[Suitable Hope] Crypto Marketcap Dominance OverviewThe Crypto Marketcap Dominance Overview indicator is a simple yet very useful indicator that aims at helping traders identify where the crypto liquidity is flowing. The indicator uses Cryptocap's real time crypto marketcap dominance data (in %) between several key categories:
- Bitcoin
- True total 2 (altcoins and Ethereum excluding the top 3 biggest stablecoins)
- True total 3 (altcoins excl. Ethereum and the top 3 biggest stablecoins)
- Ethereum
- Stablecoins
- Defi.
The indicator works across all timeframes but is best used on the default daily timeframe to identify changes in liquidity trends between the different categories. More categories can be expected to be added in the future; depending on Cryptocap's available data.
Traders or users of this indicator have a selections of options:
- Choose a dedicated timeframe
- Turn on/off the individual categories they wish to use
- Turn on/off labels
- Change global colour coding of each category and label
- Activate or deactive the 0 to 100% bands
Although there are a couple of similar indicators trying to do something similar, I tend to find them lacking clarity. I coded this indicator to provide a more simple and clearer view of the crypto marketcap dominance. I hope you find this indicator helpful.
Happy trading and good luck!
Portfolio management
Total Value and Profit for Multiple StocksThis Pine Script code example can be useful for traders and investors who want to monitor and analyze multiple stocks simultaneously on the TradingView platform. Here's a description of how the code can be used and what it is useful for:
1. **Monitoring Multiple Stocks:** The code allows users to input data for up to 10 different stocks, including stock symbols, purchase prices per share, and the number of shares they own. This makes it easy to monitor their portfolio of multiple stocks in one place.
2. **Total Value and Profit:** For each of the entered stocks, the code calculates the total value of the holdings (number of shares multiplied by the current price) and displays it as a label on the chart. It also calculates the profit (or loss) by subtracting the purchase price from the current price per share and multiplying it by the number of shares. This provides traders with a quick overview of how much money they have invested and how much they have earned or lost.
3. **Monitoring Daily Movements:** The code also displays information about the day's price movements, including the lowest and highest prices for the current trading session. It also calculates the price difference since the last closing, providing insight into how the stocks are performing compared to the previous trading day.
4. **Color Coding for Profit/Loss:** The labels displayed on the chart are color-coded. They appear in green if there's a profit and in red if there's a loss. This makes it easy to identify how each stock in the portfolio is performing.
5. **Quick Identification:** With this code, users can quickly identify and focus on the stocks that require attention. They can see which stocks are yielding profits and which are incurring losses, as well as get an overview of the entire portfolio at a glance.
In essence, this code provides traders and investors with the ability to monitor and analyze multiple stocks simultaneously, allowing them to make informed decisions about their portfolio's performance and any adjustments that may need to be made. It also offers a visual way to assess profit or loss for each stock, which can be valuable for risk management and strategy development.
Altcoin ManagerThe Altcoin Manager is a comprehensive script for identifying the current altcoin narrative by tracking and analyzing of a wide array of altcoins across various blockchain layers and categories, such as DeFi, GameFi, AI, and Meme coins. Ideal for traders looking to get a broad yet detailed view of the altcoin market, covering various sectors and chains.
The Key Features:
Versatile Asset Tracking:
Tracks 40 different cryptocurrencies (as of publishing) across different categories, allowing for a diversified and detailed analysis of the altcoin market.
Customizable Assets and Category Analysis:
Select 20 of your own coins across 4 different categories such as DeFi, GameFi, AI, and Meme coins as well as specifying their individual chains.
Dynamic Layer and Chain Analysis:
Includes options to plot and analyze specific blockchain layers and chains such as Ethereum Chain, Solana Chain, BNB Smart Chain, Arbitrum Chain, and Polygon Chain. The script associates various assets with specific blockchains, providing a clearer picture of how different segments of the altcoin market are performing.
Cumulative and Per-Candle Change:
Switch between viewing the total cumulative change since a set start date or the per-candle change, offering flexibility in analyzing price movements over different timeframes.
Denomination Adjustment:
Includes a functionality to denominate asset prices in other currencies or crypto such as BTC, allowing for a more tailored financial analysis according to your preference.
Moving Averages for Categories and Chains:
Calculates and plots moving averages for each category and chain, aiding in the identification of trends over the selected moving average length.
How do I use it?
This script is not used with any particular chart. Instead, assign it it's own tab and layout.
For a clearer analysis, use multiple different panels to track Categories and Chains separately, both Cumulative for a longer term analysis and Per-Candle to find ongoing breakouts and changes in trend.
You can either use the pre-selected altcoins to represent the market, or you can select your own.
