Consecutive CandlesSummary
This indicator helps visualize short-term momentum by automatically drawing boxes around sequences of consecutive same-colored candles (bullish or bearish). It's designed to quickly highlight periods of sustained buying or selling pressure directly on your chart.
How it Works
Consecutive Candle Detection: The script monitors the chart bar by bar, tracking consecutive candles where close > open (bullish) or close < open (bearish).
Box Drawing: When a sequence of same-colored candles reaches a user-defined minimum length (default is 3) and this sequence is then broken by an opposite-colored candle or a doji, a box is drawn.
Box Boundaries:
The top of the box is set to the highest high price reached during the sequence.
The bottom of the box is set to the lowest low price reached during the sequence.
The left edge of the box aligns with the start time of the first candle in the sequence.
The right edge of the box aligns with the end time of the last candle in the sequence.
Stability: Uses xloc = xloc.bar_time to ensure boxes remain accurately anchored to the price bars when zooming or panning the chart.
Real-time Extension: For active sequences meeting the minimum length on the latest developing bar, the box is optionally extended to the right.
Features
Automatically identifies and boxes sequences of 3 or more (customizable) consecutive bullish candles.
Automatically identifies and boxes sequences of 3 or more (customizable) consecutive bearish candles.
Extends box in real-time for active qualifying sequences.
Customizable minimum candle count (>= 2).
Customizable colors for bullish/bearish boxes and borders.
Settings
You can customize the indicator via the Settings menu (gear icon):
Minimum Consecutive Candles: Define how many candles in a row are needed to draw a box (Default: 3).
Bullish Box Color: Set the fill color for boxes around bullish sequences.
Bearish Box Color: Set the fill color for boxes around bearish sequences.
Box Border Color: Set the color for the border of all boxes.
Potential Use Cases
Momentum Identification: Quickly spot periods of strong, uninterrupted buying or selling.
Exhaustion/Reversal Signals: Very long sequences might indicate potential exhaustion, setting up reversal opportunities.
Consolidation Breakouts: A box forming after a period of tight consolidation can highlight the range just before a potential breakout.
Confirmation: Use the boxes as confirmation for entries or exits based on momentum shifts.
Disclaimer: This indicator provides visual aids based on price action. It should not be used as a standalone trading system. Always use indicators in conjunction with your own analysis and risk management rules.
Momentumtrading
TriTrend Nexus[BullByte]TriTrend Nexus is a comprehensive market analysis tool that consolidates three well-established signals into a single, easy-to-read interface. It is designed to help traders quickly assess the market’s current condition and make more informed decisions about potential trend shifts.
Key Features and Functionality
Composite Signal System
Multi-Faceted Approach :
The indicator combines insights from three distinct market signals into one composite score. This approach provides a more holistic view of market conditions compared to relying on a single indicator.
Clear Classification :
Based on the composite score, TriTrend Nexus categorizes the market into:
Strong Signals : When all three underlying conditions are met, indicating a robust and established trend.
Early Signals : When two out of the three conditions are met, offering an early hint of a potential trend.
Neutral/Choppy : When conditions are ambiguous or conflicting, suggesting a lack of clear market direction.
Trend Qualifiers :
In addition to the composite score, the indicator subtly refines its signal by noting whether a trend is “Rising” or “Fading.” This further aids traders in understanding the momentum behind the signal.
Dynamic Signal Identification
Timely Alerts :
By analyzing the composite data in real time, the indicator quickly identifies when market conditions shift, offering early warning signals that help traders stay ahead of the market.
Adaptive Analysis :
The built-in signal assessment continuously monitors market changes. Whether the market is in the early stages of a move or firmly committed to a trend, TriTrend Nexus adapts its messaging to reflect the evolving conditions.
User-Friendly Dashboard
Integrated Display :
A customizable dashboard provides an at-a-glance summary of key metrics. Users can choose between a detailed view for comprehensive insights or a compact version for a streamlined experience.
Key Metrics Displayed :
Primary Signal : The overall market status, such as “Bullish Strong” or “Bearish Early.”
Composite Nexus Score : A numerical value representing the strength of the current market conditions.
Supporting Data : Essential values that help explain the current signal without overwhelming the trader.
Easy Interpretation :
The dashboard is designed with clarity in mind. Clear labeling and a consistent layout ensure that even traders new to composite indicators can quickly interpret the displayed information.
