Reversal off EMASimple script find when a probable reversal will start. When price moves sharply away from the 13 EMA a BUY/SELL signal will pop up. Scripted to work on 5m 1h, 4h, and daily chart. But it doesn't work on all charts. Not sure why. I'm a forex trader and use this on NZDUSD. It doesn't give too good results on the JPY charts. I think its a fairly good reversal indicator. It definitely doesn't catch them all, and if there is a strong bearish or bullish impulse it doesn't work too well. But with all indicators, you need other conformations when to get in and when to get out. Hope it helps someone.
Cerca negli script per "reversal"
Reversal Based Buy Sell SignalsThis indicator will provide buy/sell signals based on reversal strategy. Thitakes care of multiple basic indicators like Bollinger band, RSI, MA etc. and based on that provides the signals.
Reversal rehersal v1This indicator was designed to identify potential market reversal zones using a combination of RSI thresholds (shooting range/falling range), candlestick patterns, and Fair Value Gaps (FVGs). By combining all these elements into one indicator, it allow for outputting high probability buy/sell signals for use by scalpers on low timeframes like 1-15 mins, for quick but small profits.
Note: that this has been mainly tested on DE40 index on the 1 min timeframe, and need to be adjusted to whichever timeframe and symbol you intend to use. Refer to the backtester feature for checking if this indicator may work for you.
The indicator use RSI ranges from two timeframes to highlight where momentum is building up. During these areas, it will look for certain candlestick patterns (Sweeps as the primary one) and check for existance of fair value gaps to further enhance the hitrate of the signal.
The logic for FVG detection was based on ©pmk07's work with MTF FVG tiny indicator. Several major changes was implemented though and incorporated into this indicator. Among these are:
Automatically adjustments of FVG boxes when mitigated partially and options to extend/cull boxes for performance and clarity.
Backtesting Table (Experimental):
This indicator also features an optional simplified table to review historical theoretical performance of signals, including win rate, profit/loss, and trade statistics. This does not take commision or slippage into consideration.
Usage Notes:
Setup:
1. Add the indicator to your chart.
2. Decide if you want to use Long or Short (or both).
3. If you're scalping on ie. 1 min time frame, make sure to set FVG's to higher timeframes (ie. 5, 15, 60).
4. Enable the 'Show backtest results' and adjust the 'Signals' og 'Take profit' and 'Stop loss' values until you are satisfied with the results.
Use:
1. Setup an alert based on either of the 'BullishShooting range' or 'BearishFalling range' alerts. This will draw your attention to watch for the possible setups.
2. Verify if there's a significant imbalance prior to the signal before taking the trade. Otherwise this may invalidate the setup.
3. Once a signal is shown on the graph (either Green arrow up for buys/Red arrow down for sells) - you should enter a trade with the given 'Take profit' and 'Stop loss' values.
4. (optional) Setup an alert for either the Strong/Weak signals. Which corresponds to when one of the arrows are printed.
Important: This is the way I use it myself, but use at own risk and remember to combine with other indicators for further confluence. Remember this is no crystal ball and I do not guarantee profitable results. The indicator merely show signals with high probability setups for scalping.
Reversal Pivot PointsThis indicator aims to identify price levels where price action has quickly reversed from. These "pivots" establish major levels where major liquidity is located. Unlike standard support and resistance levels, when price breaks below or above a pivot, these pivots disappear from the chart. Comes with various customization features built to fit all.
Features
Pivot Timeframe: Identify and plot pivots from one specific timeframe and see it from all lower timeframes
Pivot left/right bar limit: A feature aimed at preventing false pivots identification
Remove On Close (ROC): Feature to only remove pivots once price close under it
ROC Timeframe: The timeframe the script uses to determine if the candle closed under the level
Wait For Close: Will only remove the pivot after the current candle closes
Line Extension Type: The extension of the line. None - extends line to current time, left - only extends line to the left, right - only extends line to the right, both - extends line both directions
Line Offset: How much to offset (in bars) the line and label from the current candle
Line Type: The style of line when plotted. Solid (─), dotted (┈), dashed (╌), arrow left (←), arrow right (→), arrows both (↔)
Display Level: Whether to or not to display the price of the pivot
Display Perfect Level: Whether to or not to display levels where price perfectly rejected off of
Alerts: Creates an alert when a level has been crossed
How to trade
1. Pivots can be traded to or from. The stock market (market makers) will tend to "chase" liquidity in order to fill orders at better averages. This allows us retail traders to to participate alongside these moves to these pivots. Once price action hits a pivot, it can do two things: break the pivot and continue or bounce off it. We can participate alongside these bounces after confirmation of a reversal (doji, volume, etc). These bounce plays are high risk as it's generally 50-50, but the risk to reward is typically also very high, making them very valuable to take.
2. Typically, the market is a fluid environment and should be "natural," so perfect things (manmade and filled with liquidity) should not occur. With this knowledge, we can expect these perfect levels, "PDT/PDB," to break as they are not natural occurrence and have heavy liquidity on and above/below them. We can trade to these levels and expect them to break/sweep if price action comes near them again.
Reversal with Bollinger Bands + RSI + ADX + ATR (Upgraded)Hi,
Welcome to my 4th script.
Someone asked me some questions about the Bollinger Band strategy I previously published. When I went back to my published script I couldn't help myself but simply try and make it better. Which I did.
Since I've published that script, I've gained much more knowledge about how Pinescript functions. As well as gaining more and more knowledge about how the markets are structered etc.
In this reversal script we use 4 indicators to determine good entry signals, we determine whether the market is ranging or trending and we still only want to take trades in the direction of the "trend".
Bollinger Bands are used for our entry signal. When price hits either side of the band, we wait for a reverse candlestick before we enter a position.
RSI is used to determine if we're in a trending market or in a ranging market. You can adjust the values in the inputs. You can determine the minimum RSI value and the maximum RSI value.
ADX is used the same way as RSI, you can adjust the value in the inputs. You can determine the minimum ADX value.
Last but not least we use two EMA's, a 200 EMA and 100 EMA. Both are adjustable through the inputs. I used two EMA's because I noticed when using this strategy that we'd enter a new position often after having a bad trade. Using two EMA's might clean up some signals, in my case with EUR/USD on a 15m timeframe, it didn't clean up enough signals.
All the default values are pretty decent but might require some finetuning on a certain instrument. Don't overfit the strategy though, that'll only give you bad signals in the future.
Then we are off to our exit signals.
Initially I wanted to incorporate my previous Bollinger Band exit signals as well, but it was too much of a hassle to make the script work as intended so I left it out. If you want to use those exit signals, just find my other script.
When we're in a position and price crosses the opposite band, we wait for a reverse candlestick before we exit the position.
Additionally we want our losses to be as small as possible, so we use RSI to signal us when the market is, or starts to, trend against us. This is where you use the minimum and maximum exit values. So when RSI crosses over or under that value, it'll exit the position.
Furthermore, we use the ATR indicator to set our stop loss, which is pretty basic stuff. You can adjust the ATR multiplier in the inputs. Disabling "Use Trailing Stop?" is really inadvisable unless you know this script inside out as your only exit signals will be opposite Bollinger Band Cross and RSI overbought / oversold areas.
Reversal closing priceThe reversal closing price (RCP) is a candlestick pattern which follows two simples rules:
the low price of current candle needs to be lower than the low price of the last 2 candles
the closing price of current candle needes to be higher than the closing price of the last candle
This generates a signal for a long position. For a short position, the conditions are inverted:
the high price of current candle needs to be higher than the high price of the last 2 candles
the closing price of current candle needes to be lower than the closing price of the last candle
Since RCP is a trend follower indicator, the strategy is programmed in such a way that long positions are only placed if the short period EMA is above the long period EMA, and short positions are only placed if the short EMA is bellow the long EMA. Both periods are configurable, and should be ajusted for each asset.
