OPEN-SOURCE SCRIPT
Constantly Applied Pressure Index (CAP index)
ETHUSDTThe CAP index is my own homebrew trend indicator made to help traders see the slightly bigger picture, because we all know that as traders we can tend to hyper-focus in on a few candles and end up making a stupid trade because of it, or is it just me ? On a more serious note this indicator helps you find the short term trend by looking at bullish and bearish candles comparing their sizes, volumes and predominance.
The indicator has many technical settings for you to play around with but on the defaults it will render in a few colors which I will explain. Gray means no trend or that the current trend has died, bright green or red mean that a trend has formed, is playing out or that there is a good change a strong trend is about to form. Obviously green means bullish and red means bearish. Finally darker green and red mean a weak or weakening trend, this serves as a warning if you are about to take a trade in the trend direction.
The way I recommend using the indicator is the same way many trend indicators are used, as a filter to either a different indicator creating trading signals or to your own strategy's signals. I would add an illustration here that I prepared but I cannot because of tradingview's reputation rules
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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