Visual Clarity and Aesthetic
Color-Coded Signals :
The indicator uses a vibrant color scheme to highlight market conditions:
Bright Green : Signifies a strong bullish trend.
Light Green : Indicates an emerging bullish trend.
Red : Represents a strong bearish trend.
Light Red/Pink : Denotes an early bearish signal.
Gray : Used when market conditions are neutral or choppy.
Graphical Enhancements :
The plotted oscillator visually reinforces the signal classifications with dynamic color transitions. Horizontal markers provide reference points to help traders easily compare the current readings against standard levels.
Customization Options
Adjustable Settings :
Traders can personalize the indicator by modifying input settings such as sensitivity thresholds and period lengths. This flexibility allows the tool to adapt to different market environments and trading styles.
Dashboard Flexibility :
The option to toggle between a full dashboard and a shorter version means that both novice and experienced traders can configure the display to best suit their needs. A more detailed dashboard offers extensive insights, while the compact mode provides a minimalist view for those who prefer simplicity.
Tailored User Experience :
With multiple adjustable parameters, users can fine-tune the indicator to respond precisely to their preferred timeframes and market conditions. This adaptability makes TriTrend Nexus a versatile tool for various trading strategies.
Benefits for Traders
Quick and Informed Decision-Making :
With a single glance at the dashboard and visual cues from the oscillator, traders can quickly gauge whether the market is poised for a strong move, is in the early stages of a trend, or is too volatile for clear signals. This helps in planning timely entries and exits.
Enhanced Market Insight :
By integrating multiple perspectives into one coherent score, the indicator filters out market noise and highlights the prevailing trend more reliably. This can be particularly useful during periods of market uncertainty.
Reduced Analysis Time:
The combination of clear, color-coded signals and an intuitive dashboard reduces the time spent analyzing various individual indicators, allowing traders to focus more on strategy execution.
Customization for Diverse Strategies :
The ability to adjust various input parameters and the dashboard layout ensures that traders can tailor the tool to fit their unique analysis style and market conditions, making it a versatile addition to any trading toolkit.
User-Friendly Interface :
Even for those who are not technically inclined, the clear visual design and straightforward signal descriptions make it easy to understand the current market situation without needing to interpret complex data.
Volume Block Order AnalyzerCore Concept
The Volume Block Order Analyzer is a sophisticated Pine Script strategy designed to detect and analyze institutional money flow through large block trades. It identifies unusually high volume candles and evaluates their directional bias to provide clear visual signals of potential market movements.
How It Works: The Mathematical Model
1. Volume Anomaly Detection
The strategy first identifies "block trades" using a statistical approach:
```
avgVolume = ta.sma(volume, lookbackPeriod)
isHighVolume = volume > avgVolume * volumeThreshold
```
This means a candle must have volume exceeding the recent average by a user-defined multiplier (default 2.0x) to be considered a significant block trade.
2. Directional Impact Calculation
For each block trade identified, its price action determines direction:
- Bullish candle (close > open): Positive impact
- Bearish candle (close < open): Negative impact
The magnitude of impact is proportional to the volume size:
```
volumeWeight = volume / avgVolume // How many times larger than average
blockImpact = (isBullish ? 1.0 : -1.0) * (volumeWeight / 10)
```
This creates a normalized impact score typically ranging from -1.0 to 1.0, scaled by dividing by 10 to prevent excessive values.