The Layer 1 and Layer 2 are not customizable but consists of 15 popular Layer 1 incl Bitcoin, Ethereum, Solana etc. Layer 2 consists of 5 popular Layer 2.
S&P500 Investment AverageThis script lets you choose the best time to invest in the S&P 500, thanks to a line showing an average growth of 8.32% over 50 years, starting from the price of $86.84 on January 1, 1974.
Thanks to this line indicating the price of the S&P 500 based on the average growth of the index. You'll be able to tell when the index is overvalued or undervalued.
When the price is below 20% of the line, it's a good time to invest your cash for the crash. And when it's back in the black, it's time to reduce your DCA.
You can also specify a specific date in the settings to watch the percentage whenever you like.
ATH adjusted by Global Money SupplyHi all,
Hereby a script that calculated the ATH that is corrected by the global money supply. It shows that regular ATH (based on high daily candles) as well as the ATH that is adjusted by the global money supply index.
The global money supply index is calculated using the money supply on the first bar and this is then used as the reference point for the money supply in the script. The money supply is based on a lot of central banks money supplies and calculated to a USD value.
Central Bank Liquidity YOY % ChangeThis shows the percent change from a year ago (YOY%) in Central Bank Liquidity
It's important to the study rate of change data in this liquidity metric and compare it to the nominal chart.
When this chart is accelerating, liquidity is being added, meaning it's a good time to be in assets.
When this chart is declining, liquidity is being removed, meaning it's a good time to be in cash.
Bottoms in markets coincide with the rate of change of liquidity going from negative (below the zero line) to positive (above zero)
Central Bank Liquidity = Total value of the assets of all Federal Reserve Banks - Overnight Reverse Repurchase Agreements (RRP) - The Treasury General Account (TGA)
Value of my assetIndicator Name: Value of my asset
This indicator displays the total value of the asset you hold on a chart. It is particularly useful for tracking the value of your position in real time directly on the chart.
How to use it:
Quantity of the asset in possession: Enter the quantity of the asset you currently hold. By default, this value is 0.
Text color: Choose the color of the text that will be displayed on the chart. By default, this color is white.
Background color: Choose the background color of the label that will be displayed on the chart. By default, this color is blue.
Calculation of the value to display: The value to display is calculated by multiplying the closing value (close) by the quantity of the asset you hold (quantity). This value represents the total value of your position.
Display of the label: A label is displayed on the chart with the symbol of the asset, the quantity you hold, and the total value of your position. This label is updated with each new bar.
Yearly Return [%] - VisualizedCalculates the % Return from the first trading candle of any given year, and shows the % Return at that year end.
Portfolio TableA tool to manage your invested assets (stocks, crypto currencies, ...).
- Show profit of every asset as well as the total profit.
- Show/hide a bought price line on the chart if the current selected ticker is on your portfolio.
CAPM Calculator [TrendX_]CAPM calculator is a powerful tool that helps find the cost of equity, which is the minimum return that shareholders require to invest in a company.
With the CAPM calculator, you can assess how well your trading strategy performs compared to the market. The goal of your strategy is to earn higher returns than what you would get by investing in the market with the same level of risk. This is called the risk-adjusted cost of capital, and it represents the minimum return that you should accept for your investment.
USAGE
A simple way to measure this is to compare the Compound annual growth rate (CAGR) of the trading strategy with the “Compound CAPM”, which is the CAGR of investing in the market with the same beta as the strategy.
If the trading strategy has a higher CAGR than the “Compound CAPM”, it means that it has outperformed the market on a risk-adjusted basis.
This is a sign of an effective trading strategy.
DISCLAIMER
The results achieved in the past are not all reliable sources of what will happen in the future. There are many factors and uncertainties that can affect the outcome of any endeavor, and no one can guarantee or predict with certainty what will occur.
Therefore, you should always exercise caution and judgment when making decisions based on past performance.
Anchored Chandelier ExitThe Chandelier Exit is a popular tool among traders used to help determine appropriate stop loss levels. Originally developed by Chuck LeBeau, the Chandelier Exit takes into account market volatility and adjusts the stop loss level dynamically. This indicator builds upon the original Chandelier Exit by allowing the trader to select an anchor date or starting point for the indicator to begin calculating from.
The Original Chandelier Exit
Before we get into the details of the Anchored Chandelier Exit, let's review the original. Essentially a dynamic ATR stop loss, the Chandelier Exit provides a trailing stop that moves higher or lower based on volatility.
The Chandelier Exit is calculated based on the following criteria:
🔶ATR - The ATR is used to measure the volatility of a security over a lookback period. The ATR length determines the number of bars to consider when calculating the average true range. The shorter the length, the more responsive the level will be.
