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Contractionandexpansion

2 Bar Master Pattern Indicator ( MTF Inside Bars ) THE 2 BAR MASTER PATTERN IS A PRICE ACTION INDICATOR It is based off of the master pattern concepts which explains the market moving through a 3 phase cycle. Phase 1 - Contraction Phase 2 - Expansion Phase 3 - Trending THESE 3 PHASES ARE HAPPENING ON EVERY TIME FRAME AND ON EVERY ASSET CLASS. The first phase of the cycle is the contraction phase, this is where price goes into contraction which is measure by a simultaneous lower high / higher low. The contraction phase can be measured with many forms of contraction methods, such as 2 bar / 3 bar and multi bar contraction detection. The 2 bar master pattern detects inside bars, based off 2 bar candle detection, when detected it will color the candle and a value line will project out of the center. When it identifies an inside bar it will bring a line through the centre of the inside bar which is known as a value line, these are key levels that price can either find support or resistance on these levels, or a level when broken price can breakout and take off. MTF FUNCTIONALITY We have coded into the logic a Multi Time Frame function so that you can have it identify any inside bar on any time frame. 2 bar inside bars work best on higher time frames such as the 4hr and above therefore with the multi time frame functionality you can set it to a higher time frame of choice and be on a lower chart timeframe where you will take your entries off of. SHORT ENTRY EXAMPLE LONG ENTRY EXAMPLE In the example above its set to the weekly chart as the time frame to detect the 2 bar master patterns, and the timeframe for entry is the 4hr time frame, this will change depending on your trading style and timeframes you like to trade on. 2 BAR MASTER PATTERNS CAN BE USED FOR REVERSALS AND CONTINUATION TRADING. CONTINUATION INSIDE BAR TRADING When you have a inside bar formed on a higher time frame, you mark the high and low of the inside bar, and depending on the direction of the trend - if on a up trend and it breaks the high of the inside bar is an long entry - and if its on a downtrend and the low of the inside bar is broken thats the set up for a short entry. REVERSAL INSIDE BAR TRADING When you have an inside bar forming at the bottom or top of a range or key level, this can be a sign of weakness and a potential area where price will reverse in the opposite direction. 2 BAR MASTER PATTERN INSIDE BARS EITHER SHOW STRENGHTH OR WEAKNESS OF A TREND If combined in combination with the higher time frame trend direction and the master patten concepts principles, you can find amazing entries. Best place to look for long entries on a confirmed uptrend is when price is under the value lines Best place to look for short entries on a confirmed downtrend is when price is above the value lines Once you understand that the market is moving in this 3 phase cycle and become adept and identifying the 1st phase which is the contraction phase, it can open the door to a new way of percieving the market and making sense of the seemingly randomness of how it moves.
Pine Script™ indicator
by Easy-Algo
Forex Master Pattern Screener 2Overview The Forex Master Pattern Screener 2 is based on the Master Pattern, which includes contraction, expansion, and trend phases. This indicator is designed to identify and visualize market volatility, market phases, multi-timeframe contractions, liquidity points, and pivot calculations. It provides a clear image of the market's expansion and contraction phases. It's based on an alternative form of technical analysis that reveals the psychological patterns of financial markets through three phases. Unlike the other master pattern indicators that just use highs and lows and aren't as accurate for finding contractions, this one uses actual measures of volatility to find extremely low levels of volatility and has customizable parameters depending on what you want to do. What is the Forex Master Pattern? The Forex Master Pattern is a framework that revolves around understanding market cycles, comprising the three main phases: contraction, expansion, and trend. Contraction Phase: During this phase, the market has low volatility and is consolidating within a narrow range. Institutional volume tends to be low, and it's suggested to avoid trade entries during this period. Expansion Phase: Volatility starts to increase, and there start to be bigger moves in price. Institutional traders start accumulating positions in this phase, and they might manipulate prices to draw in retail traders, creating liquidity for their own buying or selling goals. Trend Phase: This final phase completes the market cycle. Institutional traders begin taking profits, leading to a reversal. This triggers panic among retail traders, resulting in liquidations and stops. This generates liquidity for institutional traders to profit, leaving retail traders with overvalued positions. Value