OPEN-SOURCE SCRIPT
Mean Reversion with Volume Profile
Aggiornato
Script Name: Mean Reversion with Volume Profile
Short Name: MRVP
Author: piligrimius82
Version: 1.0
Date: 01/05/2025
1. Overview
The Mean Reversion with Volume Profile (MRVP) indicator is a powerful tool designed to identify potential trading opportunities based on the principle of mean reversion, enhanced with insights from volume profile analysis. This indicator combines several popular technical indicators, including Bollinger Bands, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic Oscillator, along with a custom-calculated Volume Profile to pinpoint high-probability reversal zones.
Mean reversion is a theory suggesting that prices and returns eventually move back towards the mean or average. This indicator helps traders identify when an asset's price has deviated significantly from its average and may be poised for a reversal. The inclusion of Volume Profile adds another layer of confirmation, providing insights into significant price levels based on trading volume.
2. Key Features
Multiple Indicator Integration: Combines Bollinger Bands, RSI, MACD, and Stochastic Oscillator for comprehensive overbought/oversold analysis.
Advanced Volume Profile Calculation: Calculates and displays the Point of Control (POC) based on historical volume data, highlighting significant price levels.
Customizable Parameters: Offers adjustable settings for all indicators, allowing traders to fine-tune the indicator to their specific trading style and market conditions.
Visual Alerts: Provides optional background color changes to visually highlight potential buy and sell zones.
Alert Conditions: Includes built-in alert conditions for mean reversion buy and sell signals, enabling traders to receive notifications when potential opportunities arise.
Optimized for higher time frames: It is recommended that this script be used on a 4-hour time frame or higher.
3. How it Works
The MRVP indicator identifies potential mean reversion opportunities by analyzing price action in conjunction with volume data.
3.1. Mean Reversion Signals:
Overbought Conditions: When the price moves above the upper Bollinger Band, the RSI exceeds the overbought threshold (default 70), and the Stochastic Oscillator is also in the overbought zone (default 80), a potential sell signal is generated.
Oversold Conditions: When the price moves below the lower Bollinger Band, the RSI falls below the oversold threshold (default 30), and the Stochastic Oscillator is in the oversold zone (default 20), a potential buy signal is generated.
3.2. Volume Profile (Point of Control - POC):
The indicator calculates the Volume Profile over a user-defined lookback period.
It determines the Point of Control (POC), which is the price level with the highest traded volume within that period.
The POC is plotted as a prominent visual marker on the chart, representing a significant level of support or resistance.
3.3. Combined Analysis:
The indicator encourages traders to look for confluence between mean reversion signals (from Bollinger Bands, RSI, and Stochastic) and the POC.
For example, a price rejection at a high volume node near the upper Bollinger Band could signal a strong mean reversion opportunity.
The MACD indicator is used to further confirm the trend's momentum.
4. Input Parameters
The following parameters can be customized within the indicator settings:
4.1. Bollinger Bands:
bbLength (default: 20): The length (number of periods) used for calculating the Bollinger Bands.
bbStdDev (default: 2.0): The standard deviation multiplier used to determine the width of the bands.
4.2. Relative Strength Index (RSI):
rsiLength (default: 14): The length (number of periods) used for calculating the RSI.
rsiOverbought (default: 70): The RSI level considered overbought.
rsiOversold (default: 30): The RSI level considered oversold.
4.3. Moving Average Convergence Divergence (MACD):
macdFastLength (default: 12): The length of the fast-moving average.
macdSlowLength (default: 26): The length of the slow-moving average.
macdSignalLength (default: 9): The length of the signal line.
4.4. Stochastic Oscillator:
stochLength (default: 14): The length (number of periods) used for calculating the Stochastic Oscillator.
stochK (default: 3): The smoothing period for the %K line.
stochD (default: 3): The smoothing period for the %D line.
stochOverbought (default: 80): The Stochastic level considered overbought.
stochOversold (default: 20): The Stochastic level considered oversold.
4.5. Volume Profile:
vpLength (default: 200): The lookback period (number of bars) used for calculating the Volume Profile. It is recommended to use higher values, especially on higher timeframes.
5. How to Use
Add to Chart: Add the "Mean Reversion with Volume Profile (MRVP)" indicator to your TradingView chart.