This strategy uses a fixed stop loss and take profit, and the it's ratio is configurable. The stop price is one tick lower than the lowest price of X candles prior to the order execution for long positions, while in short positions it's one tick higher than the higher price. The amount of candles to lookback (X) is configurable. Both stop and take profit prices are displayed, the first as a red line, and the second as a green line.
This is the setting that I've found to work best with TVC:SPX , but you may find a better setting. While the RCP is universal, it's placement depends on the trend and it's strenght, something that is very heterogeneous among assets.
I really wish that I was able to place images, but I don't have PRO, so text will have to do.
This strategy was designed by Alexandre Wolwacz, a.k.a. Stormer.
Reversal finderThis script is used to visually highlight candles which may signal a reversal following a false break of a support or resistance level.
Inputs are:
Lookback period: look for the highest high and the lowest low of the prior x bars.
SMA length: used for a simple moving average of the range (high minus low) of the prior x bars.
Range multiple: used to filter out signals for any bars with a range smaller than the average range of the preceding bars (determined by SMA length above) e.g. a range multiple of 2 will only show signals for bars with a range twice of that of the average range of the preceding bars.
Range threshold: used to filter signals for bars both the open and close of the bar are at the extreme end of the bar e.g. a threshold setting of 33% will only show buy signals for bars which open and close within the upper 1/3rd of the bar’s high/low range (vice versa for sell signals). This helps highlight, for example, bars with a high which exceeds resistance in a current range but which close back inside the range.
Highlight signal bars?: This will highlight bars with a buy signal in green, sell signal bars in red, and all other bars in grey. The script was designed for use with a dark background, so you will need to play around with the bar colours in the style settings to suit your preferences.
Settings used in the example chart are not the default – they are lookback: 5, SMA length: 20, range multiple: 1.2, range threshold: 33%.
Enjoy!
Reversal Closing Pricelong = (low < low and close > close )
short = (high > high and close < close )
Reversal Candlestick Pattern With Trend IndentifierThis script help to identified popular candlestick pattern combined with trend identifier.
Most script only focus on criteria of the pattern. Such as how much the length of the body compared to previous candle etc.
Besides criteria of the candle, this script also considered the trend into the logic.
For example bullish engulfing is a bullish reversal signal, which is only valid in a down trend.
To identified trend, I'm using RSI. Normally, RSI less than 50 is considered a down trend, and RSI greater than 50 is considered up trend. In this script, you can customize the criteria of how much RSI is up trend and down trend.
Default value RSI >= 55 is up trend, RSI <= 45 is down trend.
Your feedback and suggestion is welcome.
Supported pattern:
White Marubozu (wm)
Black Marubozu (bm)
Hammer (h)
Hanging Man (hm)
Inverted Hammer (ih)
Shooting Star (ss)
Bullish Engulfing (e)
Bearish Engulfing (e)
Tweezer Bottom (tb)
Tweezer Top (tt)
Three White Soldiers (tws)
Three Black Crows (tbc)
Morning Star (ms)
Evening Star (es)
Three Inside Up (tiu)
Three Inside Down (tid)
Reference:
babypips.com
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.
SCE ReversalsThis tool uses past market data to attempt to identify where changes in “memory” may occur to spot reversals. The Hurst Exponent was a big inspiration for this code. The main driver is identifying when past ranges expand and contract, leading to a change in direction. With the use of Sum of Squared Errors, users do not need to input anything.
Getting optimized parameters
// Define ranges for N and lkb
N_range = array.from(15, 20, 25, 30, 35, 40, 45, 50, 55, 60)
// Function to calculate SSE
sse_calc(_N) =>
x = math.pow(close - close , 2)
y = math.pow(close - close , 2) + math.pow(close, 2)
z = x / y
scaled_z = z * math.log(_N)
min_r = ta.lowest(scaled_z, _N)
max_r = ta.highest(scaled_z, _N)
norm_r = (scaled_z - min_r) / (max_r - min_r)
SMA = ta.sma(close, _N)
reversal_bullish = norm_r == 1.000 and norm_r < 0.90 and close < SMA and session.ismarket and barstate.isconfirmed
reversal_bearish = norm_r == 1.000 and norm_r < 0.90 and close > SMA and session.ismarket and barstate.isconfirmed
var float error = na
if reversal_bullish or reversal_bearish
error := math.pow(close - SMA, 2)
error
else
error := 999999999999999999999999999999999999999
error
error
var int N_opt = na
var float min_SSE = na
// Loop through ranges and calculate SSE
for N in N_range
sse = sse_calc(N)
if na(min_SSE) or sse < min_SSE
min_SSE := sse
N_opt := N
The N_range list encompasses every lookback value to check with. The sse_calc function accepts an individual element to then perform the calculation for Reversals. If there is a reversal, the error becomes how far away the close is from a moving average with that look back. Lowest error wins. That would be the look back used for the Reversals calculation.
Reversals calculation
// Calculating with optimized parameters
x_opt = math.pow(close - close , 2)
y_opt = math.pow(close - close , 2) + math.pow(close, 2)
z_opt = x_opt / y_opt
scaled_z_opt = z_opt * math.log(N_opt)
min_r_opt = ta.lowest(scaled_z_opt, N_opt)
max_r_opt = ta.highest(scaled_z_opt, N_opt)
norm_r_opt = (scaled_z_opt - min_r_opt) / (max_r_opt - min_r_opt)
SMA_opt = ta.sma(close, N_opt)
reversal_bullish_opt = norm_r_opt == 1.000 and norm_r_opt < 0.90 and close < SMA_opt and close > high and close > open and session.ismarket and barstate.isconfirmed
reversal_bearish_opt = norm_r_opt == 1.000 and norm_r_opt < 0.90 and close > SMA_opt and close < low and close < open and session.ismarket and barstate.isconfirmed
X_opt and y_opt are the compared values to develop the system. Everything done afterwards is scaling and using it to spot the Reversals. X_opt is the current close, minus the close with the optimal N bars back, squared. Then y_opt is also that but plus the current close squared. Z_opt is then x_opt / y_opt. This gives us a pretty small number that will go up when we approach tops or bottoms. To make life a little easier I normalize the value between 0 and 1.
After I find the moving average with the optimal N, I can check if there is a Reversal. Reversals are there when the last value is at 1 and the current value drops below 0.90. This would tell us that “memory” was strong and is now changing. To determine direction and help with accuracy, if the close is above the moving average it is a bearish alert, and vice versa. As well as the close must be below the last low for a bearish Reversal, above the last high for a bullish Reversal. Also the close must be above the open for a bullish Reversal, and below for a bearish one.
Visual examples
This NASDAQ:TSLA chart shows how alerts may come around. The bullish and bearish labels are plotted on the chart along with a reference line to see price interact with.
The indicator has the potential to be inactive, like we see here on $OKLO. There is only one alert, and it marks the bottom nicely.
Stocks with strong trends like NYSE:NOW may be more susceptible to false alerts. Assets that are volatile and bounce around a lot may be better.
It works on intra day charts the same as on Daily or longer charts. We see here on NASDAQ:QQQ it spotted the bottom on this particular trading day.
This tool is meant to aid traders in making decisions, not to be followed blindly. No trading tool is 100% accurate and Sum of Squared Errors does not guarantee the most optimal value. I encourage feedback and constructive criticism.