🔶ATR Multiplier - The default multiplier is set to 3. This is used to determine the sensitivity of the Chandelier Exit. The higher the ATR multiplier the wider the stop levels will be. A lower multiplier will tighten stop levels.
🔶Highest / Lowest Points - Determine the highest high (bullish trade) or lowest low (bearish trade) during the lookback period. The default length is 22 bars.
Calculating the Chandelier Exit
Bullish trades - Highest High - ATR * Multiplier
Bearish trades - Lowest Low + ATR * Multiplier
The Anchored Chandelier Exit
The Anchored Chandelier Exit is a new twist on the original, allowing traders to adapt their stop loss levels based on specific market events, levels or bars.
Similar to the original, traders can select the ATR length and multiplier, however, the high or low from which the ATR is subtracted or added is first determined at the anchor bar.
As new bars form, the indicator checks for the previous high/low to be breached. If the high or low is exceeded, the highest/lowest point is updated and the Chandelier Exit is recalculated.
When the indicator is first loaded to your chart, it will ask you to select an anchor bar and choose the bias for the trade.
A bullish (long) bias trade will plot the Chandelier Exit below price action, while a bearish (short) bias trade will plot the Chandelier Exit above price action.
Indicator Features
🔶Custom Start Date
🔶Bullish or Bearish Bias
🔶Selectable ATR Length & Multiplier
🔶Custom Colors
🔶Exit With Close or Wicks
🔶Exit Alerts
With careful parameter optimization, the Anchored Chandelier Exit can be a useful tool for helping traders manage risk based on market volatility.
Ceres Trader Position and Risk Management ToolNOTE: It won't properly scale until you enter an entry point that is located on the chart. It's a feature not a bug. After that, you will see the entry, s/l, and target price lines properly displayed on the chart.
The "Ceres Trader Position and Risk Management Tool" is a comprehensive indicator designed for TradingView, meticulously crafted for traders who prioritize effective risk management and clear position visualization. This tool seamlessly integrates with your trading strategy, providing crucial information about your trades directly on your chart.
Key Features:
Position Type Visualization: Displays long or short positions with distinct color-coded lines and boxes for easy recognition.
Entry, Stop Loss, and Target Levels: Visual markers for entry price, stop loss, and target price, enabling you to track your trade setup at a glance.
Risk Assessment: Calculates and displays the amount at risk based on the stop loss distance and the percentage of risk capital.
Profit Potential: Shows the potential profit in dollar terms if the target is reached, helping you understand the reward prospects of your trade.
Reward to Risk Ratio: Indicates the ratio of potential reward to risk, an essential metric for evaluating the efficiency of your trade setup.
Current P&L Tracking: Continuously updates the open profit and loss based on the current market price, giving you real-time insight into your trade's performance.
Customizable Risk and Reward Boxes: Allows personalization of the risk and reward zones with color options, enhancing chart clarity and visual appeal.
How to Use:
Setting Up Your Trade:
Input your trade details including position type (long or short), entry price, risk capital, risk percentage, reward-risk ratio, and stop loss distance.
Visualize Your Trade:
The tool will automatically plot the entry, stop loss, and target prices on the chart.
Risk and reward areas will be highlighted with customizable color boxes.
Monitor Your Risk and Reward:
View the amount risked and potential profit in dollar terms directly on the chart.
Keep track of the reward to risk ratio to assess trade efficiency.
Stay Informed of Real-time Performance:
The current P&L of your open position will be updated in real-time, helping you make informed decisions.
This tool is ideal for traders who follow disciplined risk management practices and want to keep essential trade information easily accessible. With the "Ceres Trader Position and Risk Management Tool," you are equipped to make strategic trading decisions backed by clear visual cues and critical data.
Capital Accumulation Plan (CAP) Simulator 2.0Description:
This indicator serves as a simulation tool for the Capital Accumulation Plan (CAP). The CAP is an investment strategy involving regular contributions of a fixed amount at consistent intervals, regardless of market fluctuations. This simulator allows you to visualize how your invested capital might grow over time, considering a fixed monthly investment in a given financial instrument.
How to Use:
Customize the monthly investment amount, the day of the month for the investment, and the simulation period. Also, input the percentage of taxation on potential dividends and the Total Expense Ratio (TER) of the financial instrument. The indicator calculates the portfolio value over time, the invested capital, and the average cost. If applicable, it also calculates the dividend amounts over time and the corresponding taxes to be paid.
The indicator displays how these metrics would change over time following the PAC strategy.