Customize Inputs (Optional): Adjust the input parameters to your preferred settings.
Observe Signals: Watch for potential buy (oversold) and sell (overbought) signals generated by the combination of indicators.
Consider the POC: Pay attention to the Point of Control (POC) plotted on the chart. Price reactions near the POC can provide valuable trading insights.
Confirm with Other Analysis: Use the MRVP indicator in conjunction with other technical analysis techniques and your overall trading strategy.
6. Important Considerations
No Guarantee of Profit: Like any trading indicator, the MRVP indicator does not guarantee profits and should not be used as the sole basis for trading decisions.
Backtesting and Optimization: It is highly recommended to backtest the indicator with different parameter settings on historical data to evaluate its performance and optimize it for specific assets and timeframes.
Risk Management: Always implement proper risk management techniques, such as setting stop-loss orders, to limit potential losses.
Market Conditions: The effectiveness of mean reversion strategies can vary depending on market conditions. They tend to perform better in range-bound markets and may be less effective in strongly trending markets.
Higher Timeframes: Due to the nature of Volume Profile calculations, using this indicator on higher timeframes (e.g., 4-hour, daily) is generally recommended for more reliable signals.
7. Disclaimer
This indicator is for educational and informational purposes only and should not be considered financial advice. Trading involves risk, and past performance is not indicative of future results. 1 Always conduct your own 2 thorough research and due diligence before making any trading decisions.
Short Name: MRVP
Author: piligrimius82
Version: 1.0
Date: 01/05/2025
1. Overview
The Mean Reversion with Volume Profile (MRVP) indicator is a powerful tool designed to identify potential trading opportunities based on the principle of mean reversion, enhanced with insights from volume profile analysis. This indicator combines several popular technical indicators, including Bollinger Bands, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic Oscillator, along with a custom-calculated Volume Profile to pinpoint high-probability reversal zones.
Mean reversion is a theory suggesting that prices and returns eventually move back towards the mean or average. This indicator helps traders identify when an asset's price has deviated significantly from its average and may be poised for a reversal. The inclusion of Volume Profile adds another layer of confirmation, providing insights into significant price levels based on trading volume.
2. Key Features
Multiple Indicator Integration: Combines Bollinger Bands, RSI, MACD, and Stochastic Oscillator for comprehensive overbought/oversold analysis.
Advanced Volume Profile Calculation: Calculates and displays the Point of Control (POC) based on historical volume data, highlighting significant price levels.
Customizable Parameters: Offers adjustable settings for all indicators, allowing traders to fine-tune the indicator to their specific trading style and market conditions.
Visual Alerts: Provides optional background color changes to visually highlight potential buy and sell zones.
Alert Conditions: Includes built-in alert conditions for mean reversion buy and sell signals, enabling traders to receive notifications when potential opportunities arise.
Optimized for higher time frames: It is recommended that this script be used on a 4-hour time frame or higher.
3. How it Works
The MRVP indicator identifies potential mean reversion opportunities by analyzing price action in conjunction with volume data.
3.1. Mean Reversion Signals:
Overbought Conditions: When the price moves above the upper Bollinger Band, the RSI exceeds the overbought threshold (default 70), and the Stochastic Oscillator is also in the overbought zone (default 80), a potential sell signal is generated.
Oversold Conditions: When the price moves below the lower Bollinger Band, the RSI falls below the oversold threshold (default 30), and the Stochastic Oscillator is in the oversold zone (default 20), a potential buy signal is generated.
3.2. Volume Profile (Point of Control - POC):
The indicator calculates the Volume Profile over a user-defined lookback period.
It determines the Point of Control (POC), which is the price level with the highest traded volume within that period.
The POC is plotted as a prominent visual marker on the chart, representing a significant level of support or resistance.
3.3. Combined Analysis:
The indicator encourages traders to look for confluence between mean reversion signals (from Bollinger Bands, RSI, and Stochastic) and the POC.
For example, a price rejection at a high volume node near the upper Bollinger Band could signal a strong mean reversion opportunity.
The MACD indicator is used to further confirm the trend's momentum.
4. Input Parameters
The following parameters can be customized within the indicator settings:
4.1. Bollinger Bands:
bbLength (default: 20): The length (number of periods) used for calculating the Bollinger Bands.
bbStdDev (default: 2.0): The standard deviation multiplier used to determine the width of the bands.