Line: The "value line" acts as the fair value zone or the neutral belief zone where buyers and sellers agree on fair value. It can be likened to the center of gravity and is created during contraction zones. Applications: Identifying these phases and understanding the value lines can help traders determine the market's general direction and make better trading decisions. This isn't a strategy but a concept explaining market behavior, allowing traders to develop various strategies based on these principles The contractions, which are based on volatility calculations, can help you find out when big moves will occur, known as expansions. How traders can use this indicator 1. Identifying Market Phases: Contraction Phase: Look for periods where the market has low volatility and is contracting, indicated by a narrow range and highlighted by the contraction box. During this phase, traders prepare for a breakout but usually avoid making new trades until a clearer trend emerges. Expansion Phase: When the indicator signals an expansion, it suggests that the market is moving out of consolidation and may be beginning a new trend. Traders might look for entry points here, anticipating a continuation of the trend. Trend Phase: As the market enters this phase, traders look for signs of sustained movement in one direction and consider positions that benefit from this trend. 2. Multi-Timeframe Analysis: By looking at multiple timeframes, traders can get a broader view of the market. For instance, a contraction phase in a shorter timeframe within an expansion phase in a longer timeframe might suggest a pullback in an overall uptrend. This indicator comes with a MTF contraction screener that is customizable. 2. Fair Value Lines: The fair value acts like a "center of gravity.". Traders could use this as a reference point for understanding market sentiment and potential reversal points. This indicator shows these values in the middle of the contraction boxes. 3. Volatility Analysis: This indicator's volatility settings can help traders understand the market's current volatility state. High volatility indicates a more active market with larger, faster moves, while low volatility might suggest caution and tighter stop-losses or take-profits. If volatility is contracting, then an expansion is imminent. This indicator shows the volatility with percentile ranks in 0-100 values and also alerts you when volatility is contracting, aka the contraction phase. Volatility Calculations: This indicator uses a geometric standard deviation to measure volatility based on historical price data. This metric quantifies the variability of price changes over a specified lookback period and then computes a percentile rank within a defined sample period. This percentile calculation helps evaluate the current volatility compared to historical levels. Based on the percentile rank, the indicator sets thresholds to determine whether the current volatility is within a range considered "contraction" or not. For example, if there are really low levels of volatility on the percentile rank, then there is currently a contraction phase. The indicator also compares the volatility value against a moving average, where values above the current moving average value signal the expansion phase. Multi-Timeframe Analysis (MTF): This indicator comes with a multi-timeframe table that shows contractions for 5 different timeframes, and the table is customizable. Bands: This indicator comes with bands that are constructed based on the statistical calculations of the standard deviation applied to the log-transformed closing prices. It is commonly assumed that the distribution of prices fits some type of right-skewed distribution. To remove most of the skewness, you can use a log transformation , which makes the distribution more symmetrical and easier to analyze, thus the use of these bands . These bands are in the 2 standard deviation range. You can use these bands to trade at extreme levels. The band parameter is based on the contraction volatility lookback, which is in the Volatility Model Settings tab. Ways the bands could be used with the contractions: 1. Identifying Breakout trades: Contraction Zones: These zones indicate periods of low volatility where the market is consolidating. There are usually narrow price ranges, which are considered a build-up phase before a significant price move in any direction. Bands: When the contraction zone occurs, you might notice the bands tightening around the price on smaller lookback periods, reflecting the decreased volatility. A continuous widening of the bands could then signal the beginning of an expansion phase, indicating a potential breakout opportunity. 