Important Notes:
Apply exclusively to the daily chart; a fix for the chosen day absence will be implemented shortly.
EntryPrice Gain&Loss IndicatorThis indicator takes (1) an entry price or average position price and (2) position size (denominator) to calculate current gain or loss and returns those as well as the position change in percent. It will also draw into the Chart and show relevant data in a table.
It is mainly supposed to help tracking an (average) spot position easily.
It is recommended to switch it to invisible when switching to other charts.
You can also use several instances of the indicator to track your positions in different assets.
Features:
- table position and text size can be adjusted
- colors can be changed
(recommending 25% opacity for plot backgrounds)
- several instances possible
(recommended to tuen indicator invisible when switching to other charts or analyzing
Version 1.0
Trailing stopHi all!
This script helps to alert you when a trailing stop is hit. More specifically it alerts you when the low of the candle crosses below your trailing stop. A trailing stop follows a price positive movements. It raises your stop when price goes up, but keeps it at the same level if price goes down, so it "locks" in your profit. You define your long entry bar and choose one of the following methods for the stop:
ATR
The Average True Range (ATR) is popular to trail stops. The trailing stop is raised by the low minus the ATR (times a factor that can be set under the settings for ATR).
EMA
The Exponential Moving Average (EMA) can be used to trail your stop. When the low goes below the EMA an alert is sent about the stop. Its length can be set in the settings.
SMA
The Simple Moving Average (SMA) can be used to trail your stop. When the low goes below the SMA an alert is sent about the stop. Its length can be set in the settings.
Source
An external source can be useful as a stop signal. You can use this option that will stop you out when the signal returns anything else than "na". E.g. if you want a stop when KivancOzbilgic script "SuperTrend" () turns red, you set the source to "Supertrend: Down Trend". This option will not draw pretty things on the chart, but it will alert you!
Please note that this is for long entries only.
Best of trading luck!
Dividend Calendar (Zeiierman)█ Overview
The Dividend Calendar is a financial tool designed for investors and analysts in the stock market. Its primary function is to provide a schedule of expected dividend payouts from various companies.
Dividends, which are portions of a company's earnings distributed to shareholders, represent a return on their investment. This calendar is particularly crucial for investors who prioritize dividend income, as it enables them to plan and manage their investment strategies with greater effectiveness. By offering a comprehensive overview of when dividends are due, the Dividend Calendar aids in informed decision-making, allowing investors to time their purchases and sales of stocks to optimize their dividend income. Additionally, it can be a valuable tool for forecasting cash flow and assessing the financial health and dividend-paying consistency of different companies.
█ How to Use
Dividend Yield Analysis:
By tracking dividend growth and payouts, traders can identify stocks with attractive dividend yields. This is particularly useful for income-focused investors who prioritize steady cash flow from their investments.
Income Planning:
For those relying on dividends as a source of income, the calendar helps in forecasting income.
Trend Identification:
Analyzing the growth rates of dividends helps in identifying long-term trends in a company's financial health. Consistently increasing dividends can be a sign of a company's strong financial position, while decreasing dividends might signal potential issues.
Portfolio Diversification:
The tool can assist in diversifying a portfolio by identifying a range of dividend-paying stocks across different sectors. This can help mitigate risk as different sectors may react differently to market conditions.
Timing Investments:
For those who follow a dividend capture strategy, this indicator can be invaluable. It can help in timing the buying and selling of stocks around their ex-dividend dates to maximize dividend income.
█ How it Works
This script is a comprehensive tool for tracking and analyzing stock dividend data. It calculates growth rates, monthly and yearly totals, and allows for custom date handling. Structured to be visually informative, it provides tables and alerts for the easy monitoring of dividend-paying stocks.
Data Retrieval and Estimation: It fetches dividend payout times and amounts for a list of stocks. The script also estimates future values based on historical data.
Growth Analysis: It calculates the average growth rate of dividend payments for each stock, providing insights into dividend consistency and growth over time.
Summation and Aggregation: The script sums up dividends on a monthly and yearly basis, allowing for a clear view of total payouts.
Customization and Alerts: Users can input custom months for dividend tracking. The script also generates alerts for upcoming or current dividend payouts.
Visualization: It produces various tables and visual representations, including full calendar views and income tables, to display the dividend data in an easily understandable format.
█ Settings
Overview:
Currency:
Description: This setting allows the user to specify the currency in which dividend values are displayed. By default, it's set to USD, but users can change it to their local currency.
Impact: Changing this value alters the currency denomination for all dividend values displayed by the script.
Ex-Date or Pay-Date:
Description: Users can select whether to show the Ex-dividend day or the Actual Payout day.