3. Cumulative Impact with Time Decay
The key innovation is the cumulative impact calculation with decay:
```
cumulativeImpact := cumulativeImpact * impactDecay + blockImpact
```
This mathematical model has important properties:
- Recent block trades have stronger influence than older ones
- Impact gradually "fades" at rate determined by decay factor (default 0.95)
- Sustained directional pressure accumulates over time
- Opposing pressure gradually counteracts previous momentum
Trading Logic
Signal Generation
The strategy generates trading signals based on momentum shifts in institutional order flow:
1. Long Entry Signal: When cumulative impact crosses from negative to positive
```
if ta.crossover(cumulativeImpact, 0)
strategy.entry("Long", strategy.long)
```
*Logic: Institutional buying pressure has overcome selling pressure, indicating potential upward movement*
2. Short Entry Signal: When cumulative impact crosses from positive to negative
```
if ta.crossunder(cumulativeImpact, 0)
strategy.entry("Short", strategy.short)
```
*Logic: Institutional selling pressure has overcome buying pressure, indicating potential downward movement*
3. Exit Logic: Positions are closed when the cumulative impact moves against the position
```
if cumulativeImpact < 0
strategy.close("Long")
```
*Logic: The original signal is no longer valid as institutional flow has reversed*
Visual Interpretation System
The strategy employs multiple visualization techniques:
1. Color Gradient Bar System:
- Deep green: Strong buying pressure (impact > 0.5)
- Light green: Moderate buying pressure (0.1 < impact ≤ 0.5)
- Yellow-green: Mild buying pressure (0 < impact ≤ 0.1)
- Yellow: Neutral (impact = 0)
- Yellow-orange: Mild selling pressure (-0.1 < impact ≤ 0)
- Orange: Moderate selling pressure (-0.5 < impact ≤ -0.1)
- Red: Strong selling pressure (impact ≤ -0.5)
2. Dynamic Impact Line:
- Plots the cumulative impact as a line
- Line color shifts with impact value
- Line movement shows momentum and trend strength
3. Block Trade Labels:
- Marks significant block trades directly on the chart
- Shows direction and volume amount
- Helps identify key moments of institutional activity
4. Information Dashboard:
- Current impact value and signal direction
- Average volume benchmark
- Count of significant block trades
- Min/Max impact range
Benefits and Use Cases
This strategy provides several advantages:
1. Institutional Flow Detection: Identifies where large players are positioning themselves
2. Early Trend Identification: Often detects institutional accumulation/distribution before major price movements
3. Market Context Enhancement: Provides deeper insight than simple price action alone
4. Objective Decision Framework: Quantifies what might otherwise be subjective observations
5. Adaptive to Market Conditions: Works across different timeframes and instruments by using relative volume rather than absolute thresholds
Customization Options
The strategy allows users to fine-tune its behavior:
- Volume Threshold: How unusual a volume spike must be to qualify
- Lookback Period: How far back to measure average volume
- Impact Decay Factor: How quickly older trades lose influence
- Visual Settings: Labels and line width customization
This sophisticated yet intuitive strategy provides traders with a window into institutional activity, helping identify potential trend changes before they become obvious in price action alone.
TrendPredator FOTrendPredator Fakeout Highlighter (FO)
The TrendPredator Fakeout Highlighter is designed to enhance multi-timeframe trend analysis by identifying key market behaviors that indicate trend strength, weakness, and potential reversals. Inspired by Stacey Burke’s trading approach, this tool focuses on trend-following, momentum shifts, and trader traps, helping traders capitalize on high-probability setups.
At its core, this indicator highlights peak formations—anchor points where price often locks in trapped traders before making decisive moves. These principles align with George Douglas Taylor’s 3-day cycle and Steve Mauro’s BTMM method, making the FO Highlighter a powerful tool for reading market structure. As markets are fractal, this analysis works on any timeframe.
How It Works
The TrendPredator FO highlights key price action signals by coloring candles based on their bias state on the current timeframe.
It tracks four major elements:
Breakout/Breakdown Bars – Did the candle close in a breakout or breakdown relative to the last candle?
Fakeout Bars (Trend Close) – Did the candle break a prior high/low and close back inside, but still in line with the trend?
Fakeout Bars (Counter-Trend Close) – Did the candle break a prior high/low, close back inside, and against the trend?
Switch Bars – Did the candle lose/ reclaim the breakout/down level of the last bar that closed in breakout/down, signalling a possible trend shift?
Reading the Trend with TrendPredator FO
The annotations in this example are added manually for illustration.
- Breakouts → Strong Trend
Multiple candles closing in breakout signal a healthy and strong trend.
- Fakeouts (Trend Close) → First Signs of Weakness
Candles that break out but close back inside suggest a potential slowdown—especially near key levels.
- Fakeouts (Counter-Trend Close) → Stronger Reversal Signal
Closing against the trend strengthens the reversal signal.
- Switch Bars → Momentum Shift
A shift in trend is confirmed when price crosses back through the last closed breakout candles breakout level, trapping traders and fuelling a move in the opposite direction.
- Breakdowns → Trend Reversal Confirmed
Once price breaks away from the peak formation, closing in breakdown, the trend shift is validated.