4.2. Relative Strength Index (RSI):
rsiLength (default: 14): The length (number of periods) used for calculating the RSI.
rsiOverbought (default: 70): The RSI level considered overbought.
rsiOversold (default: 30): The RSI level considered oversold.
4.3. Moving Average Convergence Divergence (MACD):
macdFastLength (default: 12): The length of the fast-moving average.
macdSlowLength (default: 26): The length of the slow-moving average.
macdSignalLength (default: 9): The length of the signal line.
4.4. Stochastic Oscillator:
stochLength (default: 14): The length (number of periods) used for calculating the Stochastic Oscillator.
stochK (default: 3): The smoothing period for the %K line.
stochD (default: 3): The smoothing period for the %D line.
stochOverbought (default: 80): The Stochastic level considered overbought.
stochOversold (default: 20): The Stochastic level considered oversold.
4.5. Volume Profile:
vpLength (default: 200): The lookback period (number of bars) used for calculating the Volume Profile. It is recommended to use higher values, especially on higher timeframes.
5. How to Use
Add to Chart: Add the "Mean Reversion with Volume Profile (MRVP)" indicator to your TradingView chart.
Customize Inputs (Optional): Adjust the input parameters to your preferred settings.
Observe Signals: Watch for potential buy (oversold) and sell (overbought) signals generated by the combination of indicators.
Consider the POC: Pay attention to the Point of Control (POC) plotted on the chart. Price reactions near the POC can provide valuable trading insights.
Confirm with Other Analysis: Use the MRVP indicator in conjunction with other technical analysis techniques and your overall trading strategy.
6. Important Considerations
No Guarantee of Profit: Like any trading indicator, the MRVP indicator does not guarantee profits and should not be used as the sole basis for trading decisions.
Backtesting and Optimization: It is highly recommended to backtest the indicator with different parameter settings on historical data to evaluate its performance and optimize it for specific assets and timeframes.
Risk Management: Always implement proper risk management techniques, such as setting stop-loss orders, to limit potential losses.
Market Conditions: The effectiveness of mean reversion strategies can vary depending on market conditions. They tend to perform better in range-bound markets and may be less effective in strongly trending markets.
Higher Timeframes: Due to the nature of Volume Profile calculations, using this indicator on higher timeframes (e.g., 4-hour, daily) is generally recommended for more reliable signals.
7. Disclaimer
This indicator is for educational and informational purposes only and should not be considered financial advice. Trading involves risk, and past performance is not indicative of future results. 1 Always conduct your own 2 thorough research and due diligence before making any trading decisions.
Note di rilascio
Script Name: Mean Reversion with Volume ProfileShort Name: MRVP
Author: piligrimius82
Version: 1.0
Date: 01/05/2025
1. Overview
The Mean Reversion with Volume Profile (MRVP) indicator is a powerful tool designed to identify potential trading opportunities based on the principle of mean reversion, enhanced with insights from volume profile analysis. This indicator combines several popular technical indicators, including Bollinger Bands, Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic Oscillator, along with a custom-calculated Volume Profile to pinpoint high-probability reversal zones.
Mean reversion is a theory suggesting that prices and returns eventually move back towards the mean or average. This indicator helps traders identify when an asset's price has deviated significantly from its average and may be poised for a reversal. The inclusion of Volume Profile adds another layer of confirmation, providing insights into significant price levels based on trading volume.
2. Key Features
Multiple Indicator Integration: Combines Bollinger Bands, RSI, MACD, and Stochastic Oscillator for comprehensive overbought/oversold analysis.
Advanced Volume Profile Calculation: Calculates and displays the Point of Control (POC) based on historical volume data, highlighting significant price levels.
Customizable Parameters: Offers adjustable settings for all indicators, allowing traders to fine-tune the indicator to their specific trading style and market conditions.
Visual Alerts: Provides optional background color changes to visually highlight potential buy and sell zones.
Alert Conditions: Includes built-in alert conditions for mean reversion buy and sell signals, enabling traders to receive notifications when potential opportunities arise.
Optimized for higher time frames: It is recommended that this script be used on a 4-hour time frame or higher.
3. How it Works
The MRVP indicator identifies potential mean reversion opportunities by analyzing price action in conjunction with volume data.