Impact: This changes the reference date for dividend data, affecting the timing of when dividends are shown as due or paid.
Estimate Forward:
Description: Enables traders to predict future dividends based on historical data.
Impact: When enabled, the script estimates future dividend payments, providing a forward-looking view of potential income.
Dividend Table Design:
Description: Choose between viewing the full dividend calendar, just the cumulative monthly dividend, or a summary view.
Impact: This alters the format and extent of the dividend data displayed, catering to different levels of detail a user might require.
Show Dividend Growth:
Description: Users can enable dividend growth tracking over a specified number of years.
Impact: When enabled, the script displays the growth rate of dividends over the selected number of years, providing insight into dividend trends.
Customize Stocks & User Inputs:
This setting allows users to customize the stocks they track, the number of shares they hold, the dividend payout amount, and the payout months.
Impact: Users can tailor the script to their specific portfolio, making the dividend data more relevant and personalized to their investments.
-----------------
Disclaimer
The information contained in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
THISMA btccorrelationDescription:
This is a tool designed for traders who want to analyze correlation between any traded crypto's price in USD and the price of Bitcoin in USD.
Key Features:
Adjustable Correlation Window: The script features an input parameter that allows traders to set the length of the correlation window, with a default value of 14. Lower if you want faster granularity.
Clear Visualization: The correlation coefficient is plotted in a distinct pane below the main trading chart.
Reference Lines for Interpretation: Horizontal reference lines are included at 0.5 (indicating weak positive correlation), -0.5 (indicating weak negative correlation), and 0 (indicating no correlation). These lines, color-coded in green, red, and gray respectively, assist traders in quickly interpreting the correlation coefficient's value.
Applications:
Market Insight: If you want to be able to monitor if you should enter a trade on an altcoin or if its better to stick to Bitcoin to avoid being double exposed.
Risk Management: Identifying the correlation can help in assessing and managing the systemic risk associated with market movements, especially in cryptocurrency markets where Bitcoin's influence is significant.
Scale Ability [TrendX_]Scale Ability indicator can indicate a company’s potential for future growth and profitability.
A scalable company is one that can increase its revenue and market share without increasing its costs proportionally, which can benefit from economies of scale. Therefore, the high-scale ability can generate more value for its shareholders - which is important for investment decisions.
Scale Ability indicator consists of 3 financial components:
Cash Flow from Investing Activities to Total Assets Ratio (CFIA / TA)
Net Income to Total Debt Ratio (NI / TD)
Earnings Before Interest, Taxes, Depreciation and Amortization to Equity Ratio (EBITDA / E)
These measures can help investors assess how efficiently and effectively a company uses its resources to generate revenue and profit.
Note:
This can be customizable between Fiscal Quarter (FQ) and Fiscal Year (Fy)
This is suitable for companies in fast-growing industries.
FUNCTION
CFIA / TA Ratio
A company with a net income to total debt of 9% could indicate that it is investing in its assets to keep up with the market demand and the technological changes which can create competitive advantages.
NI/ TD Ratio
A company with a net income to total debt of 9% could show that it is profitable and has a strong financial position, which can easily cover its debt payments.
EBITDA / E Ratio
A company with a net income to total debt of 14% illustrates that it is generating a high return on its equity.
USAGE
Scale index division:
> 43 : Excellent
32 - 43 : Good
12 - 31 : Above Average
= 11 : Average
8 - 10 : Below Average
5 - 7 : Poor
< 4 : Very Poor
DISCLAIMER
This is only a rough estimate, and the actual ratio may differ significantly depending on the stage of the business cycle and the company’s strategy, and the comparison of each company and its peers.
This indicator is not financial advice, it can only help traders make better decisions. There are many factors and uncertainties that can affect the outcome of any endeavor, and no one can guarantee or predict with certainty what will occur.
Therefore, one should always exercise caution and judgment when making decisions based on past performance.
Quantitative Risk Navigator [kikfraben]📊 Quantitative Risk Navigator - Your Financial Performance GPS
Navigate the complexities of financial markets with confidence using the Quantitative Risk Navigator. This indicator provides you with a comprehensive dashboard to assess and understand the risk and performance of your chosen asset.
📈 Key Features:
Alpha and Beta Analysis: Uncover the outperformance (Alpha) and risk exposure (Beta) of your asset compared to a selected benchmark. Know where your investment stands in the market.
Correlation Insights: Understand the relationship between your asset and its benchmark through a clear visualization of correlation trends over different time lengths.
Risk-Return Metrics: Evaluate risk and return simultaneously with Sharpe and Sortino ratios. Make informed decisions by assessing the reward-to-risk ratio of your investment.