Customization & Settings
- Toggle individual candle types on/off
- Customize colors for each signal
- Set the number of historical candles displayed
Example Use Cases
1. Weekly Template Analysis
The weekly template is a core concept in Stacey Burke’s trading style. FO highlights individual candle states. With this the state of the trend and the developing weekly template can be evaluated precisely. The analysis is done on the daily timeframe and we are looking especially for overextended situations within a week, after multiple breakouts and for peak formations signalling potential reversals. This is helpful for thesis generation before a session and also for backtesting. The annotations in this example are added manually for illustration.
📈 Example: Weekly Template Analysis snapshot on daily timeframe
2. High Timeframe 5-Star Setup Analysis (Stacey Burke "ain't coming back" ACB Template)
This analysis identifies high-probability trade opportunities when daily breakout or down closes occur near key monthly levels mid-week, signalling overextensions and potentially large parabolic moves. Key signals for this are breakout or down closes occurring on a Wednesday. This is helpful for thesis generation before a session and also for backtesting. The annotations in this example are added manually for illustration. Also an indicator can bee seen on this chart shading every Wednesday to identify the signal.
📉 Example: High Timeframe Setup snapshot
3. Low Timeframe Entry Confirmation
FO helps confirm entry signals after a setup is identified, allowing traders to time their entries and exits more precisely. For this the highlighted Switch and/ or Fakeout bars can be highly valuable.
📊 Example (M15 Entry & Exit): Entry and Exit Confirmation snapshot
📊 Example (M5 Scale-In Strategy): Scaling Entries snapshot
The annotations in this examples are added manually for illustration.
Disclaimer
This indicator is for educational purposes only and does not guarantee profits.
None of the information provided shall be considered financial advice.
Users are fully responsible for their trading decisions and outcomes.
RSI & DPO support/resistanceThis indicator combines the Relative Strength Index (RSI) to identify overbought and oversold conditions with the Detrended Price Oscillator (DPO) to highlight support and resistance levels.
Unlike traditional indicators that display these metrics in a separate window, this tool integrates them directly onto the main price chart.
This allows for a more cohesive analysis, enabling traders to easily visualize the relationship between price movements and momentum indicators in one unified view.
How to Use It:
Identify Overbought and Oversold Conditions:
Look for RSI values above 70 to identify overbought conditions, suggesting a potential price reversal or pullback. Conversely, RSI values below 30 indicate oversold conditions, which may signal a potential price bounce or upward movement.
Analyze Support and Resistance Levels:
Observe the DPO lines on the main chart to identify key support and resistance levels. When the price approaches these levels, it can provide insights into potential price reversals or breakouts.
Combine Signals for Trading Decisions:
Use the RSI and DPO signals together to make informed trading decisions. For example, if the RSI indicates an overbought condition while the price is near a resistance level identified by the DPO, it may be a good opportunity to consider selling or taking profits.
Monitor Divergences:
Watch for divergences between the RSI and price movements. If the price is making new highs while the RSI is not, it could indicate weakening momentum and a potential reversal.
Set Alerts:
Consider setting alerts for when the RSI crosses above or below the overbought or oversold thresholds, or when the price approaches significant support or resistance levels indicated by the DPO.
Practice Risk Management:
Always use proper risk management techniques, such as setting stop-loss orders and position sizing, to protect your capital while trading based on these indicators.
By following these steps, traders can effectively utilize this indicator to enhance their market analysis and improve their trading strategies.
Momentum TrackerTo screen for momentum movers, one can filter for stocks that have made a noticeable move over a set period—this initial move defines the momentum or swing move. From this list of candidates, we can create a watchlist by selecting those showing a momentum pause, such as a pullback or consolidation, which later could set up for a continuation.
This Momentum Tracker Indicator serves as a study tool to visualize when stocks historically met these momentum conditions. It marks on the chart where a stock would have appeared on the screener, allowing us to review past momentum patterns and screener requirements.
Indicator Calculation
Bullish Momentum: Price is above the lowest point within the lookback period by the specified threshold percentage.
Bearish Momentum: Price is below the highest point within the lookback period by the specified threshold percentage.
The tool is customizable in terms of lookback period and percentage threshold to accommodate different trading styles and timeframes, allowing us to set criteria that align with specific hold times and momentum requirements.
Relative Strength and MomentumRelative Strength and Momentum Indicator
Unlock deeper market insights with the Relative Strength and Momentum Indicator—a powerful tool designed to help traders and investors identify the strongest stocks and sectors based on relative performance. This custom indicator displays essential information on relative strength and momentum for up to 15 different symbols, compared against a benchmark index, all within a clear and organized table format.