2. Enhancing Trade Timing: Before the Breakout: During the contraction phase, the bands might move closer together, reflecting the lower volatility. You can monitor this phase closely and prepare for a potential expansion. The bands can provide additional confirmation; for instance, a price move toward one of the bands might show an extreme occurrence and might show what the direction of the breakout could be. After the breakout: Once the price breaks out of the contraction zone and goes to the expansion phase, and if it coincides with the bands widening significantly, it could reinforce the strength and potential sustainability of the new trend, providing a clearer entry. 3. Price-touching bands during a contraction: If the price repeatedly touches one of the bands during a contraction phase, it might suggest a buildup of pressure in that direction. For example, if the price is consistently touching the upper band even though the bands are narrow, it might suggest bullish pressure that could occur once the expansion phase begin. 4. Price at the band extreme levels during Expansion: If the price is at the extreme levels of the bands once the expansion phase occurs, it might indicate unsustainable levels and a low probability of the price continuing beyond those levels. Potentially signaling that a reversal will occur. Some trades could use these extremes to place entries during the expansion phases. Liquidity Levels: This script comes with liquidity points, whose functionality goes towards identifying pivotal levels in price action, focusing on swing highs and swing lows in the market. These points represent areas where significant buying (for swing lows) or selling (for swing highs) activity has occurred, implying potential levels or resistance in the price movement. These liquidity points, often identified as highs and lows, are points where market participants have shown interest in the past. These levels can act as psychological indications where traders might place orders, leading to increased trading activity when these levels are approached or breached. When used with the Forex Master Pattern phases, liquidity levels can enhance trades placed with this indicator. For instance, if the market is expanding and approaches a significant liquidity level, there might be a higher chance of a breakout or reversal, showing a possible entry or exit point. Liquidity Levels in the Contraction Phase: Accumulation and Distribution: During the contraction phase, liquidity levels can indicate where huge positions are likely accumulating or distributing quietly. If price is near a known liquidity level and in a contraction phase, it might suggest that a large market player is building a position in anticipation of the next move. Breakout Points: Liquidity levels can also give clues about where price could go after the breakout from the contraction phase. A break above a liquidity level might indicate a strong move to come as the market overcomes significant selling pressure. Liquidity Levels in Expansion Phase: Direct Confirmation: As the expansion phase begins, breaking through liquidity levels can confirm the new trend's direction. If the price moves past these levels with huge volume, it might indicate that the market has enough momentum to continue the trend. Target Areas: Liquidity levels can act as target areas during the expansion phase. Traders using this indicator could look to take profits if the price approaches these levels, possibly expecting a reaction from the market.
Pine Script™ indicator
by Traders_Endeavors
2
Master Pattern ScreenerMaster Pattern Screener This is an indicator based on the concept known as the Forex Master Pattern, which contains three phases. The contraction, expansion, and trend phases This indicator, based on your current timeframe, finds out if there is a contraction on 10 symbols that you can customize to suit your needs. How does it work? The indicator is a table, and it finds 10 different symbols on the current timeframe that you have selected. Then it does volume and volatility calculations to determine if a contraction is occurring, which is the first phase and probably the most important phase in the FOREX MASTER PATTERN . This indicator is meant to be used in conjunction with our contraction plotter. We would have placed this indicator in the contraction and expansion plotter, but there were memory limitation issues, so we placed it in a separate indicator. How traders can use this indicator The contraction phase is extremely important because once a contraction is occurring, what always happens is an expansion. Some traders will avoid placing trades in the contraction phase, while others will enter to use the momentum for their trades. This indicator just makes it more convenient to identify the contraction phases. Examples of the indicator: Things you should know The symbols can be customized to whatever you want. You can choose your own stocks, cryptocurrencies, currencies, etc. Make sure that it's exactly the same; if you use, for example, BTCUSDT Coinbase but check on BTCUSDT Binance, then it may show inaccurate results. Since this script involves a decent amount of calculations, it may not work properly in low timeframes, like anything less than a minute.