Omega Ratio: Gain deeper insights into your asset's performance by analyzing the Omega Ratio, which highlights the distribution of positive and negative returns.
Customizable Visualization: Tailor your chart to focus on specific metrics and time frames. Choose which metrics to display, allowing you to concentrate on the aspects that matter most to you.
Interactive Metrics Table: A user-friendly metrics table provides a quick overview of key values, including average metrics, enabling you to grasp the financial health of your asset at a glance.
Color-Coded Clarity: The indicator employs color-coded visualizations, making it easy to identify bullish and bearish trends, helping you make rapid and informed decisions.
🛠️ How to Use:
Symbol Selection: Choose your base symbol and preferred data source for analysis.
Risk-Free Rate: Input your risk-free rate to fine-tune calculations.
Length Customization: Adjust the lengths for different metrics to align with your analysis preferences.
Whether you're a seasoned trader or just stepping into the financial world, the Quantitative Risk Navigator empowers you to make strategic decisions by providing a comprehensive view of your asset's risk and return profile. Stay in control of your investments with this powerful financial GPS.
🚀 Start Navigating Your Financial Journey Today!
Absolute Momentum (Time Series Momentum)Absolute momentum , also known as time series momentum , focuses on the trend of an asset's own past performance to predict its future performance. It involves analyzing an asset's own historical performance, rather than comparing it to other assets.
The strategy determines whether an asset's price is exhibiting an upward (positive momentum) or downward (negative momentum) trend by assessing the asset's return over a given period (standard look-back period: 12 months or approximately 250 trading days). Some studies recommend calculating momentum by deducting the corresponding Treasury bill rate from the measured performance.
Absolute Momentum Indicator
The Absolute Momentum Indicator displays the rolling 12-month performance (measured over 250 trading days) and plots it against a horizontal line representing 0%. If the indicator crosses above this line, it signifies positive absolute momentum, and conversely, crossing below indicates negative momentum. An additional, optional look-back period input field can be accessed through the settings.
Hint: This indicator is a simplified version, as some academic approaches measure absolute momentum by subtracting risk-free rates from the 12-month performance. However, even with higher rates, the values will still remain close to the 0% line.
Benefits of Absolute Momentum
Absolute momentum, which should not be confused with relative momentum or the momentum indicator, serves as a timing instrument for both individual assets and entire markets.
Gary Antonacci , a key contributor to the absolute momentum strategy (find study below), emphasizes its effectiveness in multi-asset portfolios and its importance in long-only investing. This is particularly evident in a) reducing downside volatility and b) mitigating behavioral biases.
Moskowitz, Ooi, and Pedersen document significant 'time series momentum' across various asset classes, including equity index, currency, commodity, and bond futures, in 58 liquid instruments (find study below). There's a notable persistence in returns ranging from one to 12 months, which tends to partially reverse over longer periods. This pattern aligns with sentiment theories suggesting initial under-reaction followed by delayed over-reaction.
Despite its surprising ease of implementation, the academic community has successfully measured the effects of absolute momentum across decades and in every major asset class, including stocks, bonds, commodities, and foreign exchange (FX).
Strategies for Implementing Absolute Momentum:
To Buy a Stock:
Select a Look-Back Period: Choose a historical period to analyze the stock's performance. A common period is 12 months, but this can vary based on your investment strategy.
Calculate Excess Return: Determine the stock's excess return over this period. You can also assume a risk-free rate of "0" to simplify the process.
Evaluate Momentum:
If the excess return is positive, it indicates positive absolute momentum. This suggests the stock is in an upward trend and could be a good buying opportunity.
If the excess return is negative, it suggests negative momentum, and you might want to delay buying.
Consider further conditions: Align your decision with broader market trends, economic indicators, or fundamental analysis, for additional context.
To Sell a Stock You Own:
Regularly Monitor Performance: Use the same look-back period as for buying (e.g., 12 months) to regularly assess the stock's performance.
Check for Negative Momentum: Calculate the excess return for the look-back period. Again, you can assume a risk-free rate of "0" to simplify the process. If the stock shows negative momentum, it might be time to consider selling.
Consider further conditions:Align your decision with broader market trends, economic indicators, or fundamental analysis, for additional context.
Important note: Note: Entering a position (i.e., buying) based on positive absolute momentum doesn't necessarily mean you must sell it if it later exhibits negative absolute momentum. You can initiate a position using positive absolute momentum as an entry indicator and then continue holding it based on other criteria, such as fundamental analysis.
General Tips:
Reassessment Frequency: Decide how often you will reassess the momentum (monthly, quarterly, etc.).