Key Features:
1. Customizable Inputs: Choose up to 15 symbols to compare, along with a benchmark index, allowing you to tailor the indicator to your trading strategy. The 'Lookback Period' input defines how many weeks of data are analyzed for relative strength and momentum.
2. Relative Strength Calculation: For each selected symbol, the indicator calculates the Relative Strength (RS) against the chosen benchmark. This RS is further refined using an exponential moving average (EMA) to smooth the results, providing a more stable trend overview.
3. Momentum Analysis: Momentum is determined by analyzing the rate of change in relative strength. The indicator calculates a momentum rank for each symbol, based on its relative strength’s improvement or deterioration.
4. Percentile Ranking System: Each symbol is assigned a percentile rank (from 1 to 100) based on its relative strength compared to the others. Similarly, momentum rankings are also assigned from 1 to 100, offering a clear understanding of which assets are outperforming or underperforming.
5. Visual Indicators:
a. Green: Signals improving or stable relative strength and momentum.
b. Red: Indicates declining relative strength or momentum.
c. Aqua: Highlights symbols performing well on both relative strength and momentum—ideal candidates for further analysis.
6. Two Clear Tables:
a. Relative Strength Rank Table: Displays weekly rankings of relative strength for each symbol.
b. Momentum Table: Shows momentum trends, helping you identify which symbols are gaining or losing strength.
7. Color-Coded for Easy Analysis: The tables are color-coded to make analysis quick and straightforward. A green color means the symbol is performing well in terms of relative strength or momentum, while red indicates weaker performance. Aqua marks symbols that are excelling in both areas.
Use Case:
a. Sector Comparison: Identify which sectors or indexes are showing both relative strength and momentum to pick high-potential stocks. This allows you to align with broader market trends for improved trade entries.
b. Stock Selection: Quickly compare symbols within the same sector to find the stronger performers.
Bitcoin Momentum StrategyThis is a very simple long-only strategy I've used since December 2022 to manage my Bitcoin position.
I'm sharing it as an open-source script for other traders to learn from the code and adapt it to their liking if they find the system concept interesting.
General Overview
Always do your own research and backtesting - this script is not intended to be traded blindly (no script should be) and I've done limited testing on other markets beyond Ethereum and BTC, it's just a template to tweak and play with and make into one's own.
The results shown in the strategy tester are from Bitcoin's inception so as to get a large sample size of trades, and potential returns have diminished significantly as BTC has grown to become a mega cap asset, but the script includes a date filter for backtesting and it has still performed solidly in recent years (speaking from personal experience using it myself - DYOR with the date filter).
The main advantage of this system in my opinion is in limiting the max drawdown significantly versus buy & hodl. Theoretically much better returns can be made by just holding, but that's also a good way to lose 70%+ of your capital in the inevitable bear markets (also speaking from experience).
In saying all of that, the future is fundamentally unknowable and past results in no way guarantee future performance.
System Concept:
Capture as much Bitcoin upside volatility as possible while side-stepping downside volatility as quickly as possible.
The system uses a simple but clever momentum-style trailing stop technique I learned from one of my trading mentors who uses this approach on momentum/trend-following stock market systems.
Basically, the system "ratchets" up the stop-loss to be much tighter during high bearish volatility to protect open profits from downside moves, but loosens the stop loss during sustained bullish momentum to let the position ride.
It is invested most of the time, unless BTC is trading below its 20-week EMA in which case it stays in cash/USDT to avoid holding through bear markets. It only trades one position (no pyramiding) and does not trade short, but can easily be tweaked to do whatever you like if you know what you're doing in Pine.
Default parameters:
HTF: Weekly Chart
EMA: 20-Period
ATR: 5-period
Bar Lookback: 7
Entry Rule #1:
Bitcoin's current price must be trading above its higher-timeframe EMA (Weekly 20 EMA).
Entry Rule #2:
Bitcoin must not be in 'caution' condition (no large bearish volatility swings recently).
Enter at next bar's open if conditions are met and we are not already involved in a trade.
"Caution" Condition:
Defined as true if BTC's recent 7-bar swing high minus current bar's low is > 1.5x ATR, or Daily close < Daily 20-EMA.
Trailing Stop:
Stop is trailed 1 ATR from recent swing high, or 20% of ATR if in caution condition (ie. 0.2 ATR).
Exit on next bar open upon a close below stop loss.
