Shark Harmonic Pattern [TradingFinder] Shark Detector Indicator🔵 Introduction
The Shark harmonic pattern, first introduced by Scott Carney in 2011, is a recognized tool in technical analysis. Since its inception, it has been widely adopted by traders as an essential market analysis tool.
Due to its complexity, the Shark pattern can be challenging for novice traders. Therefore, we have developed the Harmonic Pattern Indicator to help analysts and traders easily identify these patterns.
🟣 Understanding the Types of Shark Pattern
In technical analysis, the Shark harmonic pattern forms at the end of trends and is categorized into two types: Bullish and Bearish Shark Patterns.
Bullish Shark Pattern : This pattern appears at the end of a downtrend, indicating a potential reversal to an uptrend. Traders can use this pattern to identify buy entry points. The image below illustrates the core components of the Bullish Shark Pattern.
Bearish Shark Pattern : Conversely, the Bearish Shark Pattern forms at the end of an uptrend, signaling a possible reversal to a downtrend. This pattern prompts traders to shift their positions from buying to selling. The image below showcases the characteristics of the Bearish Shark Pattern.
🔵 How to Use
🟣 Trading with the Bullish Shark Pattern
The Bullish Shark Pattern acts as a reversal pattern, helping traders identify the end of a downtrend and the beginning of an uptrend. It consists of five key points that indicate alternating bullish and bearish movements.
Upon the complete formation of this pattern, traders can look for opportunities to enter buy trades. To manage risk effectively, it is advisable to set a stop-loss below the lowest price point within the pattern.
🟣 Trading with the Bearish Shark Pattern
Similarly, the Bearish Shark Pattern functions as a reversal pattern but in the opposite direction. It helps traders identify the end of an uptrend and the onset of a downtrend.
After the pattern fully forms, traders can seek sell entry opportunities. As with the bullish pattern, placing a stop-loss above the highest price point within the pattern is recommended for risk management.
🔵 Setting
🟣 Logical Setting
ZigZag Pivot Period : You can adjust the period so that the harmonic patterns are adjusted according to the pivot period you want. This factor is the most important parameter in pattern recognition.
Show Valid Format : If this parameter is on "On" mode, only patterns will be displayed that they have exact format and no noise can be seen in them. If "Off" is, the patterns displayed that maybe are noisy and do not exactly correspond to the original pattern.
Show Formation Last Pivot Confirm : if Turned on, you can see this ability of patterns when their last pivot is formed. If this feature is off, it will see the patterns as soon as they are formed. The advantage of this option being clear is less formation of fielded patterns, and it is accompanied by the latest pattern seeing and a sharp reduction in reward to risk.
Period of Formation Last Pivot : Using this parameter you can determine that the last pivot is based on Pivot period.
🟣 Genaral Setting
Show : Enter "On" to display the template and "Off" to not display the template.
Color : Enter the desired color to draw the pattern in this parameter.
LineWidth : You can enter the number 1 or numbers higher than one to adjust the thickness of the drawing lines. This number must be an integer and increases with increasing thickness.
LabelSize : You can adjust the size of the labels by using the "size.auto", "size.tiny", "size.smal", "size.normal", "size.large" or "size.huge" entries.
🟣 Alert Setting
Alert : On / Off
Message Frequency : This string parameter defines the announcement frequency. Choices include: "All" (activates the alert every time the function is called), "Once Per Bar" (activates the alert only on the first call within the bar), and "Once Per Bar Close" (the alert is activated only by a call at the last script execution of the real-time bar upon closing). The default setting is "Once per Bar".
Show Alert Time by Time Zone : The date, hour, and minute you receive in alert messages can be based on any time zone you choose. For example, if you want New York time, you should enter "UTC-4". This input is set to the time zone "UTC" by default.
🔵 Conclusion
The Shark harmonic pattern is a potent analytical tool in technical analysis that aids traders in identifying critical reversal points in financial markets. Whether in a bullish or bearish context, this pattern provides clear trend change signals, allowing traders to enter trades with greater precision and optimize their strategies.
However, as with all analytical methods, it is essential to supplement the Shark pattern with additional analyses and strict risk management to avoid potential losses. Incorporating this pattern into a comprehensive trading strategy can lead to better trade outcomes and more opportunities for success
חפש סקריפטים עבור "technical"
[1] Dynamic Support and Resistance with breakout [Dr Future]This script appears to be designed to identify and visualize dynamic support and resistance levels on a price chart, along with potential breakout signals.
Key Components & Functionality (Inferred):
Dynamic Support and Resistance: The script likely employs algorithms to calculate and plot support and resistance levels that adjust in real-time as price action evolves.
Breakout Detection: The script probably incorporates logic to recognize when the price breaks out of these dynamic support or resistance zones. This could trigger alerts or visual cues on the chart.
Dr Future's Approach: It's worth noting the " " tag, suggesting the script might be based on specific methodologies or insights associated with a trader or analyst known as "Dr Future." Without more context on their strategies, it's difficult to pinpoint the exact techniques used.
Potential Benefits:
Adaptive Levels: Dynamic support and resistance can offer a more responsive approach compared to static levels, as they account for changing market conditions.
Breakout Opportunities: Identifying breakouts can help traders spot potential entry or exit points.
Visual Clarity: Plotting these levels directly on the chart can provide a clearer picture of the current market structure and potential turning points.
Caveats:
False Signals: Like any technical tool, dynamic support and resistance can generate false signals. Breakouts might not always lead to sustained trends.
Parameter Sensitivity: The script's effectiveness likely depends on how its parameters are configured. Fine-tuning might be required to suit different markets or timeframes.
"Dr Future" Factor: The script's performance could be tied to the specific strategies of "Dr Future," which might not be universally applicable.
Important Note:
Without access to the actual code and a deeper understanding of "Dr Future's" methods, this description is based on inference and general knowledge of technical analysis.
Recommendation:
If you're considering using this script, it would be prudent to:
Backtest Thoroughly: Test the script on historical data to assess its performance and identify potential pitfalls.
Understand the Parameters: Familiarize yourself with the script's settings and how they impact the plotted levels and breakout signals.
Combine with Other Tools: Use this script in conjunction with other technical indicators and risk management strategies for a more holistic trading approach.
False Breakouts [TradingFinder] Fake Breakouts Failure🔵 Introduction
Technical indicators are essential tools for analysts and traders in financial markets, helping them predict price movements and make better trading decisions. One of the key concepts in technical analysis that should be carefully considered is the "False Breakout."
This phenomenon occurs when a price temporarily breaks through a significant support or resistance level but fails to hold and quickly returns to its previous range. Understanding this concept and applying it in trading can reduce risks and increase profitability.
🟣 What is a False Breakout?
A Fake Breakout, as the name suggests, refers to a breakout that appears to occur but fails to sustain, leading the price to quickly revert back to its previous range. This situation often happens when inexperienced or non-professional traders, under psychological pressure and eager to enter the market quickly, initiate trades.
This creates opportunities for professional traders to take advantage of these short-term fluctuations and execute successful trades.
🟣 The Importance of Recognizing False Breakouts
Recognizing False Breakouts is crucial for any trader aiming for success in financial markets. False Breakouts typically occur when the market approaches a critical support or resistance level.
In these situations, many traders are waiting to see if the price will break through this level. However, when the price quickly returns to its previous range, it indicates weakness in the movement and the inability to sustain the breakout.
🟣 How to identify False Breakouts?
To identify Fake Breakouts, it is important to carefully analyze price charts and look for signs of a quick price reversal after breaking a key level.
Here are some chart patterns that may help you identify a False Breakout :
1. Pin Bar Pattern : The Pin Bar is a candlestick pattern that indicates a price reversal. This pattern usually appears near support and resistance levels, showing that the price attempted to break through a key level but failed and reversed.
2. Fakey Pattern : This pattern, which consists of several candlesticks, indicates a False Breakout and a quick price return to the previous range. It usually appears near key levels and can signal a trend reversal.
3. Using Multiple Timeframes : One way to identify False Breakouts is by using charts of different timeframes. Sometimes, a breakout on a one-hour chart may be a False Breakout on a daily chart. Analyzing charts across multiple timeframes can help you accurately identify this phenomenon.
🔵 How to Use
Once you identify a False Breakout, you can use it as a trading signal. For this, it is best to look for trading opportunities in the opposite direction of the False Breakout. In other words, if a False Breakout occurs at a resistance level, you might consider selling opportunities, and if it happens at a support level, you might look for buying opportunities.
Here are some key points for trading based on False Breakouts :
1. Patience and Discipline : Patience and discipline are crucial when trading with False Breakouts. Wait for the False Breakout to clearly form before entering a trade.
2. Use Stop Loss : Setting an appropriate stop loss is vital when trading based on False Breakouts. Typically, the stop loss can be placed near the level where the False Breakout occurred.