Swing Failure Pattern SFP [TradingFinder] SFP ICT Strategy🔵 Introduction
The Swing Failure Pattern (SFP), also referred to as a "Fake Breakout" or "False Breakout," is a vital concept in technical analysis. This pattern is derived from classic technical analysis, price action strategies, ICT concepts, and Smart Money Concepts.
It’s frequently utilized by traders to identify potential trend reversals in financial markets, especially in volatile markets like cryptocurrencies and forex. SFP helps traders recognize failed attempts to breach key support or resistance levels, providing strategic opportunities for trades.
The Swing Failure Pattern (SFP) is a popular strategy among traders used to identify false breakouts and potential trend reversals in the market. This strategy involves spotting moments where the price attempts to break above or below a previous high or low (breakout) but fails to sustain the move, leading to a sharp reversal.
Traders use this strategy to identify liquidity zones where stop orders (stop hunt) are typically placed and targeted by larger market participants or whales.
When the price penetrates these areas but fails to hold the levels, a liquidity sweep occurs, signaling exhaustion in the trend and a potential reversal. This strategy allows traders to enter the market at the right time and capitalize on opportunities created by false breakouts.
🟣 Types of SFP
When analyzing SFPs, two main variations are essential :
Real SFP : This occurs when the price breaks a critical level but fails to close above it, then quickly reverses. Due to its clarity and strong signal, this SFP type is highly reliable for traders.
Considerable SFP : In this scenario, the price closes slightly above a key level but quickly declines. Although significant, it is not as definitive or trustworthy as a Real SFP.
🟣 Understanding SFP
The Swing Failure Pattern, or False Breakout, is identified when the price momentarily breaks a crucial support or resistance level but cannot maintain the movement, leading to a rapid reversal.
The pattern can be categorized as follows :
Bullish SFP : This type occurs when the price dips below a support level but rebounds above it, signaling that sellers failed to push the price lower, indicating a potential upward trend.
Bearish SFP : This pattern forms when the price surpasses a resistance level but fails to hold, suggesting that buyers couldn’t maintain the higher price, leading to a potential decline.
🔵 How to Use
To effectively identify an SFP or Fake Breakout on a price chart, traders should follow these steps :
Identify Key Levels: Locate significant support or resistance levels on the chart.
Observe the Fake Breakout: The price should break the identified level but fail to close beyond it.
Monitor Price Reversal: After the breakout, the price should quickly reverse direction.
Execute the Trade: Traders typically enter the market after confirming the SFP.
🟣 Examples
Bullish Example : Bitcoin breaks below a $30,000 support level, drops to $29,000, but closes above $30,000 by the end of the day, signaling a Real Bullish SFP.
Bearish Example : Ethereum surpasses a $2,000 resistance level, rises to $2,100, but then falls back below $2,000, forming a Bearish SFP.
🟣 Pros and Cons of SFP
Pros :
Effective in identifying strong reversal points.
Offers a favorable risk-to-reward ratio.
Applicable across different timeframes.
Cons :
Requires experience and deep market understanding.
Risk of encountering false breakouts.
Should be combined with other technical tools for optimal effectiveness.
🔵 Settings
🟣 Logical settings
Swing period : You can set the swing detection period.
SFP Type : Choose between "All", "Real" and "Considerable" modes to identify the swing failure pattern.
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 Back : 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 SFP : Enables alerts for Swing Failure Pattern.
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
The Swing Failure Pattern (SFP), or False Breakout, is an essential analytical tool that assists traders in identifying key market reversal points for successful trading.
By understanding the nuances between Real SFP and Considerable SFP, and integrating this pattern with other technical analysis tools, traders can make more informed decisions and better manage their trading risks.
Expectation Breakers [QuantVue]In technical analysis, an "Expectation Breaker" refers to a market event where price action defies typical patterns and anticipated movements, signaling potential shifts in market sentiment and direction.
This indicator looks to take advantage of these opportunities by identifying 2 types of Expectation Breakers: Downside Reversal Buybacks and Upside Reversal Sellbacks.
Downside Reversal
A downside reversals occur when a stock reaches a new high for the user defined lookback period (65 bars by default), and then experiences a larger-than-average drop and closes near its lows. This usually indicates that the market has overextended itself. The expectation is that there will be 2-3 bars of significant selling, following the downside reversal.
However, a notable sign of strength is if the stock rebounds and closes above the downside reversal bar's high within 1-3 bars. This is known as a Downside Reversal Buyback. A rapid recovery following a downside reversal is a powerful bullish indicator, breaking the expectation of lower prices. The quicker price recovers from a downside reversal, the more meaningful it is. Such a swift rebound suggests that the market's strength was underestimated, as downside reversals typically signal a short-term decline.
Upside Reversal
An upside reversal occurs when a stock reaches a new low for the user-defined lookback period (65 bars by default), and then experiences a larger-than-average rise and closes near its highs. This usually indicates that the market has overextended itself to the downside. The expectation is that there will be 2-3 bars of significant buying, following the upside reversal.
However, a notable sign of weakness is if the stock falls back and closes below the upside reversal bar's low within 1-3 bars. This is known as a Upside Reversal Sellback. A rapid fallback following an upside reversal is a powerful bearish indicator, breaking the expectation of higher prices. The quicker price falls back from an upside reversal, the more meaningful it is. Such a swift fallback suggests that the market's weakness was underestimated, as upside reversals typically signal a short-term rally.
The Expectation Breakers indicator identifies these opportunities by first identifying new highs and lows within a defined lookback period. It then compares the true range (TR), average true range (ATR), and closing range to confirm the significance of these reversals. The use of TR and ATR ensures that the reversals are substantial enough to indicate a genuine shift in market sentiment, helping to identify when price action breaks expectations.
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Composite Reversal IndicatorOverview
The "Composite Reversal Indicator" aggregates five technical signals to produce a composite score that ranges from -5 (strongly bearish) to +5 (strongly bullish). These signals come from:
Relative Strength Index (RSI)
Moving Average Convergence Divergence (MACD)
Accumulation/Distribution (A/D)
Volume relative to its moving average
Price proximity to support and resistance levels
Each signal contributes a value of +1 (bullish), -1 (bearish), or 0 (neutral) to the total score. The raw score is plotted as a histogram, and a smoothed version is plotted as a colored line to highlight trends.
Step-by-Step Explanation
1. Customizable Inputs
The indicator starts with user-defined inputs that allow traders to tweak its settings. These inputs include:
RSI: Length (e.g., 14), oversold level (e.g., 30), and overbought level (e.g., 70).
MACD: Fast length (e.g., 12), slow length (e.g., 26), and signal length (e.g., 9).
Volume: Moving average length (e.g., 20) and multipliers for high (e.g., 1.5) and low (e.g., 0.5) volume thresholds.
Price Levels: Period for support and resistance (e.g., 50) and proximity percentage (e.g., 2%).
Score Smoothing: Length for smoothing the score (e.g., 5).
These inputs make the indicator adaptable to different trading styles, assets, or timeframes.
2. Indicator Calculations
The script calculates five key indicators using the input parameters:
RSI: Measures momentum and identifies overbought or oversold conditions.
Formula: rsi = ta.rsi(close, rsi_length)
Example: With a length of 14, it analyzes the past 14 bars of closing prices.
MACD: Tracks trend and momentum using two exponential moving averages (EMAs).
Formula: = ta.macd(close, macd_fast, macd_slow, macd_signal)
Components: MACD line (fast EMA - slow EMA), signal line (EMA of MACD line).