I typically use a limit order to open & exit trades as close to the open price as possible to reduce slippage, but the strategy script uses market orders.
I've never had any issues getting filled on limit orders close to the market price with BTC on the Daily timeframe, but if the exchange has relatively low slippage I've found market orders work fine too without much impact on the results particularly since BTC has consistently remained above $20k and highly liquid.
Cost of Trading:
The script uses no leverage and a default total round-trip commission of 0.3% which is what I pay on my exchange based on their tier structure, but this can vary widely from exchange to exchange and higher commission fees will have a significantly negative impact on realized gains so make sure to always input the correct theoretical commission cost when backtesting any script.
Static slippage is difficult to estimate in the strategy tester given the wide range of prices & liquidity BTC has experienced over the years and it largely depends on position size, I set it to 150 points per buy or sell as BTC is currently very liquid on the exchange I trade and I use limit orders where possible to enter/exit positions as close as possible to the market's open price as it significantly limits my slippage.
But again, this can vary a lot from exchange to exchange (for better or worse) and if BTC volatility is high at the time of execution this can have a negative impact on slippage and therefore real performance, so make sure to adjust it according to your exchange's tendencies.
Tax considerations should also be made based on short-term trade frequency if crypto profits are treated as a CGT event in your region.
Summary:
A simple, but effective and fairly robust system that achieves the goals I set for it.
From my preliminary testing it appears it may also work on altcoins but it might need a bit of tweaking/loosening with the trailing stop distance as the default parameters are designed to work with Bitcoin which obviously behaves very differently to smaller cap assets.
Good luck out there!
ADX Momentum Shaded CandlesDescription:
The "ADX Momentum Shaded Candles" indicator (ADXMSC) is an overlay indicator that enhances candlestick charts by adding shading based on the momentum derived from the Average Directional Index (ADX). This indicator provides visual cues about the strength of bullish and bearish momentum by adjusting the transparency of the candlesticks.
How it Works:
The indicator utilizes the ADX indicator to calculate the values of +DI (Directional Indicator Plus) and -DI (Directional Indicator Minus) based on user-defined parameters. It then determines the transparency levels for the bullish and bearish candlesticks based on the calculated values of +DI and -DI. Higher values of +DI or -DI result in lower transparency levels, while lower values increase transparency.
Transparency Calculation:
The transparency of the bullish and bearish candlesticks is adjusted based on the values of +DI and -DI, which reflect the momentum of the price movement. Transparency is inversely proportional to these values, with higher values resulting in lower transparency. To calculate transparency, the indicator uses the formula 100 minus the value of +DI or -DI multiplied by 2. This ensures that higher values of +DI or -DI produce more opaque candlesticks.
Usage:
To effectively use the "ADX Momentum Shaded Candles" indicator (ADXMSC), follow these steps:
1. Apply the indicator to your chart by adding it from the available indicators.
2. Observe the candlesticks on the chart:
- Bullish candlesticks are represented by the original bullish color with adjusted transparency.
- Bearish candlesticks are represented by the original bearish color with adjusted transparency.
3. Analyze the transparency levels of the candlesticks to assess the strength of bullish and bearish momentum. Less transparent candlesticks indicate stronger momentum, while more transparent ones suggest weaker momentum.
4. Combine the visual information from the shaded candlesticks with other technical analysis tools, such as support and resistance levels, trend lines, or oscillators, to confirm potential trade opportunities.
5. Customize the indicator's parameters, such as the ADX length and smoothing, to suit your trading preferences.
6. Implement appropriate risk management strategies, including setting stop-loss orders and position sizing, to manage your trades effectively and protect your capital.
Dynamo
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Overview
Dynamo is built to be the Swiss-knife for price-movement & strength detection, it aims to provide a holistic view of the current price across multiple dimensions. This is achieved by combining 3 very specific indicators(RSI, Stochastic & ADX) into a single view. Each of which serve a different purpose, and collectively provide a simple, yet powerful tool to gauge the true nature of price-action.
Background
Dynamo uses 3 technical analysis tools in conjunction to provide better insights into price movement, they are briefly explained below:
Relative Strength Index(RSI)
RSI is a popular indicator that is often used to measure the velocity of price change & the intensity of directional moves. RSI computes the relative strength of the current price by comparing the security’s bullish strength versus bearish strength for a given period, i.e. by comparing average gain to average loss.