3. Seek Confirmations : Before entering a trade, look for additional confirmations. These can include other analyses or technical indicators that show the price is likely to return to its previous level.
🔵 Settings
🟣 Logical settings
Swing period : You can set the swing detection period.
Max Swing Back Method : It is in two modes "All" and "Custom". If it is in "All" mode, it will check all swings, and if it is in "Custom" mode, it will check the swings to the extent you determine.
Max Swing Bac k: You can set the number of swings that will go back for checking.
🟣 Display settings
Displaying or not displaying swings and setting the color of labels and lines.
🟣 Alert Settings
Alert False Breakout : Enables alerts for Breakout.
Message Frequency : Determines the frequency of alerts. Options include 'All' (every function call), 'Once Per Bar' (first call within the bar), and 'Once Per Bar Close' (final script execution of the real-time bar). Default is 'Once per Bar'.
Show Alert Time by Time Zone : Configures the time zone for alert messages. Default is 'UTC'.
🔵Conclusion
False Breakouts, as a key concept in technical analysis, are powerful tools for identifying sudden price changes and using them in trading. Understanding this phenomenon and applying it can help traders perform better in financial markets and avoid potential losses.
To benefit from False Breakouts, traders need to carefully analyze charts and use the appropriate analytical tools. By leveraging this strategy, traders can achieve lower-risk and higher-reward trades.
ChartArt-Bankniftybuying5minName: ChartArt-BankNifty Buying Strategy (5-Minute)
Timeframe: 5-Minute Candles
Asset: BankNifty (Indian Stock Market Index)
Trading Hours: 9:30 AM - 2:45 PM IST (Indian Standard Time)
This strategy is designed for BankNifty intraday traders who want to capitalize on short-term price movements within a defined trading window. It combines technical indicators like Simple Moving Averages (SMA), Relative Strength Index (RSI), and candlestick patterns to identify potential buy signals during intraday downtrends. The strategy employs specific entry, stop-loss, and target conditions to manage trades effectively and minimize risk.
Technical Indicators Used
Simple Moving Averages (SMA):
EMA7: 7-period SMA on closing price.
EMA5: 5-period SMA on closing price.
Purpose: Used to identify the intraday trend by comparing short-term moving averages. The strategy focuses on situations where the market is in a minor downtrend, indicated by EMA5 being below EMA7.
Relative Strength Index (RSI):
RSI14: 14-period RSI, a momentum oscillator that measures the speed and change of price movements.
SMA14: 14-period SMA of the RSI.
Purpose: RSI is used to identify potential reversal points. The strategy looks for situations where the RSI is below its own moving average, suggesting weakening momentum in the downtrend.
Candlestick Patterns:
Relaxed Hammer or Doji (2nd Candle): A pattern where the second candle in a 3-candle sequence shows a potential reversal signal (Hammer or Doji), indicating indecision or a potential turning point.
Bearish 1st Candle: The first candle is bearish, setting up the context for a potential reversal.
Bullish 3rd Candle: The third candle must be bullish with specific characteristics (closing near the high, surpassing the previous high), confirming the reversal.
Strategy Conditions
Time Condition:
The strategy is only active during specific hours (9:30 AM to 2:45 PM IST). This ensures that trades are only taken during the most liquid hours of the trading day, avoiding potential volatility or lack of liquidity towards market close.
Intraday Downtrend Condition:
EMA5 < EMA7: Indicates that the market is in a minor downtrend. The strategy looks for reversal opportunities within this trend.
RSI Condition:
RSI14 <= SMA14: Indicates that the current RSI value is below its 14-period SMA, suggesting potential weakening momentum, which can precede a reversal.
Candlestick Patterns:
1st Candle: Must be bearish, setting up the context for a potential reversal.
2nd Candle: Must either be a Hammer or Doji, indicating a potential reversal pattern.
3rd Candle: Must be bullish, with specific characteristics (closing near the high, breaking the previous high, etc.), confirming the reversal.
RSI Crossover Condition:
A crossover of the RSI over its SMA in the last 5 periods is also checked, adding further confirmation to the reversal signal.
Entry and Exit Rules
Entry Signal:
A buy signal is generated when all the conditions (time, intraday downtrend, bearish 1st candle, hammer/doji 2nd candle, bullish 3rd candle, and RSI condition) are met. The trade is entered at the high of the bullish third candle.
Stop Loss:
The stop loss is calculated based on the difference between the entry price and the low of the second candle. If this difference is greater than 90 points, the stop loss is placed at the midpoint of the second candle's range (average of high and low). Otherwise, it is placed at the low of the second candle.
Target 1:
The first target is set at 1.8 times the difference between the entry price and the stop loss. When this target is hit, half of the position is exited to lock in partial profits.
Target 2:
The second target is set at 3 times the difference between the entry price and the stop loss. The remaining position is exited at this point, or if the price hits the stop loss.
Originality and Usefulness
This strategy is original in its combination of multiple technical indicators and candlestick patterns to identify potential reversals in a specific intraday timeframe. By focusing on minor downtrends and utilizing a 3-candle reversal pattern, the strategy seeks to capture quick price movements with a structured approach to risk management.
Key Benefits:
High Precision: The strategy’s multi-step filtering process (time condition, trend confirmation, candlestick pattern analysis, and momentum evaluation via RSI) increases the likelihood of accurate trade signals.
Risk Management: The use of a dynamic stop-loss based on candle characteristics, combined with partial profit-taking, allows traders to lock in profits while still giving the trade room to develop further.
Structured Approach: The strategy provides a clear, rule-based system for entering and exiting trades, which can help remove emotional decision-making from the trading process.
Charts and Signals
The strategy produces signals in the form of labels on the chart:
Buy Signal: A green label is plotted below the candle that meets all entry conditions, indicating a potential buy opportunity.
Stop Loss (SL): A red dashed line is drawn at the stop-loss level with a label indicating "SL".
Target 1 (1st TG): A blue dashed line is drawn at the first target level with a label indicating "1st TG".
Target 2 (2nd TG): Another blue dashed line is drawn at the second target level with a label indicating "2nd TG".
These visual aids help traders quickly identify entry points, stop loss levels, and target levels on the chart, making the strategy easy to follow and implement.
Backtesting and Optimization
Backtesting: The strategy can be backtested on TradingView using historical data to evaluate its performance. Traders should consider testing across different market conditions to ensure the strategy's robustness.
Optimization: Parameters such as the RSI period, moving averages, and target multipliers can be optimized based on backtesting results to refine the strategy further.
Conclusion
The ChartArt-BankNifty Buying Strategy offers a well-rounded approach to intraday trading, focusing on capturing reversals in minor downtrends. With a strong emphasis on technical analysis, precise entry and exit rules, and robust risk management, this strategy provides a solid framework for traders looking to engage in intraday trading on BankNifty.
Hullinger Percentile Oscillator [AlgoAlpha]🚀 Introducing the Hullinger Percentile Oscillator by AlgoAlpha! 🚀
This versatile Pine Script™ indicator is designed to help you identify swing trends and potential reversals with precision. Whether you're looking to catch market swings or spot divergences, the Hullinger Percentile Oscillator offers a comprehensive suite of features to enhance your trading strategy.
Key Features
🎯 Customizable Hullinger Settings: Adjust the main length, source, and standard deviation multipliers to fine-tune the indicator to your preferred trading style.
🔄 Dynamic Oscillator Modes: Switch between "Swing" mode for trend identification and "Contrarian" mode for reversal spotting, adapting the indicator to your market view.
📉 Divergence Detection: The indicator includes parameters to control the sensitivity and confirmation of divergence signals, helping to filter out noise and highlight significant market moves.
🌈 Color-Coded Visuals: Easily distinguish between bullish and bearish signals with customizable color settings for a clear visual representation on your chart.
🔔 Alert Integration: Stay ahead of the market with built-in alerts for key conditions, including strong and weak reversals, as well as bullish and bearish swings.
Quick Guide to Using the Hullinger Percentile Oscillator
Maximize your trading edge with the Hullinger Percentile Oscillator by following these steps! 📈✨
🛠 Add the Indicator: Add the indicator to favorites by pressing the star icon ⭐. Customize settings like Main Length, Oscillator Mode, and Appearance to fit your trading needs.
📊 Market Analysis: Use "Swing" mode to track trends and "Contrarian" mode to spot reversals. Watch for divergence signals to catch potential trend changes.
🔔 Alerts: Set up alerts to be notified of significant market movements without constantly monitoring your chart.
How It Works
The Hullinger Percentile Oscillator calculates its signals by applying a modified standard deviation approach to the Hull Moving Average (HMA) of a selected price source. It creates both inner and outer bands based on different multipliers. The oscillator then measures the position of the price relative to these bands, smoothing the result for swing trend detection. Depending on the chosen mode, the oscillator either highlights swing trends or potential reversals. Divergences are detected by comparing recent pivot highs and lows in both price and the oscillator, allowing you to spot bullish or bearish divergence setups. Alerts are triggered based on key crossovers or when specific conditions are met, ensuring that you are always informed of crucial market developments.