Pine Script™ indicator
by Traders_Endeavors
2
HHLL and Liquidity LevelsHHLL AND Liquidity Levels Description: This indicator shows hidden support and resistance levels and liquidity levels. The indicator allows traders to select source data from open/close or the high and low. The indicator also allows for appearance customization. How can Higher highs and Lower lows and liquidity levels benefit traders? HHLL refers to a series of higher highs and lower lows in an asset's price trend, which can indicate a potential reversal in the trend. Liquidity, on the other hand, refers to the ease with which an asset can be bought or sold without affecting its price. HHLL can help traders identify potential trends, while liquidity can ensure that trades can be executed smoothly and without significant price impact. How can traders use this indicator? Traders can use the indicator to identify potential market trends and market momentum. When the indicator show a series of higher highs and higher lows it can show a possible uptrend, meanwhile a series of lower lows and lower highs could show a possible uptrend with liquidity to confirm their trading decisions. The script could also capture hidden support and resistance levels by showing areas where liquidity is concentrated and where price has repeatedly made higher highs and lower lows. Features: Support and Resistance levels based on Highs and Lows Zig zags to show the HHLL's Liquidity Levels BOS and CHOCHS labels Here are some examples of the indicator in action: The HHLL and Liquidity Levels indicator being used with the Contraction and Expansion indicator to see when expansions are due and then price retest the liquidity levels.
Pine Script™ indicator
by Traders_Endeavors
Expansion IndexWhat is the expansion index? The expansion index is a concept that charts the relative strength or weakness based on the comparison of recent price changes and overall prices changes for the period. It can be used as an momentum oscillator and show overbought or oversold price conditions by measuring the relation between the sum of "strong" price changes (which can form trends). The Expansion Index is most typically used on an 8 day timeframe. It changes on a scale from −100 to +100, with the overbought and oversold levels marked at +60 and −60, respectively. What about this indicator? This indicator basically shows the rate of expansion from zero, but also has other uses apart from finding over bought or over sold territory. Scenarios: Lets say you are identifying a contraction zone (low volume zone of candles), you can further confirm the contraction if the Index is at or near 0, in this case it might have more strength and play out more accurately the contraction and expansion. Once the Expansion begins and price expands from the 0 level you can determine if its overbought which would be around the 1.00 Level or Oversold which would be at around the -1.00 Levels, and a reversal can follow out. With the rate of change line you can identify trends in market and when reversals will start. This indicator is best used with contraction, expansion, and trend principles also known as the Forex Master Pattern, as it was for what this specific indicator was designed for. Thanks to NNAMDERT for writing this indicator and giving full rights. :)
Pine Script™ indicator
by Traders_Endeavors
Expansion Finder by nnamWhat this Indicator Does This indicator helps the trader locate expansion and contraction areas in an easy visual way. When the asset moves from a contraction phase into an expansion phase, the bars change color (customizable). This allows the trader to recognize areas of contraction and avoid trading them. Once a Bar Range moves outside of the average range as specified by the user, the bar will change color informing the trader that the current bar and by default the market, is moving into an expansion phase from a contraction phase. The indicator works well for those traders that use the Forex Master Pattern to locate Value Lines and Value Areas on the chart giving them an opportunity to draw in these areas with ease. As shown in the screenshot below, the boxes are manually drawn after the trader locates an easily identifiable area of contraction. The Indicator makes it easy to find longer areas of contraction and ignore the noise of smaller contractions. Customizable Settings allow the trader to define the lookback range that determines the number of bars to base the average. A "multiplier" setting allows the trader to easily adjust the Average by changing the average using a simple calculation. Example, if the average multiplier is set to "1", the average will be used. Using the standard average is not always the best way to define these contractions, so traders can set the average to a higher or lower number by using the multiplier, thus changing the calculation but maintaining a consistent number across the chart. Example: If the average is not plotting the contraction correctly, the trader can manually adjust the multiplier down to 0.5 thus adjusting the average in half or increase the multiplier to 2 thus doubling the average. As seen in the screenshot below, this changes the number of expansion bars visible on the chart. Below you can see Value Areas and Value Lines drawn in. These lines assist the trader in defining important levels for future trading. I hope this Indicator helps you locate value areas and value lines on charts in an easy way. Any questions or concerns or suggestions, please do not hesitate to reach out. Happy Trading !!!!