It is a range bound(0-100) variable that generates a bullish reading if average gain is higher, and a bullish reading if average loss is higher. Values over 50 are generally considered bullish & values less than 50 indicate a bearish market. Values over 70 indicate an overbought condition, and values below 30 indicate oversold condition.
Stochastic
Stochastic is an indicator that aims to measure the momentum in the market, by comparing most recent closing price of the security to its price range for a given period. It is based on the assumption that price tends to close near the recent high in an up trend, and it closes near the recent low during a down trend.
It is also range bound(0-100), values over 80 indicate overbought condition and values below 20 indicate oversold condition.
Average Directional Index(ADX)
ADX is an indicator that can quantify trend strength, it is derived from two underlying indices, known as Directional Movement Index(DMI). +DMI represents strength of the up trend, and -DMI represents strength of the down trend, and ADX is the average of the two.
ADX is non-directional or trend-neutral, which means, it does not follow the direction of the price, instead ADX will rise only when there is a strong trend, it does not matter if it’s an up trend or a down trend. Typical ranges of ADX are 25-50 for a strong trend, anything below 25 is considered as no trend or weak trend. ADX can frequently shoot upto higher values, but it generally finds exhaustion levels around the 60-75 range.
About the script
All these indicators are very powerful tools, but just like any other indicator they have their limitations. Stochastic & ADX can generate false signals in volatile markets, meaning price wouldn’t always follow through with what’s being indicated. ADX may even fail to generate a signal in less volatile markets, simply because it is based on moving averages, it tends to react slower to price changes. RSI can also lose it’s effectiveness when markets are trending strong, as it can stay in the overbought or oversold ranges for an extended period of time.
Dynamo aims to provide the trader with a much broader perspective by bringing together these contrasting indicators into a single simplified view. When Stochastic becomes less reliable in highly volatile conditions, one can cross validate their deduction by looking at RSI patterns. When RSI gets stuck in overbought or oversold range, one can refer to ADX to get better picture about the current trend. Similarly, various combinations of rules & setups can be formulated to get a more deterministic view, when working with either of these indicators.
There many possible use cases for a tool like this, and it totally depends on how you want to use it. An obvious option is to use it to trigger signals only after it has been confirmed by two or more indicators, for example, RSI & Stochastic make a great combination for cross-over or cross-under strategies. Some of the other options include trend detection, strength detection, reversals or price rejection points, possible duration of a trend, and all of these can very easily be translated into effective entry and exit points for trades.
How to use it
Dynamo is an easy-to-use tool, just add it to your chart and you’re good to start with your market analysis. Output consists of three overlapping plots, each of which tackle price movement from a slightly different angle.
Stochastic: A momentum indicator that plots the current closing price in relation to the price-range over a given period of time.
Can be used to detect the direction of the price movement, potential reversals, or duration of an up/down move.
Plotted as grey coloured histograms in the background.
Relative Strength Index(RSI): RSI is also a momentum indicator that measures the velocity with which the price changes.
Can be used to detect the speed of the price movement, RSI divergences can be a nice way to detect directional changes.
Plotted as an aqua coloured line.
Average Directional Index(ADX): ADX is an indicator that is used to measure the strength of the current trend.
Can be used to measure how strong the price movement is, both up and down, or to establish long terms trends.
Plotted as an orange coloured line.
Features
Provides a well-rounded view of the market movement by amalgamating some of the best strength indicators, helping traders make better informed decisions with minimal effort.
Simplistic plots that aim to convey clean signals, as a result, reducing clutter on the chart, and hopefully in the trader's head too.
Combines different types of indicators into a single view, which leads to an optimised use of the precious screen real-estate.
Final Note
Dynamo is designed to be minimalistic in functionality and in appearance, as it is being built to be a general purpose tool that is not only beginner friendly, but can also be highly-configurable to meet the needs of pro traders.
Thresholds & default values for the indicators are only suggestions based on industry standards, they may not be an exact match for all markets & conditions. Hence, it is advisable for the user to test & adjust these values according their securities and trading styles.
The chart highlights one of many possible setups using this tool, and it can used to create various types of setups & strategies, but it is also worth noting that the usability & the effectiveness of this tool also depends on the user’s understanding & interpretation of the underlying indicators.
Lastly, this tool is only an indicator and should only be perceived that way. It does not guarantee anything, and the user should do their own research before committing to trades based on any indicator.