Approximate Spectral Entropy-Based Market Momentum (SEMM)Overview
The Approximate Spectral Entropy-Based Market Momentum (SEMM) indicator combines the concepts of spectral entropy and traditional momentum to provide traders with insights into both the strength and the complexity of market movements. By measuring the randomness or predictability of price changes, SEMM helps traders understand whether the market is in a trending or consolidating state and how strong that trend or consolidation might be.
Key Features
Entropy Measurement: Calculates the approximate spectral entropy of price movements to quantify market randomness.
Momentum Analysis: Integrates entropy with rate-of-change (ROC) to highlight periods of strong or weak momentum.
Dynamic Market Insight: Provides a dual perspective on market behavior—both the trend strength and the underlying complexity.
Customizable Parameters: Adjustable window length for entropy calculation, allowing for fine-tuning to suit different market conditions.
Concepts Underlying the Calculations
The indicator utilizes Shannon entropy, a concept from information theory, to approximate the spectral entropy of price returns. Spectral entropy traditionally involves a Fourier Transform to analyze the frequency components of a signal, but due to Pine Script limitations, this indicator uses a simplified approach. It calculates log returns over a rolling window, normalizes them, and then computes the Shannon entropy. This entropy value represents the level of disorder or complexity in the market, which is then multiplied by traditional momentum measures like the rate of change (ROC).
How It Works
Price Returns Calculation: The indicator first computes the log returns of price data over a specified window length.
Entropy Calculation: These log returns are normalized and used to calculate the Shannon entropy, representing market complexity.
Momentum Integration: The calculated entropy is then multiplied by the rate of change (ROC) of prices to generate the SEMM value.
Signal Generation: High SEMM values indicate strong momentum with higher randomness, while low SEMM values indicate lower momentum with more predictable trends.
How Traders Can Use It
Trend Identification: Use SEMM to identify strong trends or potential trend reversals. Low entropy values can indicate a trending market, whereas high entropy suggests choppy or consolidating conditions.
Market State Analysis: Combine SEMM with other indicators or chart patterns to confirm the market's state—whether it's trending, ranging, or transitioning between states.
Risk Management: Consider high SEMM values as a signal to be cautious, as they suggest increased market unpredictability.
Example Usage Instructions
Add the Indicator: Apply the "Approximate Spectral Entropy-Based Market Momentum (SEMM)" indicator to your chart.
Adjust Parameters: Modify the length parameter to suit your trading timeframe. Shorter lengths are more responsive, while longer lengths smooth out the signal.
Analyze the Output: Observe the blue line for entropy and the red line for SEMM. Look for divergences or confirmations with price action to guide your trades.
Combine with Other Tools: Use SEMM alongside moving averages, support/resistance levels, or other indicators to build a comprehensive trading strategy.
Multi-Timeframe EMA Distance & % Change TableDescription of Multi-Timeframe EMA Distance & % Change Table
The Multi-Timeframe EMA Distance & % Change Table indicator is designed to display the distance and percentage change between the current price and the Exponential Moving Averages (EMAs) on multiple timeframes. It creates a table to show these values, with customizable options for decimal precision .
Key Features:
Inputs:
- Timeframes (tf1, tf2, tf3, tf4): User-defined timeframes for EMA calculations (e.g., 1 minute, 15 minutes, daily, etc.).
- EMA Levels (emaLevel, emaLevel2, emaLevel3): User-defined periods for three different EMAs.
EMA Calculations:
- Computes EMAs for the specified levels (50, 100, 200) on each of the user-selected timeframes.
Plotting:
- Plots the EMAs on the chart with distinct colors: Orange, Teal, and Green for different EMAs.
Display Options:
- Checkbox (displayAsPercentage): Allows the user to toggle between displaying distances or percentage changes.
- Decimal Precision:
- decimalPlacesDistance: Specifies the number of decimal places for rounded distance values.
- decimalPlacesPercentage: Specifies the number of decimal places for rounded percentage values.
Table Creation:
- Location: Table is placed in the top-right corner of the chart.
- Headers: Includes columns for each timeframe and EMA distance/percentage.
Distance and Percentage Calculations:
- Distances: Calculated as the difference between the current price and the EMA values for each timeframe.
- Percentages: Calculated as the distance divided by the EMA value, converted to a percentage.
Decimal Rounding:
- Custom Rounding Function: Ensures that distance and percentage values are displayed with the user-specified number of decimal places.
Color Coding:
- Distance Values: Colored green if positive, red if negative.
- Table Entries: Display either the rounded distance or percentage, based on user selection.
Table Update:
- The table is dynamically updated with either distance or percentage values based on the user's choice and rounded to the specified number of decimal places.
This indicator provides a comprehensive overview of EMA distances and percentage changes across multiple timeframes, with detailed control over the precision of the displayed values.
Hammers & star Patterns After a Trend
1. **Candlestick Patterns Detection:**
- **Hammers** and **Inverted Hammers** are specific candlestick patterns that can indicate potential reversals in the market.
- **Hammer**: A candle with a small body and a long lower wick, showing a possible reversal after a downtrend.
- **Inverted Hammer**: A candle with a small body and a long upper wick, indicating a possible reversal after an uptrend.
2. **Volume Consideration:**
- The script checks if these patterns occur with **high trading volume**. If the volume is significantly higher than the average volume over a certain period, the pattern is highlighted.
3. **Trend Detection:**
- The script looks for a significant trend before the pattern appears:
- **Downtrend**: A significant downward movement in price is required before a Hammer is considered.
- **Uptrend**: A significant upward movement is required before an Inverted Hammer is considered.
4. **Additional Patterns:**
- **Morning Star** and **Evening Star** patterns are also detected:
- **Morning Star**: A three-candle pattern where the first candle is a large bearish candle, followed by a small-bodied candle, and then a large bullish candle, indicating a potential reversal from downtrend to uptrend.
- **Evening Star**: The opposite pattern, signaling a potential reversal from uptrend to downtrend.
5. **Visual Indicators:**
- The script **plots arrows** and **labels** on the chart to show where these patterns occur:
- **Hammers** and **Inverted Hammers** are marked with triangle arrows.
- **Morning Stars** and **Evening Stars** are marked with labels.
In summary, this script helps traders identify key candlestick patterns that may signal potential reversals in price trends, with special emphasis on patterns that occur with high volume and after significant price movements.
Market Structure Based Stop LossMarket Structure Based Dynamic Stop Loss
Introduction
The Market Structure Based Stop Loss indicator is a strategic tool for traders designed to be useful in both rigorous backtesting and live testing, by providing an objective, “guess-free” stop loss level. This indicator dynamically plots suggested stop loss levels based on market structure, and the concepts of “interim lows/highs.”
It provides a robust framework for managing risk in both long and short positions. By leveraging historical price movements and real time market dynamics, this indicator helps traders identify quantitatively consistent risk levels while optimizing trade returns.
Legend
This indicator utilizes various inputs to customize its functionality, including "Stop Loss Sensitivity" and "Wick Depth," which dictate how closely the stop loss levels hug the price's highs and lows. The stop loss levels are plotted as lines on the trading chart, providing clear visual cues for position management. As seen in the chart below, this indicator dynamically plots stop loss levels for both long and short positions at every point in time.
A “Stop Loss Table” is also included, in order to enhance precision trading and increase backtesting accuracy. It is customizable in both size and positioning.
Case Study
Methodology
The methodology behind this indicator focuses on the precision placement of stop losses using market structure as a guide. It calculates stop losses by identifying the "lowest close" and the corresponding "lowest low" for long setups, and inversely for short setups. By adjusting the sensitivity settings, traders can tweak the indicator's responsiveness to price changes, ensuring that the stop losses are set with a balance between tight risk control and enough room to avoid premature exits due to market noise. The indicator's ability to adapt to different trading styles and time frames makes it an essential tool for traders aiming for efficiency and effectiveness in their risk management strategies.
An important point to make is the fact that the stop loss levels are always placed within the wicks. This is important to avoid what can be described as a “floating stop loss”. A stop loss placed outside of a wick is susceptible to an outsized degree of slippage. This is because traders always cluster their stop losses at high/low wicks, and a stop loss placed outside of this level will inevitably be caught in a low liquidity cascade or “wash-out.” When price approaches a cluster of stop losses, it is highly probable that you will be stopped out anyway, so it is prudent to attempt to be the trader who gets stopped out first in order to avoid high slippage, and losses above what you originally intended.
// For long positions: stop-loss is slightly inside the lowest wick
float dynamic_SL_Long = lowestClose - (lowestClose - lowestLow) * (1 - WickDepth)
// For short positions: stop-loss is slightly inside the highest wick
float dynamic_SL_Short = highestClose + (highestHigh - highestClose) * (1 - WickDepth)
The percentage depth of the wick in which the stop loss is placed is customisable with the “Wick Depth” variable, in order to customize stop loss strategies around the liquidity of the market a trader is executing their orders in.