Pine Script™ indicator
by nnamdert
1
Reversal Pivot Overview Introducing the Reversal Pivot indicator - a tool for identifying potential reversal points in price. This algorithm takes into account multiple factors, including price action, volume, and pivot points, to give you a clear and accurate picture of where the market is heading to. How it works The indicator gets expansions and the highs and lows and uses the conditions along with pivots to determine whether a reversal is possible or not. Then it gets the volume to determine how strong this chance of reversal is. How to use The Reversal Pivot indicator alone shouldn't be used to find reversal points but it helps you get a clear insight on where possible reversals could happen for example, you could use it with mean reversion strategies to find the best entries. Red bars signal a bearish reversal Green bars signal a bullish reversal This here is an example of a long entry if you are trading lets say the mean. You can wait for a bullish reversal on the Histogram plot and then enter, a reversal could happen. This is an example of a short entry if you are also trading the mean. Other features This indicator allows you to customize the colors, and the histogram. If you don't like the histogram then you can change its plot style to whatever you would like. Try the Reversal Pivot indicator today and find more possible reversal points!
Pine Script™ indicator
by Traders_Endeavors
Supertrend Rally RollercoasterSupertrend indicator is a trend following indicator similar to moving averages. You can use this on any timeframe if there is enough market data. What about the Supertrend Rally Rollercoaster? The main objective of this indicator is to avoid fake trends as much as possible and find the best bull and bear runs. The best timeframe is the 15 minute timeframe. This indicator consist of 4 Supertrend periods. The most important period of this indicator is the fourth period. This is the period that determines the overall trend for the timeframe. The rest of the bands can be used as confirmations to the trend, determine trade entries, and possible as trade exits and scalping. The main use of this indicator is to be used with value lines and contraction zones, as showed in the picture below. So basically the average price or the mean is the value line produced by the contraction. The expansion follows, and then you must wait for the actual trend. If price is below the value line then you wait for a uptrend and preferably a proper entry. Then you ride it up to the value line as TP, or you can also let it continue on riding, but your preference. If price is above value then, you wait for a downtrend and then short to value. This is the main trading strategy behind this indicator and what it has intended for. The indicator also comes with alerts on when the trend changes and also on the arrows which are take profit symbols. On an uptrend you will see red take profit signals which work with RSI. They tell you when a possible trend reversal can take place.
Pine Script™ indicator
by Traders_Endeavors
Contraction and Expansion PlotterContraction and Expansion Plotter Volatility , Contraction, and Expansion Plotter This indicator is based on the contraction, expansion, and trend phases concept. I wrote this indicator and optimized it to be user-friendly and show the best value levels in various different timeframes. The script itself uses Average True Range , WMAs, RSI , and volatility to determine contraction zones and possible expansions. The contraction phase is the first phase of the market. The script will automatically plot the box, which is the contraction. This is the phase that traders should avoid trading because the value line has yet to be formed. You don't know if the trade will violently go up or down since it is in the next phase. The expansion is the next phase where high volume and volatility occur. I decided to use RSI crossovers and crossunders to help find the expansion zones since it can be pretty difficult to get a program to recognize them and also since this is the phase where accumulation by the big liquidity players, like the institutions, starts. The trend phase isn't yet implemented into the script, but basically is when these big liquidity players start taking profits. This is the part where it tends to go back to the value line , even if it is bullish or bearish . This concept is extremely versatile and can be used to create various different strategies, from long-term strategies to scalping strategies. You can combine this with indicators and not be lost. To be clear, the boxes are the contraction mapped and the zones you should always avoid trading in. On timeframes that are hourly and above, the value lines will automatically be plotted by the script. Some Customization Features: You can decide different line styles like dotted, solid, dashed, or arrows. You can also customize the width of the value line but the recommended widths is either 1 or 2. On default, the value lines retrieved by the contractions will be disabled on timeframes lower than the hourly or daily because it can become unorganized but the option to enable lower timeframe value lines have been added now. The value lines will automatically extend until another contraction is present Option to choose if you want filtered contractions or unfiltered contractions.
Pine Script™ indicator
by Traders_Endeavors
26