Remember, while absolute momentum provides a systematic approach, it's recommendable to consider it as part of a broader investment strategy that includes diversification, risk management, fundamental analysis, etc.
Relevant Capital Market Studies:
Antonacci, Gary. "Absolute momentum: A simple rule-based strategy and universal trend-following overlay." Available at SSRN 2244633 (2013)
Moskowitz, Tobias J., Yao Hua Ooi, and Lasse Heje Pedersen. "Time series momentum." Journal of financial economics 104.2 (2012): 228-250
Liquidations Meter [LuxAlgo]The Liquidation Meter aims to gauge the momentum of the bar, identify the strength of the bulls and bears, and more importantly identify probable exhaustion/reversals by measuring probable liquidations.
🔶 USAGE
This tool includes many features related to the concept of liquidation. The two core ones are the liquidation meter and liquidation price calculator, highlighted below.
🔹 Liquidation Meter
The liquidation meter presents liquidations on the price chart by measuring the highest leverage value of longs and shorts that have been potentially liquidated on the last chart bar, hence allowing traders to:
gauge the momentum of the bar.
identify the strength of the bulls and bears.
identify probable reversal/exhaustion points.
Liquidation of low-leveraged positions can be indicative of exhaustion.
🔹 Liquidation Price Calculator
A liquidation price calculator might come in handy when you need to calculate at what price level your leveraged position in Crypto, Forex, Stocks, or any other asset class gets liquidated to add a protective stop to mitigate risk. Monitoring an open position gets easier if the trader can calculate the total risk in order for them to choose the right amount of margin and leverage.
Liquidation price is the distance from the trader's entry price to the price where trader's leveraged position gets liquidated due to a loss. As the leverage is increased, the distance from trader's entry price to the liquidation price shrinks.
While you have one or several trades open you can quickly check their liquidation levels and determine which one of the trades is closest to their liquidation price.
If you are a day trader that uses leverage and you want to know which trade has the best outlook you can calculate the liquidation price to see which one of the trades looks best.
🔹 Dashboard
The bar statistics option enables measuring and presenting trading activity, volatility, and probable liquidations for the last chart bar.
🔶 DETAILS
It's important to note that liquidation price calculator tool uses a formula to calculate the liquidation price based on the entry price + leverage ratio.
Other factors such as leveraged fees, position size, and other interest payments have been excluded since they are variables that don’t directly affect the level of liquidation of a leveraged position.
The calculator also assumes that traders are using an isolated margin for one single position and does not take into consideration the additional margin they might have in their account.
🔹Liquidation price formula
the liquidation distance in percentage = 100 / leverage ratio
the liquidation distance in price = current asset price x the liquidation distance in percentage
the liquidation price (longs) = current asset price – the liquidation distance in price
the liquidation price (shorts) = current asset price + the liquidation distance in price
or simply
the liquidation price (longs) = entry price * (1 – 1 / leverage ratio)
the liquidation price (shorts) = entry price * (1 + 1 / leverage ratio)
Example:
Let’s say that you are trading a leverage ratio of 1:20. The first step is to calculate the distance to your liquidation point in percentage.
the liquidation distance in percentage = 100 / 20 = 5%
Now you know that your liquidation price is 5% away from your entry price. Let's calculate 5% below and above the entry price of the asset you are currently trading. As an example, we assume that you are trading bitcoin which is currently priced at $35000.
the liquidation distance in price = $35000 x 0.05 = $1750
Finally, calculate liquidation prices.
the liquidation price (longs) = $35000 – $1750 = $33250
the liquidation price (short) = $35000 + $1750 = $36750
In this example, short liquidation price is $36750 and long liquidation price is $33250.
🔹How leverage ratio affects the liquidation price
The entry price is the starting point of the calculation and it is from here that the liquidation price is calculated, where the leverage ratio has a direct impact on the liquidation price since the more you borrow the less “wiggle-room” your trade has.
An increase in leverage will subsequently reduce the distance to full liquidation. On the contrary, choosing a lower leverage ratio will give the position more room to move on.
🔶 SETTINGS
🔹Liquidations Meter
Base Price: The option where to set the reference/base price.
🔹Liquidation Price Calculator
Liquidation Price Calculator: Toggles the visibility of the calculator. Details and assumptions made during the calculations are stated in the tooltip of the option.
Entry Price: The option where to set the entry price, a value of 0 will use the current closing price. Details are given in the tooltip of the option.
Leverage: The option where to set the leverage value.
Show Calculated Liquidation Prices on the Chart: Toggles the visibility of the liquidation prices on the price chart.
🔹Dashboard
Show Bar Statistics: Toggles the visibility of the last bar statistics.