Last Candle OHLC (Ticks or Points)What the Code Does
1. **Draws Lines and Labels**:
- It draws lines on your chart to show the high, low, open, and close prices from the previous period (like the previous day or week).
- It also labels these lines with numbers that tell you how far the current price is from these levels.
2. **Shows Price Movement**:
- You can see how far the price has moved from these levels in terms of small price changes (ticks) or larger units (points).
- This helps you understand price movements and potential levels of support or resistance.
3. **Customizable**:
- You can choose whether to show these lines and labels, and you can select if you want to see the movement in ticks or points.
- The lines can extend into the future on your chart to help you anticipate where prices might be in the coming days.
### How It’s Useful:
1. **Identify Key Levels**:
- It helps you spot important price levels from past periods, which can act as support or resistance.
2. **Understand Price Movement**:
- You get a visual sense of how much the price has moved from key levels, which can help you gauge market volatility.
3. **Plan Trades**:
- By seeing where the price has been and how it has moved, you can better plan your trades, like deciding where to enter or exit based on these levels.
4. **Flexible for Different Markets**:
- It works across various markets, like stocks, futures, and forex, adjusting to the specific characteristics of each instrument.
In short, this tool helps you visualize and understand past price movements and levels on your chart, aiding in your trading decisions.
Butterfly Harmonic Pattern [TradingFinder] Harmonic Detector🔵 Introduction
The Butterfly Harmonic Pattern is a sophisticated and highly regarded tool in technical analysis, utilized by traders to identify potential reversal points in the financial markets. This pattern is distinguished by its reliance on Fibonacci ratios and geometric configurations, which aid in predicting price movements with remarkable precision.
The origin of the Butterfly Harmonic Pattern can be traced back to the pioneering work of Bryce Gilmore, who is credited with discovering this pattern. Gilmore's extensive research and expertise in Fibonacci ratios laid the groundwork for the identification and application of this pattern in technical analysis.
The Butterfly pattern, like other harmonic patterns, is based on the principle that market movements are not random but follow specific structures and ratios.
The pattern is characterized by a distinct "M" shape in bullish scenarios and a "W" shape in bearish scenarios, each indicating a potential reversal point. These formations are identified by specific Fibonacci retracement and extension levels, making the Butterfly pattern a powerful tool for traders seeking to capitalize on market turning points.
The precise nature of the Butterfly pattern allows for the accurate prediction of target prices and the establishment of strategic entry and exit points, making it an indispensable component of a trader's analytical arsenal.
Bullish :
Bearish :
🔵 How to Use
Like other harmonic patterns, the Butterfly pattern is categorized based on how it forms at the end of an uptrend or downtrend. Unlike the Gartley and Bat patterns, the Butterfly pattern, similar to the Crab pattern, forms outside the wave 3 range at the end of a rally.
🟣 Types of Butterfly Harmonic Patterns
🟣 Bullish Butterfly Pattern
This pattern forms at the end of a downtrend and leads to a trend reversal from a downtrend to an uptrend.
🟣 Bearish Butterfly Pattern
In contrast to the Bullish Butterfly pattern, this pattern forms at the end of an uptrend and warns analysts of a trend reversal to a downtrend. In this case, traders are encouraged to shift their trading stance from buy trades to sell trades.
Advantages and Limitations of the Butterfly Pattern in Technical Analysis :
The Butterfly pattern is considered one of the precise and stable tools in financial market analysis. However, it is always important to pay special attention to the advantages and limitations of each pattern.
Here, we review the advantages and disadvantages of using the Butterfly harmonic pattern :
The main advantage of the Butterfly pattern is providing very accurate signals.
Using Fibonacci golden ratios and geometric rules, the Butterfly pattern identifies patterns accurately and systematically. (This high accuracy significantly helps investors in making trading decisions.)
Identifying this pattern requires expertise and experience in technical analysis.
Recognizing the Butterfly pattern might be complex for beginner traders. (Correct identification of the pattern necessitates mastery over geometric principles and Fibonacci ratios.)
The Butterfly harmonic pattern might issue false trading signals. (Traders usually combine the Butterfly pattern with other technical tools to confirm buy and sell signals.)
🔵 Setting
🟣 Logical Setting
ZigZag Pivot Period : You can adjust the period so that the harmonic patterns are adjusted according to the pivot period you want. This factor is the most important parameter in pattern recognition.
Show Valid Forma t: If this parameter is on "On" mode, only patterns will be displayed that they have exact format and no noise can be seen in them. If "Off" is, the patterns displayed that maybe are noisy and do not exactly correspond to the original pattern.
Show Formation Last Pivot Confirm : if Turned on, you can see this ability of patterns when their last pivot is formed. If this feature is off, it will see the patterns as soon as they are formed. The advantage of this option being clear is less formation of fielded patterns, and it is accompanied by the latest pattern seeing and a sharp reduction in reward to risk.
Period of Formation Last Pivot : Using this parameter you can determine that the last pivot is based on Pivot period.
🟣 Genaral Setting
Show : Enter "On" to display the template and "Off" to not display the template.
Color : Enter the desired color to draw the pattern in this parameter.
LineWidth : You can enter the number 1 or numbers higher than one to adjust the thickness of the drawing lines. This number must be an integer and increases with increasing thickness.
LabelSize : You can adjust the size of the labels by using the "size.auto", "size.tiny", "size.smal", "size.normal", "size.large" or "size.huge" entries.
🟣 Alert Setting
Alert : On / Off
Message Frequency : This string parameter defines the announcement frequency. Choices include: "All" (activates the alert every time the function is called), "Once Per Bar" (activates the alert only on the first call within the bar), and "Once Per Bar Close" (the alert is activated only by a call at the last script execution of the real-time bar upon closing). The default setting is "Once per Bar".
Show Alert Time by Time Zone : The date, hour, and minute you receive in alert messages can be based on any time zone you choose. For example, if you want New York time, you should enter "UTC-4". This input is set to the time zone "UTC" by default.
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.
Multiple Naked LevelsPURPOSE OF THE INDICATOR
This indicator autogenerates and displays naked levels and gaps of multiple types collected into one simple and easy to use indicator.
VALUE PROPOSITION OF THE INDICATOR AND HOW IT IS ORIGINAL AND USEFUL
1) CONVENIENCE : The purpose of this indicator is to offer traders with one coherent and robust indicator providing useful, valuable, and often used levels - in one place.
2) CLUSTERS OF CONFLUENCES : With this indicator it is easy to identify levels and zones on the chart with multiple confluences increasing the likelihood of a potential reversal zone.
THE TYPES OF LEVELS AND GAPS INCLUDED IN THE INDICATOR
The types of levels include the following:
1) PIVOT levels (Daily/Weekly/Monthly) depicted in the chart as: dnPIV, wnPIV, mnPIV.
2) POC (Point of Control) levels (Daily/Weekly/Monthly) depicted in the chart as: dnPoC, wnPoC, mnPoC.
3) VAH/VAL STD 1 levels (Value Area High/Low with 1 std) (Daily/Weekly/Monthly) depicted in the chart as: dnVAH1/dnVAL1, wnVAH1/wnVAL1, mnVAH1/mnVAL1
4) VAH/VAL STD 2 levels (Value Area High/Low with 2 std) (Daily/Weekly/Monthly) depicted in the chart as: dnVAH2/dnVAL2, wnVAH2/wnVAL2, mnVAH1/mnVAL2
5) FAIR VALUE GAPS (Daily/Weekly/Monthly) depicted in the chart as: dnFVG, wnFVG, mnFVG.
6) CME GAPS (Daily) depicted in the chart as: dnCME.
7) EQUILIBRIUM levels (Daily/Weekly/Monthly) depicted in the chart as dnEQ, wnEQ, mnEQ.
HOW-TO ACTIVATE LEVEL TYPES AND TIMEFRAMES AND HOW-TO USE THE INDICATOR
You can simply choose which of the levels to be activated and displayed by clicking on the desired radio button in the settings menu.
You can locate the settings menu by clicking into the Object Tree window, left-click on the Multiple Naked Levels and select Settings.
You will then get a menu of different level types and timeframes. Click the checkboxes for the level types and timeframes that you want to display on the chart.
You can then go into the chart and check out which naked levels that have appeared. You can then use those levels as part of your technical analysis.
The levels displayed on the chart can serve as additional confluences or as part of your overall technical analysis and indicators.
In order to back-test the impact of the different naked levels you can also enable tapped levels to be depicted on the chart. Do this by toggling the 'Show tapped levels' checkbox.
Keep in mind however that Trading View can not shom more than 500 lines and text boxes so the indocator will not be able to give you the complete history back to the start for long duration assets.
