Session-Based Sentiment Oscillator [TradeDots]

Track, analyze, and monitor market sentiment across global trading sessions with this advanced multi-session sentiment analysis tool. This script provides session-specific sentiment readings for Asian (Tokyo), European (London), and US (New York) markets, combining price action, volume analysis, and volatility factors into a comprehensive sentiment oscillator. It is an original indicator designed to help traders understand regional market psychology and capitalize on cross-session sentiment shifts directly on TradingView.

📝 HOW IT WORKS

1. Multi-Component Sentiment Engine
Price Action Momentum: Calculates normalized price movement relative to recent trading ranges, providing directional sentiment readings.
Volume-Weighted Analysis: When volume data is available, incorporates volume flow direction to validate price-based sentiment signals.
Volatility-Adjusted Factors: Accounts for changing market volatility conditions by comparing current ATR against historical averages.
Weighted Combination: Merges all components using optimized weightings (Price: 1.0, Volume: 0.3, Volatility: 0.2) for balanced sentiment readings.

2. Session-Segregated Tracking
Automatic Session Detection: Precisely identifies active trading sessions based on user-configured time parameters.
Independent Calculations: Maintains separate sentiment accumulation for each major session, updated only during respective active hours.
Historical Preservation: Stores session-specific sentiment values even when sessions are closed, enabling cross-session comparison.
Real-Time Updates: Continuously processes sentiment during active sessions while preserving inactive session data.

3. Cross-Session Transition Analysis
Sentiment Differential Detection: Monitors sentiment changes when transitioning between trading sessions.
Configurable Thresholds: Generates signals only when sentiment shifts exceed user-defined minimum thresholds.
Directional Signals: Provides distinct bullish and bearish transition alerts with visual markers.
Smart Filtering: Applies smoothing algorithms to reduce false signals from minor sentiment variations.

⚙️ KEY FEATURES

1. Session-Specific Dashboard
Real-Time Status Display: Shows current session activity (ACTIVE/CLOSED) for all three major sessions.
Sentiment Percentages: Displays precise sentiment readings as percentages for easy interpretation.
Strength Classification: Automatically categorizes sentiment as HIGH (>50%), MEDIUM (20-50%), or LOW (<20%).
Customizable Positioning: Place dashboard in any corner with adjustable size options.

2. Advanced Signal Generation
Transition Alerts: Triangle markers indicate significant sentiment shifts between sessions.
Extreme Conditions: Diamond markers highlight overbought/oversold threshold breaches.
Configurable Sensitivity: Adjust signal thresholds from 0.05 to 0.50 based on trading style.
Alert Integration: Built-in TradingView alert conditions for automated notifications.

3. Forex Currency Strength Analysis
Base/Quote Decomposition: For forex pairs, separates sentiment into individual currency strength components.
Major Currency Support: Analyzes USD, EUR, GBP, JPY, CHF, CAD, AUD, NZD strength relationships.
Relative Strength Display: Shows which currency is driving pair movement during active sessions.

4. Visual Enhancement System
Session Background Colors: Distinct background shading for each active trading session.
Overbought/Oversold Zones: Configurable extreme sentiment level visualization with colored zones.
Multi-Timeframe Compatibility: Works across all timeframes while maintaining session accuracy.
Customizable Color Schemes: Full color customization for dashboard, signals, and plot elements.

🚀 HOW TO USE IT

1. Add the Script
Search for "Session-Based Sentiment Oscillator [TradeDots]" in the Indicators tab or manually add it to your chart. The indicator will appear in a separate pane below your main chart.

2. Configure Session Times
Asian Session: Set Tokyo market hours (default: 00:00-09:00) based on your chart timezone.
European Session: Configure London market hours (default: 07:00-16:00) for European analysis.
US Session: Define New York market hours (default: 13:00-22:00) for American markets.
Timezone Adjustment: Ensure session times match your broker's specifications and account for daylight saving changes.

3. Optimize Analysis Parameters
Sentiment Period: Choose 5-50 bars (default: 14) for sentiment calculation lookback period.
Smoothing Settings: Select 1-10 bars smoothing (default: 3) with SMA, EMA, or RMA options.
Component Selection: Enable/disable volume analysis, price action, and volatility factors based on available data.
Signal Sensitivity: Adjust threshold from 0.05-0.50 (default: 0.15) for transition signal generation.

4. Interpret Readings and Signals
Positive Values: Indicate bullish sentiment for the active session.
Negative Values: Suggest bearish sentiment conditions.
Dashboard Status: Monitor which session is currently active and their respective sentiment strengths.
Transition Signals: Watch for triangle markers indicating significant cross-session sentiment changes.
Extreme Alerts: Note diamond markers when sentiment reaches overbought (>70%) or oversold (<-70%) levels.

5. Set Up Alerts
Configure TradingView alerts for:
- Bullish session transitions
- Bearish session transitions
- Overbought condition alerts
- Oversold condition alerts

❗️LIMITATIONS

1. Data Dependency
Volume Requirements: Volume-based analysis only functions when volume data is provided by your broker. Many forex brokers do not supply reliable volume data.
Price Action Focus: In absence of volume data, sentiment calculations rely primarily on price movement and volatility factors.

2. Session Time Sensitivity
Manual Adjustment Required: Session times must be manually updated for daylight saving time changes.
Broker Variations: Different brokers may have slightly different session definitions requiring time parameter adjustments.

3. Ranging Market Limitations
Trend Bias: Sentiment calculations may be less reliable during extended sideways or low-volatility market conditions.
Lag Consideration: As with all sentiment indicators, readings may lag during rapid market transitions.

4. Regional Market Focus
Major Session Coverage: Designed primarily for major global sessions; may not capture sentiment from smaller regional markets.
Weekend Gaps: Does not account for weekend gap effects on sentiment calculations.

⚠️ RISK DISCLAIMER

Trading and investing carry significant risk and can result in financial loss. The "Session-Based Sentiment Oscillator [TradeDots]" is provided for informational and educational purposes only. It does not constitute financial advice.

- Always conduct your own research and analysis
- Use proper risk management and position sizing in all trades
- Past sentiment patterns do not guarantee future market behavior
- Combine this indicator with other technical and fundamental analysis tools
- Consider overall market context and your personal risk tolerance

This script is an original creation by TradeDots, published under the Mozilla Public License 2.0.

Session-based sentiment analysis should be used as part of a comprehensive trading strategy. No single indicator can predict market movements with certainty. Exercise proper risk management and maintain realistic expectations about indicator performance across varying market conditions.