Accumulation/Distribution (A/D): A volume-based indicator showing buying or selling pressure.
Formula: ad = ta.accdist
Reflects cumulative flow based on price and volume.
Volume Moving Average: A simple moving average (SMA) of trading volume.
Formula: vol_ma = ta.sma(volume, vol_ma_length)
Example: A 20-bar SMA smooths volume data.
Support and Resistance Levels: Key price levels based on historical lows and highs.
Formulas:
support = ta.lowest(low, price_level_period)
resistance = ta.highest(high, price_level_period)
Example: Over 50 bars, it finds the lowest low and highest high.
These calculations provide the raw data for generating signals.
3. Signal Generation
Each indicator produces a signal based on specific conditions:
RSI Signal:
+1: RSI < oversold level (e.g., < 30) → potential bullish reversal.
-1: RSI > overbought level (e.g., > 70) → potential bearish reversal.
0: Otherwise.
Logic: Extreme RSI values suggest price may reverse.
MACD Signal:
+1: MACD line > signal line → bullish momentum.
-1: MACD line < signal line → bearish momentum.
0: Equal.
Logic: Crossovers indicate trend shifts.
A/D Signal:
+1: Current A/D > previous A/D → accumulation (bullish).
-1: Current A/D < previous A/D → distribution (bearish).
0: Unchanged.
Logic: Rising A/D shows buying pressure.
Volume Signal:
+1: Volume > high threshold (e.g., 1.5 × volume MA) → strong activity (bullish).
-1: Volume < low threshold (e.g., 0.5 × volume MA) → weak activity (bearish).
0: Otherwise.
Logic: Volume spikes often confirm reversals.
Price Signal:
+1: Close near support (within proximity %, e.g., 2%) → potential bounce.
-1: Close near resistance (within proximity %) → potential rejection.
0: Otherwise.
Logic: Price near key levels signals reversal zones.
4. Composite Score
The raw composite score is the sum of the five signals:
Formula: score = rsi_signal + macd_signal + ad_signal + vol_signal + price_signal
Range: -5 (all signals bearish) to +5 (all signals bullish).
Purpose: Combines multiple perspectives into one number.
5. Smoothed Score
A smoothed version of the score reduces noise:
Formula: score_ma = ta.sma(score, score_ma_length)
Example: With a length of 5, it averages the score over 5 bars.
Purpose: Highlights the trend rather than short-term fluctuations.
6. Visualization
The indicator plots two elements:
Raw Score: A gray histogram showing the composite score per bar.
Style: plot.style_histogram
Color: Gray.
Smoothed Score: A line that changes color:
Green: Score > 0 (bullish).
Red: Score < 0 (bearish).
Gray: Score = 0 (neutral).
Style: plot.style_line, thicker line (e.g., linewidth=2).
These visuals make it easy to spot potential reversals.
How It Works Together
The indicator combines signals from:
RSI: Momentum extremes.
MACD: Trend shifts.
A/D: Buying/selling pressure.
Volume: Confirmation of moves.
Price Levels: Key reversal zones.
By summing these into a composite score, it filters out noise and provides a unified signal. A high positive score (e.g., +3 to +5) suggests a bullish reversal, while a low negative score (e.g., -3 to -5) suggests a bearish reversal. The smoothed score helps traders focus on the trend.
Practical Use
Bullish Reversal: Smoothed score is green and rising → look for buying opportunities.
Bearish Reversal: Smoothed score is red and falling → consider selling or shorting.
Neutral: Score near 0 → wait for clearer signals.
Traders can adjust inputs to suit their strategy, making it versatile for stocks, forex, or crypto.
Dragon Harmonic Pattern [TradingFinder] Dragon Detector🔵 Introduction
The Dragon Harmonic Pattern is one of the technical analysis tools that assists traders in identifying Potential Reversal Zones (PRZ). Resembling an "M" or "W" shape, this pattern is recognized in financial markets as a method for predicting bullish and bearish trends. By leveraging precise Fibonacci ratios and measuring price movements, traders can use this pattern to forecast market trends with high accuracy.
The Dragon Harmonic Pattern is built on the XABCD structure, where each point plays a significant role in shaping and forecasting price movements. Point X marks the beginning of the trend, representing the initial price movement. Point A indicates the first retracement, usually falling within the 0.380 to 0.620 range of the XA wave.
Next, point B signals the second retracement, which lies within 0.200 to 0.400 of the AB wave. Point C, acting as the hump of the pattern, is generally located within 0.800 to 1.100 of the XA wave. Finally, point D represents the endpoint of the pattern and the Potential Reversal Zone (PRZ), where the primary price reversal occurs.
In bullish scenarios, the Dragon Pattern indicates a reversal from a downtrend to an uptrend, where prices move upward from point D. Conversely, in bearish scenarios, prices decline after reaching point D. Accurate identification of this pattern through Fibonacci ratio analysis and PRZ examination can significantly increase the success rate of trades, enabling traders to adjust their strategies based on key market levels such as 0.618 or 1.100.
Due to its high accuracy in identifying Potential Reversal Zones (PRZ) and its alignment with Fibonacci ratios, the Dragon Harmonic Pattern is considered one of the most popular tools in technical analysis. Traders can use this pattern to pinpoint entry and exit points with greater confidence while minimizing trading risks.
Bullish :
Bearish :
🔵 How to Use
The Dragon Harmonic Pattern indicator helps traders identify bullish and bearish patterns in the market, allowing them to capitalize on available trading opportunities. By analyzing Fibonacci ratios and the XABCD structure, the indicator highlights Potential Reversal Zones (PRZ).
🟣 Bullish Dragon Pattern
In the Bullish Dragon Pattern, the price transitions from a downtrend to an uptrend after reaching point D. At this stage, points X, A, B, C, and D must be carefully identified.
Fibonacci ratios for these points are as follows: Point A should fall within 0.380 to 0.620 of the XA wave, point B within 0.200 to 0.400 of the AB wave, and point C within 0.800 to 1.100 of the XA wave.
When the price reaches point D, traders should look for bullish signals such as reversal candlesticks or increased trading volume to enter a buy position. The take-profit level can be set near the previous price high or based on the 1.272 Fibonacci ratio of the XA wave, while the stop-loss should be placed slightly below point D.
🟣 Bearish Dragon Pattern
In the Bearish Dragon Pattern, the price shifts from an uptrend to a downtrend after reaching point D. In this pattern, points X, A, B, C, and D must also be identified. Fibonacci ratios for these points are as follows: Point A should fall within 0.380 to 0.620 of the XA wave, point B within 0.200 to 0.400 of the AB wave, and point C within 0.800 to 1.100 of the XA wave.
Upon reaching point D, bearish signals such as reversal candlesticks or decreasing trading volume indicate the opportunity to enter a sell position. The take-profit level can be set near the previous price low or based on the 1.272 Fibonacci ratio of the XA wave, while the stop-loss should be placed slightly above point D.
By combining the Dragon Harmonic Pattern indicator with precise Fibonacci ratio analysis, traders can identify key opportunities while minimizing risks and improving their decision-making in both bullish and bearish market conditions.
🔵 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.
🔵 Conclusion
The Dragon Harmonic Pattern is an advanced and practical technical analysis tool that aids traders in accurately predicting bullish and bearish trends by identifying Potential Reversal Zones (PRZ) and utilizing Fibonacci ratios. Built on the XABCD structure, this pattern stands out for its flexibility and precision in identifying price movements, making it a valuable resource among technical analysts. One of its key advantages is its compatibility with other technical tools such as trendlines, support and resistance levels, and Fibonacci retracements.