In order to clean up the charts a little bit there are two additional settings that can be used in the Settings menu:
- Selecting the price range (%) from the current price to be included in the chart. The default is 25%. That means that all levels below or above 20% will not be displayed. You can set this level yourself from 0 up to 100%.
- Selecting the minimum gap size to include on the chart. The default is 1%. That means that all gaps/ranges below 1% in price difference will not be displayed on the chart. You can set the minimum gap size yourself.
BASIC DESCRIPTION OF THE INNER WORKINGS OF THE INDICTATOR
The way the indicator works is that it calculates and identifies all levels from the list of levels type and timeframes above. The indicator then adds this level to a list of untapped levels.
Then for each bar after, it checks if the level has been tapped. If the level has been tapped or a gap/range completely filled, this level is removed from the list so that the levels displayed in the end are only naked/untapped levels.
Below is a descrition of each of the level types and how it is caluclated (algorithm):
PIVOT
Daily, Weekly and Monthly levels in trading refer to significant price points that traders monitor within the context of a single trading day. These levels can provide insights into market behavior and help traders make informed decisions regarding entry and exit points.
Traders often use D/W/M levels to set entry and exit points for trades. For example, entering long positions near support (daily close) or selling near resistance (daily close).
Daily levels are used to set stop-loss orders. Placing stops just below the daily close for long positions or above the daily close for short positions can help manage risk.
The relationship between price movement and daily levels provides insights into market sentiment. For instance, if the price fails to break above the daily high, it may signify bearish sentiment, while a strong breakout can indicate bullish sentiment.
The way these levels are calculated in this indicator is based on finding pivots in the chart on D/W/M timeframe. The level is then set to previous D/W/M close = current D/W/M open.
In addition, when price is going up previous D/W/M open must be smaller than previous D/W/M close and current D/W/M close must be smaller than the current D/W/M open. When price is going down the opposite.
POINT OF CONTROL
The Point of Control (POC) is a key concept in volume profile analysis, which is commonly used in trading.
It represents the price level at which the highest volume of trading occurred during a specific period.
The POC is derived from the volume traded at various price levels over a defined time frame. In this indicator the timeframes are Daily, Weekly, and Montly.
It identifies the price level where the most trades took place, indicating strong interest and activity from traders at that price.
The POC often acts as a significant support or resistance level. If the price approaches the POC from above, it may act as a support level, while if approached from below, it can serve as a resistance level. Traders monitor the POC to gauge potential reversals or breakouts.
The way the POC is calculated in this indicator is by an approximation by analysing intrabars for the respective timeperiod (D/W/M), assigning the volume for each intrabar into the price-bins that the intrabar covers and finally identifying the bin with the highest aggregated volume.
The POC is the price in the middle of this bin.
The indicator uses a sample space for intrabars on the Daily timeframe of 15 minutes, 35 minutes for the Weekly timeframe, and 140 minutes for the Monthly timeframe.
The indicator has predefined the size of the bins to 0.2% of the price at the range low. That implies that the precision of the calulated POC og VAH/VAL is within 0.2%.
This reduction of precision is a tradeoff for performance and speed of the indicator.
This also implies that the bigger the difference from range high prices to range low prices the more bins the algorithm will iterate over. This is typically the case when calculating the monthly volume profile levels and especially high volatility assets such as alt coins.
Sometimes the number of iterations becomes too big for Trading View to handle. In these cases the bin size will be increased even more to reduce the number of iterations.
In such cases the bin size might increase by a factor of 2-3 decreasing the accuracy of the Volume Profile levels.
Anyway, since these Volume Profile levels are approximations and since precision is traded for performance the user should consider the Volume profile levels(POC, VAH, VAL) as zones rather than pin point accurate levels.
VALUE AREA HIGH/LOW STD1/STD2
The Value Area High (VAH) and Value Area Low (VAL) are important concepts in volume profile analysis, helping traders understand price levels where the majority of trading activity occurs for a given period.
The Value Area High/Low is the upper/lower boundary of the value area, representing the highest price level at which a certain percentage of the total trading volume occurred within a specified period.
The VAH/VAL indicates the price point above/below which the majority of trading activity is considered less valuable. It can serve as a potential resistance/support level, as prices above/below this level may experience selling/buying pressure from traders who view the price as overvalued/undervalued
In this indicator the timeframes are Daily, Weekly, and Monthly. This indicator provides two boundaries that can be selected in the menu.
The first boundary is 70% of the total volume (=1 standard deviation from mean). The second boundary is 95% of the total volume (=2 standard deviation from mean).
The way VAH/VAL is calculated is based on the same algorithm as for the POC.
However instead of identifying the bin with the highest volume, we start from range low and sum up the volume for each bin until the aggregated volume = 30%/70% for VAL1/VAH1 and aggregated volume = 5%/95% for VAL2/VAH2.
Then we simply set the VAL/VAH equal to the low of the respective bin.
FAIR VALUE GAPS
Fair Value Gaps (FVG) is a concept primarily used in technical analysis and price action trading, particularly within the context of futures and forex markets. They refer to areas on a price chart where there is a noticeable lack of trading activity, often highlighted by a significant price movement away from a previous level without trading occurring in between.
FVGs represent price levels where the market has moved significantly without any meaningful trading occurring. This can be seen as a "gap" on the price chart, where the price jumps from one level to another, often due to a rapid market reaction to news, events, or other factors.
These gaps typically appear when prices rise or fall quickly, creating a space on the chart where no transactions have taken place. For example, if a stock opens sharply higher and there are no trades at the prices in between the two levels, it creates a gap. The areas within these gaps can be areas of liquidity that the market may return to “fill” later on.
FVGs highlight inefficiencies in pricing and can indicate areas where the market may correct itself. When the market moves rapidly, it may leave behind price levels that traders eventually revisit to establish fair value.
Traders often watch for these gaps as potential reversal or continuation points. Many traders believe that price will eventually “fill” the gap, meaning it will return to those price levels, providing potential entry or exit points.
This indicator calculate FVGs on three different timeframes, Daily, Weekly and Montly.
In this indicator the FVGs are identified by looking for a three-candle pattern on a chart, signalling a discrete imbalance in order volume that prompts a quick price adjustment. These gaps reflect moments where the market sentiment strongly leans towards buying or selling yet lacks the opposite orders to maintain price stability.
The indicator sets the gap to the difference from the high of the first bar to the low of the third bar when price is moving up or from the low of the first bar to the high of the third bar when price is moving down.
CME GAPS (BTC only)
CME gaps refer to price discrepancies that can occur in charts for futures contracts traded on the Chicago Mercantile Exchange (CME). These gaps typically arise from the fact that many futures markets, including those on the CME, operate nearly 24 hours a day but may have significant price movements during periods when the market is closed.
CME gaps occur when there is a difference between the closing price of a futures contract on one trading day and the opening price on the following trading day. This difference can create a "gap" on the price chart.
Opening Gaps: These usually happen when the market opens significantly higher or lower than the previous day's close, often influenced by news, economic data releases, or other market events occurring during non-trading hours.
Gaps can result from reactions to major announcements or developments, such as earnings reports, geopolitical events, or changes in economic indicators, leading to rapid price movements.
The importance of CME Gaps in Trading is the potential for Filling Gaps: Many traders believe that prices often "fill" gaps, meaning that prices may return to the gap area to establish fair value.
This can create potential trading opportunities based on the expectation of gap filling. Gaps can act as significant support or resistance levels. Traders monitor these levels to identify potential reversal points in price action.
The way the gap is identified in this indicator is by checking if current open is higher than previous bar close when price is moving up or if current open is lower than previous day close when price is moving down.
EQUILIBRIUM
Equilibrium in finance and trading refers to a state where supply and demand in a market balance each other, resulting in stable prices. It is a key concept in various economic and trading contexts. Here’s a concise description:
Market Equilibrium occurs when the quantity of a good or service supplied equals the quantity demanded at a specific price level. At this point, there is no inherent pressure for the price to change, as buyers and sellers are in agreement.
Equilibrium Price is the price at which the market is in equilibrium. It reflects the point where the supply curve intersects the demand curve on a graph. At the equilibrium price, the market clears, meaning there are no surplus goods or shortages.
In this indicator the equilibrium level is calculated simply by finding the midpoint of the Daily, Weekly, and Montly candles respectively.
NOTES
1) Performance. The algorithms are quite resource intensive and the time it takes the indicator to calculate all the levels could be 5 seconds or more, depending on the number of bars in the chart and especially if Montly Volume Profile levels are selected (POC, VAH or VAL).
2) Levels displayed vs the selected chart timeframe. On a timeframe smaller than the daily TF - both Daily, Weekly, and Monthly levels will be displayed. On a timeframe bigger than the daily TF but smaller than the weekly TF - the Weekly and Monthly levels will be display but not the Daily levels. On a timeframe bigger than the weekly TF but smaller than the monthly TF - only the Monthly levels will be displayed. Not Daily and Weekly.
