What up guys and welcome to the CoffeeShop. This is your host and "baristo", Eric. This is a simple little set of 3 moving averages. Smoothed moving averages that you can use in the 10 /28 strategy, or any other strategy you choose. Among themselves there is nothing special about these moving averages, but because of their settings they will help you find entries for long and short positions and for divergence trading. These moving averages have conditional colors built into the code, using the pinescript "color from gradient" feature.
All three moving averages, are green when they are all lined up in a bullish form. All three are red when they're all lined up in a bearish form. And they are colored Gray when price action and the moving averages are mixed up in any way. But this is not enough to help you determine whether you have a true trend or not also it is not enough to tell you whether you have a strong or weak trend so there's more.
Add to this color command, the candles are colored ONLY when there is a true uptrend or downtrend. If you believe for any reason that price action is telling you this is going to a a short term trend, you can wait for your long or short color confirmations and then drop down to a lower timeframe to make your trades.
STRONG TREND: for a strong uptrend you would look for the candles to close bullish above all three green moving averages that were already lined up. This would be a strong uptrend. If price action closed below all three downward lined up moving averages they were all red and your candle is red then you have a strong downtrend.
Week Trend However if your candle closes bearish and it closes red below a mixed set of moving averages then you have a week downtrend. The same applies if you have a bullish closing candle but your fast and medium moving average are facing up however they are below your slow moving average. You may have a green line up however if you're moving averages are mixed up then you have a weak trend.
Summary In short a strong trend is when you close above or below moving averages that are lined up in the same direction and they are not mixed in any way. A weak trend is when you close above or below your fast and medium moving averages as they're lined up in that same direction however they are on the wrong side of your third moving average.
When you have a weak trend you should be scalping and when you have a strong trend you should be able to ride that trend more appropriately.
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newly defined color inputs to show when price itself is ranging aside from moving averages getting mixed up. Now you can see when price action re-enters ranging moving average and price itelsef loses trend. You can also see when you break away from moving averages with price, does your closing candle maintain its momentum.
Color inputs: Trending Color = The color you want to use for your candles to show you have price action trending.
NON-Trending Color = The color you want to use for your candles to show you do not have a good trend of price movement.
This color coding system now uses the "color from gradient" feature known in pinescript to help determine the strength of the trend. The Strength is determined by a combination of Choppyness Index, the value of the RSI, and an ATR value * 1
CREDITS: The Choppiness Index was created by Australian commodity trader E.W. Dreiss. Who created an indicator that is designed to determine if the market is choppy (trading sideways) or not choppy (trading within a trend in either direction). The Choppiness Index is an example of an indicator that is not directional at all. CHOP is not meant to predict future market direction, it is a metric to be used to for defining the market's trendiness only. A basic understanding of the indicator would be; higher values equal more choppiness, while lower values indicate directional trending.
THE ATR: J. Welles Wilder created the ATR and featured it in his book New Concepts in Technical Trading Systems
Most important factors of trading are trend, price action, and volume!!! You’ve come up with genius indicators that supply all of these things. I still use the algo, bull bear power void, and now the caffeine crush ( which is the true market killer ) everyday!!! Keep it up Eric!!!! You’re gifted and thank you for sharing your gift with the rest of us!!!
CoffeeshopCrypto
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@cjg1977, yea that caffeine crush is awesome isnt it?
scorpion1881
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THanks Eric awesome
cjg1977
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Indeed it is Eric. My name is Chris< by the way. Now that I've properly introduced myself, thank you for posting that video on youtube yesterday about volume. i completely forgot to match the settings on the bull bear power void, and now that I did results are even more impressive... I'm very much looking forward to the release of the massfx! I just wanted to say, keep up the great work my friend!!!
CoffeeshopCrypto
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@cjg1977, THanks Chris. ALways love to hear my teachings are working for you guys
cjg1977
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@CoffeeshopCrypto, Indeed it is. Eric, I'm sorry for sounding so pushy with the massfx. You've given all anyone needs already to be a successful trader. The heikin ashi algo w/, the bull bear power void and, caffeine crush is ALL you need.... I do like SMC but other peoples indicators give me the feeling that they're off and cause traders to incur losses... Take you're time and release it when you feel it's ready. Looking forward to it bro!!!
CoffeeshopCrypto
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@cjg1977, Chris thanks very much for saying that and to be honest with you I have studied many SMC indicators from many people and I'm very unhappy with every single one of them. I find them to be glorified pivot indicators which really serves no purpose. Support and resistance levels are not based on pivots. Those are just markers that you need to get through or get to but they have nothing to do with actual liquidity fair value gaps or support resistance trend lines or anything they are simply points where price has moved away from. And who really cares about that so yes the indicator that I'm creating for smart money concepts truly draws out liquidity on your chart in real time as well as support and resistance and it will work with settings that you can put in confluence with other indicators that you use. So it like the other indicators that I create will be very versatile and not a one-size-fits-all because you won't be able to use it only with one type of trading but you will be able to use it with all types of tradings you just need to adjust the settings to your liking and I'll be able to give you guys some insight on how to do that
@CoffeeshopCrypto, I agree fully with you… can‘t work with all these SMC indicators… still wait for your solution… I always have a better feeling if you code it … thx again for your effort… greeting Rudi
jubin56
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Love the script, is there a way to add an option to what kind of MA we want to use?