By using the Dragon Harmonic Pattern indicator, traders can accurately determine entry and exit points for their trades. The indicator analyzes key Fibonacci ratios—0.380 to 0.620, 0.200 to 0.400, and 0.800 to 1.100—to identify critical levels such as price highs and lows, offering precise trading strategies. In bullish scenarios, traders can profit from rising prices, while in bearish scenarios, they can capitalize on price declines.
In conclusion, the Dragon Harmonic Pattern is a highly reliable tool for identifying trading opportunities with exceptional accuracy. However, for optimal results, it is recommended to combine this pattern with other analytical tools and thoroughly assess market conditions. By utilizing this indicator, traders can reduce their trading risks while achieving higher profitability and confidence in their trading strategies.
WaveTrend Ribbon [AlgoAlpha]🌟🚀 Introducing the WaveTrend Ribbon by AlgoAlpha - Your Next-Level Trading Companion! 🚀🌟
Dive into the world of advanced trading with the WaveTrend Ribbon by AlgoAlpha, a cutting-edge indicator designed to elevate your trading strategy on TradingView. 📈💡 This powerful tool combines the efficiency of the WaveTrend oscillator with innovative Z-score analysis to offer clear, actionable trading signals. 🌊🎯
Key Features:
🔧 Customizable Parameters: Tailor the indicator to your trading needs with adjustable settings including Channel Length, Average Length, Overbought/Oversold Levels, and more.
📊 WaveTrend Oscillator: Utilizes a smoothed version of the average price to identify potential market reversals.
📉 Z-Score Analysis: Enhances signal reliability by measuring the standard deviation of the current price from the mean.
🎨 Dynamic Color Coding: Visual cues shift between up and down colors to indicate market trends, making it easy to read at a glance.
⚠️ Divergence Detection: Automatic identification of bullish and bearish divergences for early signal warnings.
🔔 Custom Alerts: Stay ahead with real-time alerts for key trading events like bullish/bearish divergences and trend reversals.
How to Use WaveTrend Ribbon :
Maximize your trading potential with the WaveTrend Ribbon by following these simple steps:
🔍 Add to Chart: Locate "WaveTrend Ribbon " in TradingView's Indicators & Strategies and apply it to your chart. Dive into the settings to customize the parameters like Channel Length, Average Length, and the Overbought/Oversold levels to match your trading strategy.
- Channel Length affects the sensitivity of the WaveTrend oscillator to price movements. A shorter Channel Length increases responsiveness, useful in volatile markets but may lead to false signals. It's ideal for traders looking for quick reactions to price changes.
- Average Length is used to smooth the oscillator further, influencing how quickly the indicator responds to trend changes. A shorter Average Length allows for a quicker response to the oscillator's movements, suitable for short-term trading strategies.
📊 Analyze the Market: Pay close attention to the color transitions and position of the Z-score in relation to its moving average for insights into market direction. Look out for the overbought and oversold conditions for potential reversal points.
🔔 Set Up Alerts: Utilize the built-in alert system to get notified of key events like trend reversals, bullish and bearish divergences, and more, so you can make timely decisions without having to constantly monitor the charts.
Basic Logic Explained:
The WaveTrend Ribbon is an advanced trading indicator that leverages the WaveTrend oscillator, enhanced by Z-score normalization and moving averages for precise market trend analysis. It calculates the average price deviation over a set period (Channel Length), smoothing it with an Average Length to identify trends. Z-score analysis further refines signals by comparing oscillator deviations against its historical performance, highlighting overbought or oversold conditions. The indicator generates signals for potential reversals and market entries/exits, visualized through dynamic color coding and customizable alerts for traders to act upon efficiently. This multi-layered approach provides a deeper insight into market dynamics, offering a blend of trend following and momentum strategies.
By highlighting overbought and oversold conditions with dynamic color changes and providing reversal signals, this indicator is a must-have tool for traders aiming to capitalize on market trends. 📈🚀
Elevate your trading experience with the WaveTrend Ribbon, your go-to indicator for navigating the markets with confidence and precision. Happy trading! 🌟🚀
Standardized PSAR Oscillator [AlgoAlpha]Enhance your trading experience with the "Standardized PSAR Oscillator" 🪝, a powerful tool that combines the Parabolic Stop and Reverse (PSAR) with standardization techniques to offer more nuanced insights into market trends and potential reversals.
🔑 Key Features:
- 🛠 Customizable PSAR Settings: Adjust the starting point, increment, and maximum values for the PSAR to tailor the indicator to your strategy.
- 📏 Standardization: Smooth out volatility by standardizing the PSAR values using a customizable EMA, making reversals easier to identify.
- 🎨 Dynamic Color-Coding: The oscillator changes colors based on market conditions, helping you quickly spot bullish and bearish trends.
- 🔄 Divergence Detection: Automatic detection of bullish and bearish divergences with customizable sensitivity and confirmation settings.
- 🔔 Alerts: Set up alerts for key events like zero-line crossovers and trend weakening, ensuring you never miss a critical market move.
🚀 How to Use:
✨ Add the Indicator: Add the indicator to favorites by pressing the star icon, adjust the settings to suite your needs.
👀 Monitor Signals: Watch for the automatic plotting of divergences and reversal signals to identify potential market entries and exits.
🔔 Set Alerts: Configure alerts to get notified of key changes without constantly monitoring the charts.
🔍 How It Works:
The Standardized PSAR Oscillator is an advanced trading tool that refines the traditional PSAR (Parabolic Stop and Reverse) indicator by incorporating several key enhancements to improve trend analysis and signal accuracy. The script begins by calculating the PSAR, a widely used indicator known for its effectiveness in identifying trend reversals. To make the PSAR more adaptive and responsive to market conditions, it is standardized using an Exponential Moving Average (EMA) of the high-low range over a user-defined period. This standardization helps to normalize the PSAR values, making them more comparable across different market conditions.
To further enhance signal clarity, the standardized PSAR is then smoothed using a Weighted Moving Average (WMA). This combination of EMA and WMA creates an oscillator that not only captures trend direction but also smooths out market noise, providing a cleaner signal. The oscillator's values are color-coded to visually indicate its position relative to the zero line, with additional emphasis on whether the WMA is rising or falling—this helps traders quickly interpret the trend’s strength and direction.
The oscillator also includes built-in divergence detection by comparing pivot points in price action with those in the oscillator. This feature helps identify potential discrepancies between the price and the oscillator, signaling possible trend reversals. Alerts can be configured for when the oscillator crosses the zero line or when a trend shows signs of weakening, ensuring that traders receive timely notifications to act on emerging opportunities. These combined elements make the Standardized PSAR Oscillator a robust tool for enhancing your trading strategy with more reliable and actionable signals
RSI K-Means Clustering [UAlgo]The "RSI K-Means Clustering " indicator is a technical analysis tool that combines the Relative Strength Index (RSI) with K-means clustering techniques. This approach aims to provide more nuanced insights into market conditions by categorizing RSI values into overbought, neutral, and oversold clusters.
The indicator adjusts these clusters dynamically based on historical RSI data, allowing for more adaptive and responsive thresholds compared to traditional fixed levels. By leveraging K-means clustering, the indicator identifies patterns in RSI behavior, which can help traders make more informed decisions regarding market trends and potential reversals.
🔶 Key Features
K-means Clustering: The indicator employs K-means clustering, an unsupervised machine learning technique, to dynamically determine overbought, neutral, and oversold levels based on historical RSI data.
