Heisenberg's Uncertainty BandsHeisenberg's Uncertainty Bands:
This is a volatility indicator to determine and visualize the uncertainty in a securities' price.
In quantum mechanics, the uncertainty principle (also known as Heisenberg's uncertainty principle) is any of a variety of mathematical inequalities asserting a fundamental limit to the accuracy with which the values for certain pairs of physical quantities of a particle, such as position, x, and momentum, p, can be predicted from initial conditions.
It plots a Kalman filter average of the bars inside a higher timeframe bar, to attempt to find the most frequent price in that bar's timespan. To plot what is effectively a MA using POC (IvanLabrie's code, credits to the author).
It derives momentum from relative momentum, yielding results more sensitive to changes.
Then it uses Heisenberg's uncertainty principle to find an uncertainty range, and uses it as the channel distance from the POC MA, meaning price is likely to fluctuate within that range.
Since uncertainty must be greater than h/2, adding fib levels will make it a useful indicator. Essentially they are pseudo-Fibonacci Bollinger Bands, which uses a different calculation.
Benefits:
Prices fluctuate, and it can be helpful to visualize price as a range, rather than a single point or line. This visualization can help in managing risk, determining entries and exits, and prevent losing one's position due to price fluctuations during a trend.
If we use a particle model, the uncertainty principle dictates that it is impossible to predict the price within a range. This is a good model for risk management!
Usage:
There are 5 Fibonacci ratio outer bands that can be turned on or off according to user's preference.
Recommended that the length inputs should be increased in higher timeframes, to visualize trends, shorter timeframes should have lower lengths.
GLHF
- DPT
Darkpooltrading
Function Square WaveThis is a script to draw a square wave on the chart, with an indicator for current price.
Markets undergoing Dow Jones or Wyckoff Accumulation/Distribution cycles tend to move in such waves, and if the period of the cycles are detected, a signal for accumulation/distribution phases can be created as an early warning.
Useful inputs:
- Average True Range as the wave height.
- Assumed Wave period as the wave duration.
I divided the current price wave by 2 to make the indicator more visually friendly.
GLHF
- DPT
Function Sawtooth WaveThis is an indicator to draw a sawtooth wave on the chart.
It can be a useful perspective, as decaying markets tend to oscillate in reverse sawtooth waves, and bullish markets can oscillate in conventional sawtooth waves. With the right inputs, it can be an early warning signal for potential movements.
Something I've noted is that large waves cause a ripple effect and sets the frequency for the market until a change occurs. Sawtooth waves may help in capturing ripple waves.
Useful inputs are:
- Average True Range as wave height (amplitude)
- Periodicity of market as wave duration (frequency)
(Inputs will change the wave from conventional to reverse)
I hope that it is helpful.
GLHF
- DPT