🔹Others
Liquidations Meter Text Size: Liquidations Meter text size.
Liquidations Meter Offset: Liquidations Meter offset.
Dashboard/Calculator Placement: Dashboard/calculator position on the chart.
Dashboard/Calculator Text Size: Dashboard text size.
🔶 RELATED SCRIPTS
Here are some of the scripts that are related to the liquidation and liquidity concept, for more and other conceptual scripts you are kindly invited to visit LuxAlgo-Scripts .
Liquidation-Levels
Liquidations-Real-Time
Buyside-Sellside-Liquidity
Cryptocurrency Cointegration Matrix (SpiritualHealer117)This indicator plots a cointegration matrix for the pairings of 100 cryptocurrencies. The matrix is populated with ADF t-stats (from an ADF-test with 1 lag). An ADF-test (Augmented Dickey-Fuller test) tests the null hypothesis that an AR process has a unit root. If rejected, the alternative hypothesis is usually that the AR process is either stationary or trend-stationary. This model extends upon Lejmer's Cointegration Matrix for forex by enabling the indicator to use cryptocurrency pairs and allows for significantly more pairs to be analyzed using the group selection feature. This indicator arose from collaboration with TradingView user CryptoJuju.
This indicator runs an ADF-test on the residuals (spread) of each pairing (i.e. a cointegration test). It tests if there is a unit root in the spread between the two assets of a pairing. If there is a unit root in the spread, it means the spread varies randomly over time, and any mean reversion in the spread is very hard to predict. By contrast, if a unit root does not exist, the spread (distance between the assets) should remain more or less constant over time, or rise/fall in close to the same rate over time. The more negative the number from an ADF-test, the stronger the rejection of the idea that the spread has a unit root. In statistics, there are different levels which correspond with the confidence level of the test. For this indicator, -3.238 equals a confidence level of 90%, -3.589 equals a confidence level of 95% and -4.375 equals a confidence level of 99% that there is not a unit root. So the colors are based on the confidence level of the test statistic (the t-stat, i.e. the number of the pairing in the matrix). So if the number is greater than -3.238 it is green, if it's between -3.238 and -3.589 it's yellow, if it's between -3.589 and -4.375 it's orange, and if its lower than -4.375 it's red.
There are multiple ways to interpret the results. A strong rejection of the presence of a unit root (i.e. a value of -4.375 or below) is not a guarantee that there is no unit root, or that any of the two alternative hypotheses (that the spread is stationary or trend-stationary) are correct. It only means that in 99% of the cases, if the spread is an AR process, the test is right, and there is no unit root in the spread. Therefore, the results of this test is no guarantee that the result proves one of the alternative solutions. Green therefore means that a unit root cannot be ruled out (which can be interpreted as "the two cryptocurrencies probably don't move together over time"), and red means that a unit root is likely not present (which can be interpreted as "the two cryptocurrencies may move together over time").
One possible way to use this indicator is to make sure you don't trade two pairs that move together at the same time. So basically the idea is that if you already have a trade open in one of the currency pairs of the pairing, only enter a trade in the other currency pair of that pairing if the color is green, or you may be doubling your risk. Alternatively, you could implement this indicator into a pairs trading system, such as a simple strategy where you buy the spread between two cryptocurrencies with a red result when the spread's value drops one standard deviation away from its moving average, and conversely sell when it moves up one standard deviation above the moving average. However, this strategy is not guaranteed to work, since historical data does not guarantee the future.
Specific to this indicator, there are 100 different cryptocurrency tickers which are included in the matrix, and the cointegration matrices between all the tickers can be checked by switching asset group 1 and asset group 2 to different asset groups. The ADF test is computed using a specified length, and if there is insufficient data for the length, the test produces a grayed out box.
NOTE: The indicator can take a while to load since it computes the value of 400 ADF tests each time it is run.
Leading Industry [TrendX__]Leading Industry indicator functions like an Industry-meter, a tool that measures the strength of different industries in a country or region.
It consists of the fields of Technology, Finance, Industrial, Energy, Real-estate, and Construction.
USAGE
The Industry-meter indicates which industry is the strongest by using an arrow that points to the field with the highest score.
The default fields are set for Vietnam’s industry, but the user can customize them according to their preferences and needs.
The Industry-meter is a useful way to visualize the economic landscape and identify the opportunities and challenges in various sectors.
DISCLAIMER
This indicator is not financial advice, it can only help traders make better decisions. There are many factors and uncertainties that can affect the outcome of any endeavor, and no one can guarantee or predict with certainty what will occur.
Therefore, one should always exercise caution and judgment when making decisions based on past performance.