CREDITS
The core algorithm for calculating the POC levels is based on the indicator "Naked Intrabar POC" developed by rumpypumpydumpy (https:www.tradingview.com/u/rumpypumpydumpy/).
The "Naked intrabar POC" indicator calculates the POC on the current chart timeframe.
This indicator (Multiple Naked Levels) adds two new features:
1) It calculates the POC on three specific timeframes, the Daily, Weekly, and Monthly timeframes - not only the current chart timeframe.
2) It adds functionaly by calculating the VAL and VAH of the volume profile on the Daily, Weekly, Monthly timeframes .
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.
Sylvain Zig-Zag [MyTradingCoder]This Pine Script version of ZigZagHighLow is a faithful port of Sylvain Vervoort's original study, initially implemented in NinjaScript and later added to the thinkorswim standard library. This indicator identifies and connects swing points in price data, offering a clear visualization of market moves that exceed a specified threshold. Additionally, it now includes features for detecting and plotting support and resistance levels, enhancing its utility for technical analysis.
Overview
The Sylvain Zig-Zag study excels at highlighting significant price swings by plotting points where the price change, combined with volatility adjustments via the Average True Range (ATR), exceeds a user-defined percentage. It effectively smooths out minor fluctuations, allowing traders to focus on the primary market trends. This tool is particularly useful in identifying potential turning points, trends in price movements, and key support and resistance levels, making it a valuable addition to your technical analysis arsenal.
How It Works
The Sylvain Zig-Zag indicator works by detecting swing points in the price data and connecting them to form a zigzag pattern. A swing point is identified when the price moves a certain distance, defined by a combination of percentage change and ATR. This distance must be exceeded for a swing point to be plotted.
When the price moves upwards and exceeds the previous high by a specified percentage plus a factor of the ATR, a new high swing point is plotted. Conversely, a low swing point is plotted when the price moves downwards and exceeds the previous low by the same criteria. This ensures that only significant price moves are considered, filtering out minor fluctuations and providing a clear view of the overall market trend.
In addition to plotting zigzag lines, the indicator can now identify and draw support and resistance levels based on the detected swing points. These levels are crucial for identifying potential reversal areas and market structure.
Key Features
Swing Point Detection: Accurately identifies significant price swings by considering both percentage price change and volatility (via Average True Range).
Dynamic Support/Resistance: Automatically generates support and resistance lines based on the identified swing points, providing potential areas of price reversals.
Customizable Parameters: Tailor the indicator's sensitivity to your preferred trading style and market conditions. Adjust parameters like percentage reversal, ATR settings, and absolute/tick reversals.
Visual Clarity: Choose to display the ZigZag line, support/resistance levels, new trend icons, continuation icons, and even customize bar colors for easy visual analysis.
Trading Applications
Trend Identification: Easily visualize the prevailing market trend using the direction of the ZigZag line and support/resistance levels.
Entry/Exit Signals: Potential entry points can be identified when the price interacts with the dynamic support/resistance levels.
Stop-Loss Placement: Use recent swing points as logical places for setting stop-loss orders.
Profit Targets: Project potential price targets based on the distance between previous swing points.
Input Parameters
Several input parameters can be adjusted to customize the behavior of the Sylvain Zig-Zag indicator. These parameters allow traders to fine-tune the detection of swing points and support/resistance levels to better suit their trading strategy and the specific market conditions they are analyzing.
High Source and Low Source:
These inputs define the price points used for detecting high and low swing points, respectively. You can choose between high, low, open, or close prices for these calculations.
Percentage Reversal:
This input sets the minimum percentage change in price required for a swing to be detected. A higher percentage value will result in fewer but more significant swing points, while a lower value will detect more frequent, smaller swings.
Absolute Reversal:
This parameter allows for an additional fixed value to be added to the minimum price change and ATR change. This can be useful for increasing the distance between swing points in volatile markets.
ATR Length:
This input defines the period used for calculating the ATR, which is a measure of market volatility. A longer ATR period will smooth out the ATR calculation, while a shorter period will make it more sensitive to recent price changes.
ATR Multiplier:
This factor is applied to the ATR value to adjust the sensitivity of the swing point detection. A higher multiplier will increase the required price movement for a swing point to be plotted, reducing the number of detected swings.
Tick Reversal:
This input allows for an additional value in ticks to be added to the minimum price change and ATR change, providing further customization in the swing point detection process.
Support and Resistance:
Show S/R: Enable or disable the plotting of support and resistance levels.
Max S/R Levels: Set the maximum number of support and resistance levels to display.
S/R Line Width: Adjust the width of the support and resistance lines.
Visual Settings
The Sylvain Zig-Zag indicator also includes visual settings to enhance the clarity of the plotted swing points and trends. You can customize the color and width of the zigzag line, and enable icons to indicate new trends and continuation patterns. Additionally, the bars can be colored based on the detected trend, aiding in quick visual analysis.
Conclusion
This port of the ZigZagHighLow study from NinjaScript to Pine Script preserves the essence of Sylvain Vervoort’s methodology while adding new features for support and resistance. It provides traders with a powerful tool for technical analysis. The combination of price changes and ATR ensures that you have a robust and adaptable tool for identifying key market movements and structural levels. Customize the settings to match your trading style and gain a clearer picture of market trends, turning points, and support/resistance areas. Enjoy improved market analysis and more informed trading decisions with the Sylvain Zig-Zag indicator.
Gartley Harmonic Pattern [TradingFinder] Harmonic Chart patterns🔵 Introduction
Research by H.M. Gartley and Scott Carney emphasizes the importance of harmonic patterns in technical analysis for predicting market movements. Gartley's work, particularly the Gartley 222 pattern, is detailed in his book "Profits in the Stock Market" and relies on the specific placement of points X, A, B, C, and D.
🟣 Defining the Gartley Pattern
The Gartley pattern is a powerful technical analysis tool often seen at the end of a trend, signaling a potential reversal. Ideally, it forms during the first and second waves of Elliott Wave theory, with wave XA representing wave 1 and the entire ABCD correction representing wave 2.
While patterns outside this structure are also valid, the key points of the Gartley pattern align closely with Fibonacci retracement levels. Specifically, point B corrects wave XA to the 61.8% level, point C lies between 38% and 79% of wave AB, and point D extends between 113% and 162% of wave BC.
The bullish Gartley pattern, shown below, forms at the end of a downtrend and signals a potential buying opportunity.
Bullish :
Bearish :
🔵 How to Use
🟣 Bullish Gartley Pattern
To spot a bullish Gartley pattern, follow these rules: the move from point X to point A (the first leg) must be upward. The subsequent move from point A to point B is downward, followed by an upward move from point B to point C.
Finally, the move from point C to point D is downward. On a chart, this pattern resembles the letter M. After the final leg of this pattern, prices are expected to rise from point D.
🟣 Bearish Gartley Pattern
A bearish Gartley pattern forms similarly to the bullish one but in reverse. The initial move from point X to point A should be downward. The next move from point A to point B is upward, followed by a downward move from point B to point C.
The final leg moves upward from point C to point D. This pattern appears as a W on charts, indicating that prices are likely to fall from point D after the final move.
By understanding and identifying Gartley patterns, traders can enhance their technical analysis and improve their decision-making in financial markets. These patterns, when correctly identified, offer significant insights into potential market reversals and continuation patterns.
🔵 Setting
🟣 Logical Setting
ZigZag Pivot Period : You can adjust the period so that the harmonic patterns are adjusted according to the pivot period you want. This factor is the most important parameter in pattern recognition.
Show Valid Format : If this parameter is on "On" mode, only patterns will be displayed that they have exact format and no noise can be seen in them. If "Off" is, the patterns displayed that maybe are noisy and do not exactly correspond to the original pattern
Show Formation Last Pivot Confirm : if Turned on, you can see this ability of patterns when their last pivot is formed. If this feature is off, it will see the patterns as soon as they are formed. The advantage of this option being clear is less formation of fielded patterns, and it is accompanied by the latest pattern seeing and a sharp reduction in reward to risk.
Period of Formation Last Pivot : Using this parameter you can determine that the last pivot is based on Pivot period.
🟣 Genaral Setting
Show : Enter "On" to display the template and "Off" to not display the template.
Color : Enter the desired color to draw the pattern in this parameter.
LineWidth : You can enter the number 1 or numbers higher than one to adjust the thickness of the drawing lines. This number must be an integer and increases with increasing thickness.
LabelSize : You can adjust the size of the labels by using the "size.auto", "size.tiny", "size.smal", "size.normal", "size.large" or "size.huge" entries.
🟣 Alert Setting
Alert : On / Off
Message Frequency : This string parameter defines the announcement frequency. Choices include: "All" (activates the alert every time the function is called), "Once Per Bar" (activates the alert only on the first call within the bar), and "Once Per Bar Close" (the alert is activated only by a call at the last script execution of the real-time bar upon closing). The default setting is "Once per Bar".