3.1. Mean Reversion Signals:
Overbought Conditions: When the price moves above the upper Bollinger Band, the RSI exceeds the overbought threshold (default 70), and the Stochastic Oscillator is also in the overbought zone (default 80), a potential sell signal is generated.
Oversold Conditions: When the price moves below the lower Bollinger Band, the RSI falls below the oversold threshold (default 30), and the Stochastic Oscillator is in the oversold zone (default 20), a potential buy signal is generated.
3.2. Volume Profile (Point of Control - POC):
The indicator calculates the Volume Profile over a user-defined lookback period.
It determines the Point of Control (POC), which is the price level with the highest traded volume within that period.
The POC is plotted as a prominent visual marker on the chart, representing a significant level of support or resistance.
3.3. Combined Analysis:
The indicator encourages traders to look for confluence between mean reversion signals (from Bollinger Bands, RSI, and Stochastic) and the POC.
For example, a price rejection at a high volume node near the upper Bollinger Band could signal a strong mean reversion opportunity.
The MACD indicator is used to further confirm the trend's momentum.
4. Input Parameters
The following parameters can be customized within the indicator settings:
4.1. Bollinger Bands:
bbLength (default: 20): The length (number of periods) used for calculating the Bollinger Bands.
bbStdDev (default: 2.0): The standard deviation multiplier used to determine the width of the bands.
4.2. Relative Strength Index (RSI):
rsiLength (default: 14): The length (number of periods) used for calculating the RSI.
rsiOverbought (default: 70): The RSI level considered overbought.
rsiOversold (default: 30): The RSI level considered oversold.
4.3. Moving Average Convergence Divergence (MACD):
macdFastLength (default: 12): The length of the fast-moving average.
macdSlowLength (default: 26): The length of the slow-moving average.
macdSignalLength (default: 9): The length of the signal line.
4.4. Stochastic Oscillator:
stochLength (default: 14): The length (number of periods) used for calculating the Stochastic Oscillator.
stochK (default: 3): The smoothing period for the %K line.
stochD (default: 3): The smoothing period for the %D line.
stochOverbought (default: 80): The Stochastic level considered overbought.
stochOversold (default: 20): The Stochastic level considered oversold.
4.5. Volume Profile:
vpLength (default: 200): The lookback period (number of bars) used for calculating the Volume Profile. It is recommended to use higher values, especially on higher timeframes.
5. How to Use
Add to Chart: Add the "Mean Reversion with Volume Profile (MRVP)" indicator to your TradingView chart.
Customize Inputs (Optional): Adjust the input parameters to your preferred settings.
Observe Signals: Watch for potential buy (oversold) and sell (overbought) signals generated by the combination of indicators.
Consider the POC: Pay attention to the Point of Control (POC) plotted on the chart. Price reactions near the POC can provide valuable trading insights.
Confirm with Other Analysis: Use the MRVP indicator in conjunction with other technical analysis techniques and your overall trading strategy.
6. Important Considerations
No Guarantee of Profit: Like any trading indicator, the MRVP indicator does not guarantee profits and should not be used as the sole basis for trading decisions.
Backtesting and Optimization: It is highly recommended to backtest the indicator with different parameter settings on historical data to evaluate its performance and optimize it for specific assets and timeframes.
Risk Management: Always implement proper risk management techniques, such as setting stop-loss orders, to limit potential losses.
Market Conditions: The effectiveness of mean reversion strategies can vary depending on market conditions. They tend to perform better in range-bound markets and may be less effective in strongly trending markets.
Higher Timeframes: Due to the nature of Volume Profile calculations, using this indicator on higher timeframes (e.g., 4-hour, daily) is generally recommended for more reliable signals.
7. Disclaimer
This indicator is for educational and informational purposes only and should not be considered financial advice. Trading involves risk, and past performance is not indicative of future results. Always conduct your own thorough research and due diligence before making any trading decisions.
Script open-source
In pieno spirito TradingView, l'autore di questo script lo ha pubblicato open-source, in modo che i trader possano comprenderlo e verificarlo. Un saluto all'autore! È possibile utilizzarlo gratuitamente, ma il riutilizzo di questo codice in una pubblicazione è regolato dal nostro Regolamento. Per aggiungerlo al grafico, mettilo tra i preferiti.
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