The Golden Transform Oscillator contains multiple technical indicators and conditions for making buy and sell decisions. Here's a breakdown of its components and what it's trying to achieve:
Strategy Setup:
The GT is designed to be plotted on the chart without overlaying other indicators.
Rate of Change (ROC) Calculation:
The Rate of Change (ROC) indicator is calculated with a specified period ("Rate of Change Length"). The ROC measures the percentage change in price over the specified period.
Hull Modified TRIX Calculation:
The Hull Modified TRIX indicator is calculated with a specified period ("Hull TRIX Length"). The Hull MA (Moving Average) formula, a modified WMA, is used to calculate a modified TRIX indicator, which is a momentum oscillator.
Hull MA Calculation:
A Hull Moving Average (Hull MA) is calculated as an entry filter.
Fisher Transform Calculation:
The Fisher Transform indicator is calculated to serve as a preemptive exit filter. It involves mathematical transformations of price data to create an oscillator that can help identify potential reversals. The Fisher Transform is further smoothed using a Hull Moving Average (HMA).
Conditions and Signals:
Long conditions are determined based on crossovers between ROC and TRIX, as well as price relative the the MA. Short conditions are inversed.
Exit Conditions:
Exit conditions are defined for both long and short positions. For long positions, the strategy exits if ROC crosses under TRIX, or if the smoothed Fisher Transform crosses above a threshold and declines. Once again, short conditions are the inverse.
Visualization and Plotting:
The script uses background colors for entry and shapes for exits to highlight different levels and conditions for the ROC/TRIX correlation. It plots the Fisher Transform values and a lag trigger on the chart.
Overall, this script is a complex algorithm that combines multiple technical indicators and conditions to generate trading signals and manage positions in the financial markets. It aims to identify potential entry and exit points based on the interplay of the mentioned indicators and conditions.