Momentum Scalping & Swing Signals With AlertsThis Momentum indicator shows a green or red ribbon when smoothed momentum is bullish or bearish. It also includes a long moving average for overall trend confirmation. Wait until the ribbon holds above or below the long moving average and take positions in that direction.
To get an easier to read momentum indicator, I smoothed the momentum out and paired it next to a short term RMA. These two together form the ribbon that will show you early reversals and trend direction. The long moving average is used as an overall trend detector and confirmation for longer term trends.
***HOW TO USE***
Scalping: Enter longs when the ribbon turns green and enter shorts when the ribbon turns red. Exit positions when the ribbon turns the opposite color or crosses the long moving average.
Swing Trading: When the ribbon holds above the long moving average or breaks out and retests it, look for long positions and exit when the ribbon turns red or crosses the long moving average. When the ribbon holds below the long moving average or breaks down and retests it, look for short positions and exit when the ribbon turns green or crosses the long moving average.
***DETAILS***
This indicator gives early reversal signals very well and waiting for the momentum ribbon to cross the long moving average helps to get you into positions when the market is ready to really move while filtering out some of the noise.
The ribbon and background will change to green or red depending on whether it is currently bullish or bearish.
There is also a label that changes colors and tells you if momentum is bullish or bearish and also whether the momentum ribbon is above or below the long moving average.
Green or red circles will appear on the indicator when there is a bullish or bearish cross of the momentum ribbon and the long moving average.
It includes alerts that trigger when momentum is turning bullish/bearish or when the momentum ribbon is crossing the long moving average.
***CUSTOMIZATION***
Each piece of this indicator can be customized to suit your preferences including the momentum source, length, smoothing length, short moving average length and long moving average length. You can also turn off the labels, signals and long moving average. All of these settings can be managed within the indicator settings input tab.
***MARKETS***
This indicator can be used as a signal on all markets, including stocks, crypto, futures and forex.
***TIMEFRAMES***
This Momentum Scalping & Swing Signals indicator can be used on all timeframes.
***TIPS***
Try using numerous indicators of ours on your chart so you can instantly see the bullish or bearish trend of multiple indicators in real time without having to analyze the data. Some of our favorites are Trend Friend Scalp & Swing Trade Signals, Volume Spike Scanner, Buy & Sell Pressure Volume Profile, and RSI Scalper in combination with this momentum indicator. They all have real time Bullish and Bearish labels as well so you can immediately understand each indicator's trend.
Trend & Momentum V2Declutter your charts. Simple indicator combining trend and momentum using Moving Average (currently default to 9-day EMA) and RSI (default length of 8). A long signal is generated when the price closes above the moving average and the moving average color turns red to green which indicated that the momentum measured using RSI is greater than 50. A short signal is generated when the price closes below the moving average and the moving average color turns green to red indicating RSI is below 50. Confirmation is done if there is no reversal on the next candle. For best results use multiple timeframe charts to trade on the right side of trend and momentum.
Momentum With Bullish & Bearish LabelMOMENTUM WITH BULLISH AND BEARISH SIGNALS
This is a momentum oscillator that paints red or green depending on whether Momentum is above or below the zero line. It includes a label on the right hand side that will reflect the bullish or bearish direction of the current momentum by changing colors to red or green and text telling you Bullish or Bearish.
***HOW TO USE***
When Momentum is above zero, it is bullish. When Momentum is below zero it is bearish.
A label on the right side will update in real time to tell you if momentum is Bullish or Bearish for faster recognition of the trend.
When momentum is above the zero line(Bullish) but trending downward, a second label will show up in purple to notify you of a change in momentum direction.
When momentum is below the zero line(Bearish) but trending upward, a second label will show up in purple to notify you of a change in momentum direction.
This indicator was built to help you quickly identify the Bullish or Bearish nature of the current Momentum using colors as well as a live color changing label so you can glance at the label and understand it's direction without analyzing the indicator data.
***MARKETS***
This indicator can be used as a signal on all markets, including stocks, crypto, futures and forex.
***TIMEFRAMES***
This momentum indicator can be used on all timeframes.
***TIPS***
Try using numerous indicators of ours on your chart so you can instantly see the bullish or bearish trend of multiple indicators in real time without having to analyze the data. Some of our favorites are our Auto Fibonacci, Directional Movement Index, Volume Profile, Auto Support And Resistance and Money Flow Index in combination with this Momentum Oscillator. They all have real time Bullish and Bearish labels as well so you can immediately understand each indicator's trend.