Show Alert Time by Time Zone : The date, hour, and minute you receive in alert messages can be based on any time zone you choose. For example, if you want New York time, you should enter "UTC-4". This input is set to the time zone "UTC" by default.
SOL & BTC EMA with BTC/SOL Price Difference % and BTC Dom EMAThis script is designed to provide traders with a comprehensive analysis of Solana (SOL) and Bitcoin (BTC) by incorporating Exponential Moving Averages (EMAs) and price difference percentages. It also includes the BTC Dominance EMA to offer insights into the overall market dominance of Bitcoin.
Features:
SOL EMA: Plots the Exponential Moving Average (EMA) for Solana (SOL) based on a customizable period length.
BTC EMA: Plots the Exponential Moving Average (EMA) for Bitcoin (BTC) based on a customizable period length.
BTC Dominance EMA: Plots the Exponential Moving Average (EMA) for BTC Dominance, which helps in understanding Bitcoin's market share relative to other cryptocurrencies.
BTC/SOL Price Difference %: Calculates and plots the percentage difference between BTC and SOL prices, adjusted for their respective EMAs. This helps in identifying relative strength or weakness between the two assets.
Background Highlight: Colors the background to visually indicate whether the BTC/SOL price difference percentage is positive (green) or negative (red), aiding in quick decision-making.
Inputs:
SOL Ticker: Symbol for Solana (default: BINANCE
).
BTC Ticker: Symbol for Bitcoin (default: BINANCE
).
BTC Dominance Ticker: Symbol for Bitcoin Dominance (default: CRYPTOCAP
.D).
EMA Length: The length of the EMA (default: 20 periods).
Usage:
This script is intended for traders looking to analyze the relationship between SOL and BTC, using EMAs to smooth out price data and highlight trends. The BTC/SOL price difference percentage can help traders identify potential trading opportunities based on the relative movements of SOL and BTC.
Note: Leverage trading involves significant risk and may not be suitable for all investors. Ensure you have a good understanding of the market conditions and employ proper risk management techniques.
Visible Range Support and Resistance [AlgoAlpha]🌟 Introducing the Visible Range Support and Resistance 🌟
Discover key support and resistance levels with the innovative "Visible Range Support and Resistance" indicator by AlgoAlpha! 🚀📈 This advanced tool dynamically identifies significant price zones based on the visible range of your chart, providing traders with crucial insights for making informed decisions.
Key Features:
Dynamic support and resistance levels based on visible chart range 📏
User-defined resolution for tailored analysis 🎯
Clear visual representation of significant key zones 🖼️
Easy integration with any trading strategy 💼
How to Use:
🛠 Add the Indicator : Add the indicator to favourites. Adjust settings like resolution and horizontal extension to suit your trading style.
📊 Market Analysis : Identify key support and resistance zones based on the highlighted areas. These zones indicate significant price levels where the market may react.
How it Works:
The indicator segments the price range into user-defined resolutions, analyzing the highest and lowest points to establish boundaries. It calculates the frequency of price action within these segments, highlighting key levels where price movements are least concentrated (areas where price tends to pivot). Customizable settings like resolution and horizontal extension allow for tailored analysis, while the intuitive visual representation makes it easy to spot potential support and resistance zones directly on your chart.
By leveraging this indicator, you can gain deeper insights into market dynamics and improve your trading strategy with data driven support and resistance analysis. Happy trading! 💹✨
Market Structures + ZigZag [TradingFinder] CHoCH/BOS - MSS/MSB🟣 Introduction
🔵 Market Structure
Grasping market structure entails examining market behavior. Essentially, market structure refers to the formation and progression of the market within its trends.
Market structures are generally fractal and nested, leading us to classify them into internal (minor) and external (major) structures. There are several definitions of market structure, with differing perspectives such as Smart Money and ICT offering their own interpretations.
🔵 Zig Zag
The Zigzag indicator is a lagging tool that identifies points on a price chart where significant changes occur compared to the previous wave. By connecting these points, it helps traders detect trends.
This indicator minimizes random price fluctuations, aiming to clarify the primary price trend.
Pivots are points on a price chart where the direction changes. Also known as reversal points, pivots form when supply and demand forces overpower one another.
There are various types of technical analysis pivots, which can be divided into two categories: minor pivots and major pivots, each with distinct significance in analysis.
Major Pivot : These pivots signify substantial changes in the chart's direction and occur at the end of trends. Analysts focusing on primary analysis prioritize major pivot points. In fact, most technical analysis tools are evaluated and based on major pivots.
Minor Pivot : These pivots highlight smaller, subsidiary points and directions, appearing at the end of corrections. Analysts who focus on minor pivots represent small trends. It's important to note that minor pivots are not suitable for use in primary technical tools.
Identifying Minor and Major Pivots :
Minor pivots are formed between two major pivots and do not break the opposing major pivot. (Internal Pivot)
Major pivots are those that either successfully break the opposing pivot or move beyond the previous pivot of the same type. (External Pivot)
🟣 How to Use
🔵 Identifying Break of Structure (BOS)
In a given trend, such as a downtrend, a Break of Structure occurs when the price drops below the previous low and forms a new low (LL). In an uptrend, a BOS (MSB) happens when the price rises and exceeds the last high.
To confirm a trend, at least one BOS is required. The break above or below the previous high or low must be validated by the closing of at least one candle beyond that level.
🔵 Identifying Change of Character (CHOCH)
Change of Character (CHOCH) is an essential concept in market structure analysis, indicating a trend change. In other words, a trend concludes with a CHOCH (MSS). For example, in a downtrend, the price declines with BOS.
While BOS highlights the trend's strength, a CHOCH occurs when the price rises and surpasses the last high, signaling a transition from a downtrend to an uptrend.
This does not imply immediately entering a buy trade; instead, it is prudent to wait for a BOS in the upward direction to confirm the uptrend.
Unlike BOS, confirming a CHOCH does not require a candle to close; simply breaking above or below the previous high or low with the candle's wick is sufficient. The following examples illustrate bearish and bullish CHOCH.
Terms :
Market Structure Shift = MSS
Market Structure Break = MSB
🔵 Zig Zag
Based on identifying pivots and drawing zigzag lines, you can have different uses of this indicator.
Including :
Identifying pivot types along with major and minor recognition.
Identifying internal and external breakouts.
Identifying support and resistance levels.
Identifying Elliott Waves.
Identifying classic patterns.
Identifying pivots with higher validity.
Identifying trends and range areas.
🟣 Settings
Pivot Period Market Structure and ZigZag Line: Using this input, you can determine the pivot period for identifying swings.
Through the settings, you can customize the display, visibility, and color of each line as desired.
Swing Failure Zones and Signals [AlgoAlpha]Elevate your trading strategy with the Swing Failure Zones and Signals indicator by AlgoAlpha! This powerful tool helps you identify potential swing failure zones, offering clear bullish and bearish signals to guide your trading decisions. 📈💡
🎨 Bullish/Bearish Color Customization : Easily set the colors for bullish and bearish signals to match your chart preferences.
🧹 Mitigated Zone Removal : Option to remove mitigated zones from the chart for a cleaner view.
🔍 Range High/Low Lookback : Adjustable lookback period for determining significant highs and lows.
🖌 Dynamic Zone Creation : Automatically draws zones based on swing failure criteria.
🔔 Alert Conditions : Set alerts for both bullish and bearish swing failure conditions to stay informed without constant monitoring.
Quick Guide to Using the Swing Failure Zones and Signals Indicator
🛠 Add the Indicator : Search for "Swing Failure Zones and Signals " in TradingView's Indicators & Strategies. Customize settings like lookback period, colors, and zone removal options to fit your trading style.
📊 Market Analysis : Watch for the appearance of the zones and the directional arrows for potential reversal signals. Use these signals to identify key market entries and exits.
🔔 Alerts : Enable alerts for bullish and bearish swing failure conditions to capture trading opportunities without constant chart monitoring.
How it works
The indicator calculates the direction and length of each candle to identify swing failure points by comparing current high and low prices with those from the lookback period. A bullish swing failure is detected when the current low is lower than the previous low and the close is higher than the previous high, while a bearish swing failure occurs when the current high is higher than the previous high and the close is lower than the previous low. Upon detection, the script creates zones on the chart to indicate these failure points and manages them by removing invalidated zones based on the user's settings. Visual signals are plotted on the chart as arrows, and alerts are set for these conditions to help traders capture potential entry opportunities efficiently.
Enhance your trading edge with this robust tool designed to spotlight critical swing failure points in the market! 💪📈
Standard Error Bands**Standard Error Bands Indicator: A Statistically Robust Tool for Trend Analysis**
The Standard Error Bands (SEB) indicator is a powerful technical analysis tool designed to help traders identify and assess trends with greater accuracy. Unlike traditional band indicators (e.g., Bollinger Bands) that rely on price averages, SEB leverages linear regression and statistical measures of volatility to offer deeper insights into market dynamics.