User-Defined Inputs: You can customize various aspects of the indicator's behavior, including:
RSI Source: Select the data source used for RSI calculation (e.g., closing price).
RSI Length: Define the period length for RSI calculation.
Training Data Size: Specify the number of historical RSI values used for K-means clustering.
Number of K-means Iterations: Set the number of iterations performed by the K-means algorithm to refine cluster centers.
Overbought/Neutral/Oversold Levels: You can define initial values for these levels, which will be further optimized through K-means clustering.
Alerts: The indicator can generate alerts for various events, including:
Trend Crossovers: Alerts for when the RSI crosses above/below the neutral zone, signaling potential trend changes.
Overbought/Oversold: Alerts when the RSI reaches the dynamically determined overbought or oversold thresholds.
Reversals: Alerts for potential trend reversals based on RSI crossing above/below the calculated overbought/oversold levels.
RSI Classification: Alerts based on the current RSI classification (ranging, uptrend, downtrend).
🔶 Interpreting Indicator
Adjusted RSI Value: The primary plot represents the adjusted RSI value, calculated based on the relative position of the current RSI compared to dynamically adjusted overbought and oversold levels. This value provides an intuitive measure of the market's momentum. The final overbought, neutral, and oversold levels are determined by K-means clustering and are displayed as horizontal lines. These levels serve as dynamic support and resistance points, indicating potential reversal zones.
Classification Symbols : The "RSI K-Means Clustering " indicator uses specific symbols to classify the current market condition based on the position of the RSI value relative to dynamically determined clusters. These symbols provide a quick visual reference to help traders understand the prevailing market sentiment. Here's a detailed explanation of each classification symbol:
Ranging Classification ("R")
This symbol appears when the RSI value is closest to the neutral threshold compared to the overbought or oversold thresholds. It indicates a ranging market, where the price is moving sideways without a clear trend direction. In this state, neither buyers nor sellers are in control, suggesting a period of consolidation or indecision. This is often seen as a time to wait for a breakout or reversal signal before taking a position.
Up-Trend Classification ("↑")
The up-trend symbol, represented by an upward arrow, is displayed when the RSI value is closer to the overbought threshold than to the neutral or oversold thresholds. This classification suggests that the market is in a bullish phase, with buying pressure outweighing selling pressure. Traders may consider this as a signal to enter or hold long positions, as the price is likely to continue rising until the market reaches an overbought condition.
Down-Trend Classification ("↓")
The down-trend symbol, depicted by a downward arrow, appears when the RSI value is nearest to the oversold threshold. This indicates a bearish market condition, where selling pressure dominates. The market is likely experiencing a downward movement, and traders might view this as an opportunity to enter or hold short positions. This symbol serves as a warning of potential further declines, especially if the RSI continues to move toward the oversold level.
Bullish Reversal ("▲")
This signal occurs when the RSI value crosses above the oversold threshold. It indicates a potential shift from a downtrend to an uptrend, suggesting that the market may start to move higher. Traders might use this signal as an opportunity to enter long positions.
Bearish Reversal ("▼")
This signal appears when the RSI value crosses below the overbought threshold. It suggests a possible transition from an uptrend to a downtrend, indicating that the market may begin to decline. This signal can alert traders to consider entering short positions or taking profits on long positions.
These classification symbols are plotted near the adjusted RSI line, with their positions adjusted based on the standard deviation and a distance multiplier. This placement helps in visualizing the classification's strength and ensuring clarity in the indicator's presentation. By monitoring these symbols, traders can quickly assess the market's state and make more informed trading decisions.
🔶 Disclaimer
Use with Caution: This indicator is provided for educational and informational purposes only and should not be considered as financial advice. Users should exercise caution and perform their own analysis before making trading decisions based on the indicator's signals.
Not Financial Advice: The information provided by this indicator does not constitute financial advice, and the creator (UAlgo) shall not be held responsible for any trading losses incurred as a result of using this indicator.
Backtesting Recommended: Traders are encouraged to backtest the indicator thoroughly on historical data before using it in live trading to assess its performance and suitability for their trading strategies.
Risk Management: Trading involves inherent risks, and users should implement proper risk management strategies, including but not limited to stop-loss orders and position sizing, to mitigate potential losses.
No Guarantees: The accuracy and reliability of the indicator's signals cannot be guaranteed, as they are based on historical price data and past performance may not be indicative of future results.
[tradinghook] - Renko Trend Reversal Strategy V2Title: Renko Trend Reversal Strategy
Short Title: - Renko TRS
> Special thanks to for manually calculating `renkoClose` and `renkoOpen` values in order to remove the infamous repaint issue
Description:
The Renko Trend Reversal Strategy ( - Renko TRS) is a powerful and original trading approach designed to identify trend reversals in financial markets using Renko charts. Renko charts differ from traditional time-based charts, as they focus solely on price movements and ignore time, resulting in a clearer representation of market trends. This strategy leverages Renko charts in conjunction with the Average True Range (ATR) to capture trend reversals with high precision and effectiveness.
Key Concepts:
Renko Charts: Renko charts are unique chart types that only plot price movements beyond a predefined brick size, ignoring time and noise. By doing so, they provide a more straightforward depiction of market trends, eliminating insignificant price fluctuations and making it easier to spot trend reversals.
Average True Range (ATR): The strategy utilizes the ATR indicator, which measures market volatility and provides valuable insights into potential price movements. By setting the brick size of the Renko chart based on the ATR, the strategy adapts to changing market conditions, ensuring optimal performance across various instruments and timeframes.
How it Works:
The Renko Trend Reversal Strategy is designed to identify trend reversal points and generate buy or sell signals based on the following principles:
Renko Brick Generation: The strategy calculates the ATR over a user-defined period (ATR Length) and utilizes this value to determine the size of Renko bricks. Larger ATR values result in bigger bricks, capturing higher market volatility, while smaller ATR values create smaller bricks for calmer market conditions.
Buy and Sell Signals: The strategy generates buy signals when the Renko chart's open price crosses below the close price, indicating a potential bullish trend reversal. Conversely, sell signals are generated when the open price crosses above the close price, suggesting a bearish trend reversal. These signals help traders identify potential entry points to capitalize on market movements.
Stop Loss and Take Profit Management: To manage risk and protect profits, the strategy incorporates dynamic stop-loss and take-profit levels. The stop-loss level is calculated as a percentage of the Renko open price, ensuring a fixed risk amount for each trade. Similarly, the take-profit level is set as a percentage of the Renko open price to secure potential gains.
How to Use:
Inputs: Before using the strategy, traders can customize several parameters to suit their trading preferences. These inputs include the ATR Length, Stop Loss Percentage, Take Profit Percentage, Start Date, and End Date. Adjusting these settings allows users to optimize the strategy for different market conditions and risk tolerances.
Chart Setup: Apply the - Renko TRS script to your desired financial instrument and timeframe on TradingView. The Renko chart will dynamically adjust its brick size based on the ATR Length parameter.
Buy and Sell Signals: The strategy will generate green "Buy" labels below bullish reversal points and red "Sell" labels above bearish reversal points on the Renko chart. These labels indicate potential entry points for long and short trades, respectively.
Risk Management: The strategy automatically calculates stop-loss and take-profit levels based on the user-defined percentages. Traders can ensure proper risk management by using these levels to protect their capital and secure profits.
Backtesting and Optimization: Before implementing the strategy live, traders are encouraged to backtest it on historical data to assess its performance across various market conditions. Adjust the input parameters through optimization to find the most suitable settings for specific instruments and timeframes.
