TP (Take Profit) levels in the overlay chart simultaneously. This feature allows you to manage your trading quickly and easily without the need for using two separate indicators.
Let's try out a few strategies together.
My entry signal: RSI Entered OS (Oversold) Zone
My exit signal: RSI Entered OB (Overbought) Zone
I'm not using a stoploss for this strategy ("Fortune favors the brave").
Let's keep ourselves safe by adding a stop loss.
I'm adding an ATR-based stop loss.
I think it's better now.
If you have any questions or suggestions about the indicator, you can contact me.
Cheers
Trend Tide Oscillator [UAlgo]🔶 Description:
The "Trend Tide Oscillator " is a technical analysis tool designed to identify potential trend reversals and overbought/oversold conditions in the market. It calculates an oscillator based on the Commodity Channel Index (CCI) and then applies smoothing techniques to provide a clearer view of market momentum.
🔶 Key Features:
Oscillator Calculation : The indicator calculates an oscillator based on the Commodity Channel Index (CCI), which is a momentum-based oscillator used to identify overbought and oversold conditions.
Smoothing : Smoothing techniques are applied to the oscillator to reduce noise and provide a clearer view of market momentum. This helps traders in identifying trends more effectively.
Support and Resistance Zones : The indicator plots support and resistance zones based on the highest and lowest values of the oscillator over a specified lookback (default 50) period. These zones can help traders identify potential areas of price reversal. The indicator considers volatility when plotting the support and resistance zones. This aims to create more adaptable levels that account for fluctuating market conditions.
Visualization : The indicator visually represents overbought and oversold conditions with shapes (⚠️), aiding traders in quickly identifying potential entry or exit points.
Customization : Users can adjust parameters such as oscillator length, smoothing, and overbought/oversold levels, support and resistance lookbacks according to their trading preferences.
🔶 Disclaimer :
This indicator is provided for informational and educational purposes only and should not be considered as financial advice. Trading in the financial markets involves risk, and users should conduct their own research and analysis before making any investment decisions.
RSI AcceleratorThe Relative Strength Index (RSI) is like a fitness tracker for the underlying time series. It measures how overbought or oversold an asset is, which is kinda like saying how tired or energized it is.
When the RSI goes too high, it suggests the asset might be tired and due for a rest, so it could be a sign it's gonna drop. On the flip side, when the RSI goes too low, it's like the asset is pumped up and ready to go, so it might be a sign it's gonna bounce back up. Basically, it helps traders figure out if a stock is worn out or revved up, which can be handy for making decisions about buying or selling.
The RSI Accelerator takes the difference between a short-term RSI(5) and a longer-term RSI(14) to detect short-term movements. When the short-term RSI rises more than the long-term RSI, it typically refers to a short-term upside acceleration.
The conditions of the signals through the RSI Accelerator are as follows:
* A bullish signal is generated whenever the Accelerator surpasses -20 after having been below it.
* A bearish signal is generated whenever the Accelerator breaks 20 after having been above it.
