Two-Pole Oscillator [BigBeluga]

The Two-Pole Oscillator is an advanced smoothing oscillator designed to provide traders with precise market signals by leveraging deviation-based calculations combined with a unique two-pole filtering technique. It offers clear visual representation and actionable signals for smart trading decisions.

🔵Key Features:

• Two-Pole Filtering: Smooths out the main oscillator signal to reduce noise, providing a cleaner and more reliable view of market momentum and trend strength.
  

  // Two-pole smooth filter functionf_two_pole_filter(source, length) =>    var float smooth1 = na    var float smooth2 = na    alpha = 2.0 / (length + 1)    if na(smooth1)        smooth1 := source    else        smooth1 := (1 - alpha) * smooth1 + alpha * source    if na(smooth2)        smooth2 := smooth1    else        smooth2 := (1 - alpha) * smooth2 + alpha * smooth1

  
• Deviation-Based Oscillator: Utilizes price deviations from the mean to generate dynamic signals, making it ideal for detecting overbought and oversold conditions.
  

  float sma1   = ta.sma(close, 25)float sma_n1 = ((close - sma1) - ta.sma(close - sma1, 25)) / ta.stdev(close - sma1, 25)

• Signal Gradient Strength: Signals on the main oscillator line feature gradient coloring based on their proximity to the 0 level:
  ➔ Closer to 0: More transparent, indicating weaker signals.➔ Closer to 1 or -1: Less transparent, highlighting stronger signals.
• Level-Based Signal Validation: Parallel levels are plotted on the chart for each signal:
  ➔ If a level is crossed by price, the signal is invalidated, marked by an "X" at the invalidation point.
  Trend Continuation
  
• Invalidation Levels: Serve as potential stop-loss or trade-reversal zones, enabling traders to make more informed and disciplined trading decisions.
  
• Dynamic Chart Plotting: Signals are plotted directly on the chart with corresponding levels, providing a comprehensive visual representation for easy interpretation.
  

🔵How It Works:

• The oscillator calculates price deviation from a mean value and applies two-pole filtering to smooth the resulting signal.
  
• Gradient-colored signals reflect their strength, with transparency indicating proximity to the 0 level on the oscillator scale.
  
• Buy and sell signals are generated based on crossovers and crossunders of the oscillator line with a signal line.
  
• If a level is crossed, the corresponding signal is marked with a "X" plotted on the chart at the crossover point.
  

🔵Use Cases:

• Detecting overbought or oversold market conditions with a smoother, noise-free oscillator.
  
• Using invalidation levels to set clear stop-loss or trade exit points.
  
• Identifying strong momentum signals and filtering out weaker, less reliable ones.
  
• Combining oscillator signals with price action for more precise trade entries and exits.
  

This indicator is perfect for traders seeking a refined approach to oscillator analysis, combining signal strength visualization with actionable invalidation levels to enhance trading precision and strategy.