Conclusion:
The - Renko Trend Reversal Strategy is a unique and versatile tool for traders looking to identify trend reversals with greater accuracy. By combining Renko charts and the Average True Range (ATR) indicator, this strategy adapts to market dynamics and provides clear entry and exit signals. Traders can harness the power of Renko charts while effectively managing risk through stop-loss and take-profit levels. Before using the strategy in live trading, backtesting and optimization will help traders fine-tune the parameters for optimal performance. Start exploring trend reversals with the - Renko TRS and take your trading to the next level.
(Note: This description is for illustrative purposes only and does not constitute financial advice. Traders are advised to thoroughly test the strategy and exercise sound risk management practices when trading in real markets.)
[tradinghook] - Renko Trend Reversal Strategy - Renko Trend Reversal Strategy
Short Title: - Renko TRS
Description:
The Renko Trend Reversal Strategy ( - Renko TRS) is a powerful and original trading approach designed to identify trend reversals in financial markets using Renko charts. Renko charts differ from traditional time-based charts, as they focus solely on price movements and ignore time, resulting in a clearer representation of market trends. This strategy leverages Renko charts in conjunction with the Average True Range (ATR) to capture trend reversals with high precision and effectiveness.
Key Concepts:
Renko Charts: Renko charts are unique chart types that only plot price movements beyond a predefined brick size, ignoring time and noise. By doing so, they provide a more straightforward depiction of market trends, eliminating insignificant price fluctuations and making it easier to spot trend reversals.
Average True Range (ATR): The strategy utilizes the ATR indicator, which measures market volatility and provides valuable insights into potential price movements. By setting the brick size of the Renko chart based on the ATR, the strategy adapts to changing market conditions, ensuring optimal performance across various instruments and timeframes.
How it Works:
The Renko Trend Reversal Strategy is designed to identify trend reversal points and generate buy or sell signals based on the following principles:
Renko Brick Generation: The strategy calculates the ATR over a user-defined period (ATR Length) and utilizes this value to determine the size of Renko bricks. Larger ATR values result in bigger bricks, capturing higher market volatility, while smaller ATR values create smaller bricks for calmer market conditions.
Buy and Sell Signals: The strategy generates buy signals when the Renko chart's open price crosses below the close price, indicating a potential bullish trend reversal. Conversely, sell signals are generated when the open price crosses above the close price, suggesting a bearish trend reversal. These signals help traders identify potential entry points to capitalize on market movements.
Stop Loss and Take Profit Management: To manage risk and protect profits, the strategy incorporates dynamic stop-loss and take-profit levels. The stop-loss level is calculated as a percentage of the Renko open price, ensuring a fixed risk amount for each trade. Similarly, the take-profit level is set as a percentage of the Renko open price to secure potential gains.
How to Use:
Inputs: Before using the strategy, traders can customize several parameters to suit their trading preferences. These inputs include the ATR Length, Stop Loss Percentage, Take Profit Percentage, Start Date, and End Date. Adjusting these settings allows users to optimize the strategy for different market conditions and risk tolerances.
Chart Setup: Apply the - Renko TRS script to your desired financial instrument and timeframe on TradingView. The Renko chart will dynamically adjust its brick size based on the ATR Length parameter.
Buy and Sell Signals: The strategy will generate green "Buy" labels below bullish reversal points and red "Sell" labels above bearish reversal points on the Renko chart. These labels indicate potential entry points for long and short trades, respectively.
Risk Management: The strategy automatically calculates stop-loss and take-profit levels based on the user-defined percentages. Traders can ensure proper risk management by using these levels to protect their capital and secure profits.
Backtesting and Optimization: Before implementing the strategy live, traders are encouraged to backtest it on historical data to assess its performance across various market conditions. Adjust the input parameters through optimization to find the most suitable settings for specific instruments and timeframes.
Conclusion:
The - Renko Trend Reversal Strategy is a unique and versatile tool for traders looking to identify trend reversals with greater accuracy. By combining Renko charts and the Average True Range (ATR) indicator, this strategy adapts to market dynamics and provides clear entry and exit signals. Traders can harness the power of Renko charts while effectively managing risk through stop-loss and take-profit levels. Before using the strategy in live trading, backtesting and optimization will help traders fine-tune the parameters for optimal performance. Start exploring trend reversals with the - Renko TRS and take your trading to the next level.
(Note: This description is for illustrative purposes only and does not constitute financial advice. Traders are advised to thoroughly test the strategy and exercise sound risk management practices when trading in real markets.)
Bullish Reversal Bar Strategy [Skyrexio]Overview
Bullish Reversal Bar Strategy leverages the combination of candlestick pattern Bullish Reversal Bar (description in Methodology and Justification of Methodology), Williams Alligator indicator and Williams Fractals to create the high probability setups. Candlestick pattern is used for the entering into trade, while the combination of Williams Alligator and Fractals is used for the trend approximation as close condition. Strategy uses only long trades.
Unique Features
No fixed stop-loss and take profit: Instead of fixed stop-loss level strategy utilizes technical condition obtained by Fractals and Alligator or the candlestick pattern invalidation to identify when current uptrend is likely to be over (more information in "Methodology" and "Justification of Methodology" paragraphs)
Configurable Trading Periods: Users can tailor the strategy to specific market windows, adapting to different market conditions.
Trend Trade Filter: strategy uses Alligator and Fractal combination as high probability trend filter.
Methodology
The strategy opens long trade when the following price met the conditions:
1.Current candle's high shall be below the Williams Alligator's lines (Jaw, Lips, Teeth)(all details in "Justification of Methodology" paragraph)
2.Price shall create the candlestick pattern "Bullish Reversal Bar". Optionally if MFI and AO filters are enabled current candle shall have the decreasing AO and at least one of three recent bars shall have the squat state on the MFI (all details in "Justification of Methodology" paragraph)
3.If price breaks through the high of the candle marked as the "Bullish Reversal Bar" the long trade is open at the price one tick above the candle's high
4.Initial stop loss is placed at the Bullish Reversal Bar's candle's low
5.If price hit the Bullish Reversal Bar's low before hitting the entry price potential trade is cancelled
6.If trade is active and initial stop loss has not been hit, trade is closed when the combination of Alligator and Williams Fractals shall consider current trend change from upward to downward.
Strategy settings
In the inputs window user can setup strategy setting:
Enable MFI (if true trades are filtered using Market Facilitation Index (MFI) condition all details in "Justification of Methodology" paragraph), by default = false)
Enable AO (if true trades are filtered using Awesome Oscillator (AO) condition all details in "Justification of Methodology" paragraph), by default = false)
Justification of Methodology
Let's explore the key concepts of this strategy and understand how they work together. The first and key concept is the Bullish Reversal Bar candlestick pattern. This is just the single bar pattern. The rules are simple:
Candle shall be closed in it's upper half
High of this candle shall be below all three Alligator's lines (Jaw, Lips, Teeth)
Next, let’s discuss the short-term trend filter, which combines the Williams Alligator and Williams Fractals. Williams Alligator
Developed by Bill Williams, the Alligator is a technical indicator that identifies trends and potential market reversals. It consists of three smoothed moving averages:
Jaw (Blue Line): The slowest of the three, based on a 13-period smoothed moving average shifted 8 bars ahead.
Teeth (Red Line): The medium-speed line, derived from an 8-period smoothed moving average shifted 5 bars forward.
Lips (Green Line): The fastest line, calculated using a 5-period smoothed moving average shifted 3 bars forward.