**How It Works**
1. **Linear Regression:** The indicator first calculates a linear regression line to model the underlying price trend. This line represents the "best fit" of price data over the specified lookback period.
2. **Standard Error:** Next, it calculates the standard error of the regression. This statistical measure quantifies the average distance between actual prices and the regression line, effectively acting as a volatility gauge.
3. **Smoothing:** Both the linear regression line and the standard error values are smoothed using a Simple Moving Average (SMA) to reduce noise and enhance the visual clarity of the bands.
4. **Band Construction:** The upper and lower bands are formed by adding/subtracting a multiple of the smoothed standard error from the smoothed linear regression line. The default multiplier is 2, representing approximately 95% of price action expected within the bands under normal market conditions.
**Key Insights**
* **Trend Strength:** Tight bands suggest a strong, well-defined trend with low volatility. Prices tend to adhere closely to the regression line, indicating a high probability of trend continuation.
* **Trend Weakness/Change:** Widening or expanding bands signal increased volatility and potential trend weakness. Prices deviating from the regression line may suggest an impending trend reversal or a shift into a sideways consolidation phase.
* **Entry/Exit Signals:**
* Consider entering a trade when prices break out of the bands in the direction of the trend, especially if the bands were previously tight.
* Conversely, consider exiting a trade when prices pierce the bands against the trend or when the bands start to widen significantly.
**Use Cases**
* **Trend Identification:** SEB can help traders identify trends earlier and more accurately than moving average-based indicators.
* **Trend Confirmation:** The bands can be used to confirm the validity and strength of an existing trend.
* **Volatility Assessment:** Changes in band width provide valuable insights into market volatility, aiding risk management decisions.
* **Entry/Exit Timing:** SEB can be incorporated into trading strategies to generate timely entry and exit signals.
**Important Considerations**
* **Parameter Optimization:** Experiment with different lookback periods, smoothing values, and standard error multipliers to find the optimal settings for your preferred trading style and market conditions.
* **Supplementary Indicators:** Combine SEB with other technical indicators (e.g., momentum oscillators, volume analysis) for a more comprehensive market assessment.
* **Backtesting:** Thoroughly backtest any SEB-based trading strategy to ensure its effectiveness before deploying it in live markets.
**Disclaimer:** Technical indicators like SEB are valuable tools but should not be used in isolation. Always consider price action or fundamental factors and risk management principles when making trading decisions.
Volume Weighted Relative Strength Index (VWRSI) [AlgoAlpha]Volume Weighted Relative Strength Index 📈✨
The Volume Weighted Relative Strength Index (VWRSI) by AlgoAlpha enhances traditional RSI by incorporating volume weighting, providing a more nuanced view of market strength. It uses custom range detection to measure consolidation strength, applying dynamic scoring to highlight trend phases. The indicator includes customizable moving averages (SMA, EMA, WMA, VWMA) and color-coded visual cues for uptrends and downtrends. Additionally, it marks significant bullish and bearish trend points with symbols, making it easier to identify potential trading opportunities. This powerful tool helps traders make informed decisions by combining volume, price action, and trend analysis.
✨ Key Features :
📊 Volume-Weighted RSI : Combines RSI with volume for better accuracy.
🔄 Range Detection : Identifies consolidation phases.
🎨 Customizable MAs : Choose from various moving averages.
🔔 Alert Capabilities : Set notifications for trend points.
🚀 How to Use :
🛠 Add Indicator : Add the indicator to favorites, and customize the settings to suite your trading style.
📊 Analyze Market : Watch RSI and range score for trends.
🔔 Set Alerts : Get notified of bullish/bearish points.
✨ How It Works :
The Volume Weighted Relative Strength Index (VWRSI) combines traditional RSI with volume weighting to offer a more comprehensive view of market momentum. It calculates the RSI using the closing price, then weights it by volume to enhance the accuracy of the trend analysis. The indicator also includes a custom range detection feature that evaluates consolidation strength by dynamically scoring the RSI over a specified period. This scoring helps identify phases of strong trends and consolidations. Visual elements like color-coded trend fills and symbols for bullish and bearish points make it easier to spot key market movements and potential trading opportunities.
Stay ahead with VWRSI by AlgoAlpha! 📈💡
FiboSequFiboSequ: Fibonacci Sequence Marking
Leonardo Fibonacci was an Italian mathematician who lived in the 12th century. His real name was Leonardo of Pisa, but he is commonly known as "Fibonacci." Fibonacci is famous for introducing the Hindu-Arabic numeral system to the Western world. This system is the basis of the modern decimal number system we use today.
Fibonacci Sequence
The Fibonacci sequence is a series of numbers that frequently appears in mathematics and nature. The first two numbers in the sequence are 0 and 1, and each subsequent number is the sum of the two preceding numbers.
The sequence is as follows:
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, 2584, ...
Fibonacci Time Zones:
Fibonacci time zones are used to identify potential turning points in the market at specific time intervals. These time zones correspond to the Fibonacci sequence in terms of consecutive days or weeks.
The Fibonacci sequence has a wide range of applications in both mathematics and nature. Leonardo Fibonacci's work has had a significant impact on the development of modern mathematics and numeral systems. In financial markets, the Fibonacci sequence and ratios are frequently used by technical analysts to predict and analyze market movements.
Description:
Overview:
The FiboSequ indicator marks significant days on a price chart based on the Fibonacci sequence. This can help traders identify potential turning points or areas of interest in the market. The Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones, often found in nature and financial markets.
Fibonacci Sequence:
The sequence used in this indicator includes: 1, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987, 1597, and 2584.
These numbers represent the days to be marked on the chart, highlighting possible significant market movements.
How It Works:
User Input:
Users can input the starting date (Year, Month, and Day) from which the Fibonacci sequence will begin to be calculated.
This allows flexibility and customization based on the trader's analysis needs.
Calculation:
The starting date is converted into a timestamp in seconds.
For each bar on the chart, the number of days since the starting date is calculated.
The indicator checks if the current day matches any of the Fibonacci sequence days, the previous day, or the next day.
In this indicator, Fibonacci numbers can be displayed on the chart as plus and minus 2 days. For example, for the 145th day, signals start to appear as 143,144 and 145. This is due to dates that sometimes coincide with weekends and public holidays.
Marking the Chart:
When a match is found, a label is placed above the bar indicating the day number from the Fibonacci sequence.
These labels are colored blue with white text for easy visibility.
Usage:
This indicator can be used on any timeframe and market to help identify potential areas where price might react.
It is especially useful for those who employ Fibonacci analysis in their trading strategy.
Example:
If the starting date is January 1, 2020, the indicator will mark significant Fibonacci days (e.g., 1, 3, 5, 8 days, etc.) on the chart from this date onward.
Community Guidelines Compliance:
This indicator adheres to TradingView's Pine Script community guidelines.
It provides customizable user inputs and does not violate any terms of use.
By using the FiboSequ indicator, traders can enhance their technical analysis by incorporating time-based Fibonacci levels, potentially leading to better market timing and decision-making.
Frequently Asked Questions (FAQ)
Q: What is the FiboSequ indicator?
A: The FiboSequ indicator is a technical analysis tool that marks significant days on a price chart based on the Fibonacci sequence. This indicator helps traders identify potential turning points or areas of interest in the market.
Q: What is the Fibonacci sequence and why is it important?
A: The Fibonacci sequence is a series of numbers where each number is the sum of the two preceding ones. The first two numbers are 0 and 1. This sequence frequently appears in nature and financial markets and is used in technical analysis to identify important support and resistance levels.
Q: How do the Fibonacci time zones in the indicator work?
A: Fibonacci time zones are used to identify potential market turning points at specific time intervals. The indicator calculates days based on the Fibonacci sequence (e.g., 1, 3, 5, 8 days, etc.) from the starting date and marks them on the chart.
Q: How can users set the starting date?
A: Users can input the starting date by specifying the year, month, and day. This sets the date from which the indicator begins its calculations, providing flexibility for user analysis.
Q: What do the labels in the indicator represent?
A: The labels mark specific days in the Fibonacci sequence. For example, 1st day, 3rd day, 5th day, etc. These labels are displayed in blue with white text for easy visibility.
Q: Which timeframes can I use the FiboSequ indicator on?
A: The FiboSequ indicator can be used on any timeframe. This includes daily, weekly, or monthly charts, as well as shorter timeframes.
Q: Which markets can the FiboSequ indicator be used in?
A: The FiboSequ indicator can be used in various financial markets, including stocks, forex, cryptocurrencies, commodities, and more.
Q: How can I achieve better market timing with the FiboSequ indicator?
A: The FiboSequ indicator helps identify potential market turning points using time-based Fibonacci levels. This can lead to better market timing and more informed trading decisions for traders.
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