When the lines diverge and align in order, the "Alligator" is "awake," signaling a strong trend. When the lines overlap or intertwine, the "Alligator" is "asleep," indicating a range-bound or sideways market. This indicator helps traders determine when to enter or avoid trades.
Fractals, another tool by Bill Williams, help identify potential reversal points on a price chart. A fractal forms over at least five consecutive bars, with the middle bar showing either:
Up Fractal: Occurs when the middle bar has a higher high than the two preceding and two following bars, suggesting a potential downward reversal.
Down Fractal: Happens when the middle bar shows a lower low than the surrounding two bars, hinting at a possible upward reversal.
Traders often use fractals alongside other indicators to confirm trends or reversals, enhancing decision-making accuracy.
How do these tools work together in this strategy? Let’s consider an example of an uptrend.
When the price breaks above an up fractal, it signals a potential bullish trend. This occurs because the up fractal represents a shift in market behavior, where a temporary high was formed due to selling pressure. If the price revisits this level and breaks through, it suggests the market sentiment has turned bullish.
The breakout must occur above the Alligator’s teeth line to confirm the trend. A breakout below the teeth is considered invalid, and the downtrend might still persist. Conversely, in a downtrend, the same logic applies with down fractals.
How we can use all these indicators in this strategy? This strategy is a counter trend one. Candle's high shall be below all Alligator's lines. During this market stage the bullish reversal bar candlestick pattern shall be printed. This bar during the downtrend is a high probability setup for the potential reversal to the upside: bulls were able to close the price in the upper half of a candle. The breaking of its high is a high probability signal that trend change is confirmed and script opens long trade. If market continues going down and break down the bullish reversal bar's low potential trend change has been invalidated and strategy close long trade.
If market really reversed and started moving to the upside strategy waits for the trend change form the downtrend to the uptrend according to approximation of Alligator and Fractals combination. If this change happens strategy close the trade. This approach helps to stay in the long trade while the uptrend continuation is likely and close it if there is a high probability of the uptrend finish.
Optionally users can enable MFI and AO filters. First of all, let's briefly explain what are these two indicators. The Awesome Oscillator (AO), created by Bill Williams, is a momentum-based indicator that evaluates market momentum by comparing recent price activity to a broader historical context. It assists traders in identifying potential trend reversals and gauging trend strength.
AO = SMA5(Median Price) − SMA34(Median Price)
where:
Median Price = (High + Low) / 2
SMA5 = 5-period Simple Moving Average of the Median Price
SMA 34 = 34-period Simple Moving Average of the Median Price
This indicator is filtering signals in the following way: if current AO bar is decreasing this candle can be interpreted as a bullish reversal bar. This logic is applicable because initially this strategy is a trend reversal, it is searching for the high probability setup against the current trend. Decreasing AO is the additional high probability filter of a downtrend.
Let's briefly look what is MFI. The Market Facilitation Index (MFI) is a technical indicator that measures the price movement per unit of volume, helping traders gauge the efficiency of price movement in relation to trading volume. Here's how you can calculate it:
MFI = (High−Low)/Volume
MFI can be used in combination with volume, so we can divide 4 states. Bill Williams introduced these to help traders interpret the interaction between volume and price movement. Here’s a quick summary:
Green Window (Increased MFI & Increased Volume): Indicates strong momentum with both price and volume increasing. Often a sign of trend continuation, as both buying and selling interest are rising.
Fake Window (Increased MFI & Decreased Volume): Shows that price is moving but with lower volume, suggesting weak support for the trend. This can signal a potential end of the current trend.
Squat Window (Decreased MFI & Increased Volume): Shows high volume but little price movement, indicating a tug-of-war between buyers and sellers. This often precedes a breakout as the pressure builds.
Fade Window (Decreased MFI & Decreased Volume): Indicates a lack of interest from both buyers and sellers, leading to lower momentum. This typically happens in range-bound markets and may signal consolidation before a new move.
For our purposes we are interested in squat bars. This is the sign that volume cannot move the price easily. This type of bar increases the probability of trend reversal. In this indicator we added to enable the MFI filter of reversal bars. If potential reversal bar or two preceding bars have squat state this bar can be interpret as a reversal one.
Backtest Results
Operating window: Date range of backtests is 2023.01.01 - 2024.12.31. It is chosen to let the strategy to close all opened positions.
Commission and Slippage: Includes a standard Binance commission of 0.1% and accounts for possible slippage over 5 ticks.
Initial capital: 10000 USDT
Percent of capital used in every trade: 50%
Maximum Single Position Loss: -5.29%
Maximum Single Profit: +29.99%
Net Profit: +5472.66 USDT (+54.73%)
Total Trades: 103 (33.98% win rate)
Profit Factor: 1.634
Maximum Accumulated Loss: 1231.15 USDT (-8.32%)
Average Profit per Trade: 53.13 USDT (+0.94%)
Average Trade Duration: 76 hours
How to Use
Add the script to favorites for easy access.
Apply to the desired timeframe and chart (optimal performance observed on 4h ETH/USDT).
Configure settings using the dropdown choice list in the built-in menu.
Set up alerts to automate strategy positions through web hook with the text: {{strategy.order.alert_message}}
Disclaimer:
Educational and informational tool reflecting Skyrex commitment to informed trading. Past performance does not guarantee future results. Test strategies in a simulated environment before live implementation
These results are obtained with realistic parameters representing trading conditions observed at major exchanges such as Binance and with realistic trading portfolio usage parameters.
Bollinger Band Percentile SuiteThe Bollinger Band Percentile Suite (𝐵𝐵𝒫𝒸𝓉 𝒮𝓊𝒾𝓉𝑒) is a comprehensive and customizable toolkit built upon the foundation of the %B indicator. The methodology behind this toolkit remains consistent with the original %B indicator, while introducing a host of powerful features to enhance its functionality and adaptability.
Key Features and Customization:
The 𝐵𝐵𝒫𝒸𝓉 offers a wide array of customizable options to suit your trading preferences and strategies. It includes a variety of 14 moving average types that can be chosen as the basis for the Bollinger Band calculation. Additionally, traders have the flexibility to set their upper and lower boundaries for mean reversion detection, allowing for analysis tailored to the user's preference.
Deviation Calculation:
The toolkit provides an option to choose between standard and weighted deviation calculation methods. This added customization ensures that the indicator's behavior aligns with your unique trading style and preferences.
Signals and Reversals:
The 𝐵𝐵𝒫𝒸𝓉 excels in identifying potential overbought and oversold market conditions. It highlights these levels on the chart and marks potential reversal signals with small circles positioned either at the top or bottom of the indicator pane, providing traders with actionable insights.
Trend and Color Coding:
Incorporating a color-coded approach, the BBpct Suite enhances your understanding of market dynamics. It offers bar coloring options based on trend, allowing traders to identify bullish or bearish market conditions as the percentile goes above or below the midline.
Extremities and Reversions:
Recognizing extreme market conditions is crucial for traders. The 𝐵𝐵𝒫𝒸𝓉 includes color-coded indicators for extremities, indicating when the percentile ventures above or below the predefined thresholds. Moreover, it promptly identifies reversions by marking the moment the percentile crosses under the upper threshold (overbought) or over the lower threshold (oversold).
The Bollinger Band Percentile Suite equips traders with a versatile toolkit to gain valuable insights into market overbought and oversold conditions, and potential reversal signals. Its extensive customization options and array of features empower traders to make well-informed decisions based on their unique trading strategies and risk tolerance.
Please note that while the BBpct Suite provides robust analysis, it is advisable to combine its insights with other technical indicators and tools for a comprehensive trading approach.
Example Chart:
