Bot Signals (Faster + RSI Filter)Bot Signals (Faster + RSI Filter)
This indicator is designed to identify potential buy and sell signals based on a combination of smoothed range filters and an optional RSI confirmation. It works by analyzing price movements and trends, providing clear visual signals for better decision-making.
Features:
Fast and Slow Range Filters: Combines two smoothed range filters with customizable periods and multipliers for flexibility and precision.
RSI Filter: Optional RSI-based confirmation for signals, ensuring additional reliability. Easily toggleable.
Trend Detection: Differentiates between upward and downward trends to provide relevant signals.
Non-Repainting: Signals are based on confirmed data and do not repaint.
Customizable Alerts: Includes alert conditions for both buy and sell signals.
This indicator is ideal for traders looking to follow trends and make quick decisions in volatile markets.
Forecasting
RSI 5min Cross StrategyA short-term mean-reversion strategy that capitalizes on RSI oscillations in volatile markets.
Core Logic:
Entry Signal:
Triggers LONG position when 14-period RSI crosses above 35 on 5-minute charts
Indicates emerging momentum from oversold territory
Exit Signal:
Closes position when 14-period RSI crosses below 65
Captures profit before potential overbought reversal
Key Features:
Designed for high-liquidity markets (FX, crypto, large-cap stocks)
Optimized for ranging/sideways markets
Default 0.1% transaction cost included
Non-repainting signals for reliable backtesting
Rationale:
Uses wider RSI thresholds (35/65 vs standard 30/70) to avoid false signals
Exploits short-term price mean-reversion in 5-minute timeframes
Automated exit prevents emotional decision-making
Ideal For:
Day traders seeking frequent opportunities (6-12 trades/day)
Markets with clear oscillation patterns (e.g., indices, major currency pairs)
Risk Management:
⚠️ Requires strict stop-loss (not included in base script)
⚠️ Performs best when combined with:
Volume confirmation
Support/resistance alignment
Volatility filters (ATR/BB Width)
Strengths ➔ Quick turnaround trades, simple ruleset
Limitations ➔ Choppy markets cause whipsaws, needs trend confirmation
Bedtime BackgroundJust a simple script to indicate when we wont be able to trade, a little help for manual backtesting to get more accurate results
Nadaraya Watson (Lupown) / Owl of Profit remakeNadaraya-Watson Strategy (Lupown)
Big thanks to Lupown for this innovative strategy! This source code is subject to the terms of the Mozilla Public License 2.0, available at mozilla.org
This strategy leverages Nadaraya-Watson Kernel Regression to provide predictive trend analysis, combined with ATR-based dynamic bands for identifying trade opportunities.
Features:
Nadaraya-Watson Kernel Regression:
Predicts price trends using a rational quadratic kernel.
Configurable parameters for lookback window (h) and weighting (r) allow fine-tuning.
Regression begins after a customizable number of bars for improved accuracy.
ATR-Based Bands:
Upper and lower bands are calculated by adding/subtracting a multiple of ATR to/from the regression estimate.
Bands serve as dynamic support and resistance levels.
Trend Detection:
Smooth or reactive color changes based on crossovers or rate-of-change mechanisms.
Bullish and bearish trend shifts are clearly visualized.
Entry and Exit Logic:
Long Condition:
Triggered when the price crosses below the lower ATR-based band.
Closes any short position before opening a long position.
Short Condition:
Triggered when the price crosses above the upper ATR-based band.
Closes any long position before opening a short position.
Visualization:
Regression Estimate: The middle band is plotted with dynamic colors indicating bullish (green) or bearish (red) trends.
ATR-Based Bands: Upper and lower bands are displayed as green and red lines, respectively.
Trend Indicators: Buy and sell signals are visualized with symbols (🍀 for bullish and 🥀 for bearish).
Alerts:
Alerts for price crossing the upper or lower bands.
Alerts for bullish and bearish trend shifts based on regression changes.
This strategy provides a robust framework for predictive trading using statistical regression and dynamic volatility bands. Use it for backtesting and further customization to fit your trading needs.
Visit my website for more tools and strategies: bybitindicators.com
Happy trading!
Quarterly Divider The "Quarterly Divider" script draws vertical lines at the start of each quarter (January, April, July, October) on the Trading View chart. It also labels each line with the corresponding quarter (Q1, Q2, Q3, Q4) at the bottom of the line, making it easy to visualize the start of each trading quarter. The color and thickness of the lines are customizable
NB. works effectively is used on the weekly timeframe
Moving Average Crossoverchatgpt testing script
New to pine script trading and copied this script from chatgpt and just want to see what it does \.
No idea what the words mean even though i'm a python programmer
Long ETH & crypto Neural Network Strategy. Showing Long!Hi there! I’ve been working on a trading strategy that combines three key technical indicators: Bollinger Bands (to assess price volatility), Average True Range (ATR, for tracking price range movements), and Chaikin Money Flow (CMF, which measures the inflow and outflow of capital in an asset). These indicators are normalized and combined into a single score—essentially a simplified version of machine learning that mimics the behavior of a neural network. When this score rises above 0.5, it suggests a buy opportunity, and when it drops below -0.5, it indicates a potential sell. The best part? You can fine-tune the weight of each indicator to align with different market conditions. The script also visualizes the combined score on the chart to make signal tracking easier!
This strategy is designed specifically for Ethereum (ETH) on a 4-hour chart. The results are impressive: if you had only taken long trades with this strategy, (this strategy ONLY performs LONG trades) then each trade would have yielded approximately 4% on average—across hundreds of trades in the dataset! The performance includes fees and commissions.
For real-time trading, I’ve also created a matching indicator script. You can set up 'buy' or 'sell' alerts directly from the chart with a right click. These alerts can be sent to your phone, email, or even your trading broker, enabling automated trades based on this strategy. If you’d like assistance setting this up, feel free to reach out!
Let me know if this works or if you'd like further tweaks!
Jinx Systems - AdvancedWorking solution to the question, "Hey, where the heck is the market going?"
Run this script on as many securities as one can manage.
Tendencias FX - Multi-Line with Customizable OffsetsIndicator Description (English)
Name: Tendencias FX - Multi-Line with Customizable Offsets (1x..6x)
This script is a multi-purpose trend-following indicator that calculates a central Moving Average (Mid Line) plus a set of 6 different bands (1x to 6x) above and below that average. Each band is determined by a user-defined ATR length and multiplier. Key features include:
Independent MA Types
Choose different moving average methods for the Mid Line and for the ATR calculation.
Available types: SMA, EMA, WMA, RMA, HMA, and ALMA.
Separate Lengths
Configure the length of the Mid Line independently from the ATR length.
This allows fine-tuning of both the central average and the volatility measure.
6 Customizable Multipliers
Bands are calculated for 1x, 2x, 3x, 4x, 5x, and 6x multiples of the chosen ATR.
Each level has its own checkbox in the Inputs tab so you can show or hide them at will.
Color Dynamics
The Mid Line automatically changes color to green when its current value is higher than the previous bar’s value, and red otherwise.
All upper/lower bands are rendered in a neutral gray (#787b86) for easy distinction.
Time Shift (Offset)
An offset parameter allows shifting the entire indicator (Mid Line plus bands) forward (to the right) or backward (to the left) by a certain number of bars.
This can help evaluate leads/lags, or compare the past behavior of these lines against future price developments.
Check Boxes for Visibility
Checkboxes in the Inputs let you toggle 1x..6x band levels.
By default, 1x, 2x, and 3x are visible, while 4x, 5x, and 6x are off.
Overlay with Shared Price Scale
The script is set as overlay=true and uses scale=scale.right, so it draws directly on the main chart and shares the same price axis as your candles.
This indicator is ideal if you want:
A central MA for trend detection.
ATR-based volatility bands (up to 6 multipliers).
Full control over the type and length of both the Mid Line MA and the ATR.
An optional offset to shift the lines in time for backtesting or forward-projection.
Usage Tips
In the Inputs tab, customize:
Mid Line length and ATR length independently.
MA methods for both Mid Line and ATR (SMA, EMA, WMA, RMA, HMA, ALMA).
Band visibility via checkboxes for 1x..6x.
Offset for shifting lines in time.
In the Style tab, you can further customize colors, line widths, and visibility of each element (Mid line, ±1x..±6x).
Breakout with Volume and RSI FilterCommon Causes of the Error
Unintended Line Breaks:
Pine Script does not allow line breaks in the middle of a statement unless properly formatted.
Missing Parentheses or Brackets:
Ensure all (, ), , {, and } are properly closed.
Improper Use of Commas:
Ensure commas are used correctly in function arguments and arrays.
Unclosed Strings:
Ensure all strings are properly closed with double quotes (").
Fixed Pine Script Code
Here’s the corrected version of the Pine Script code, ensuring no unintended line breaks or syntax errors:
Price & P/E Regression with Mean Reversion Zones (6 Years)This indicator is designed to analyze the relationship between a stock's price and its price-to-earnings (P/E) ratio relative to their respective regression trends over a six-year period. Based on research, the indicator highlights mean reversion zones—areas where price and P/E deviate significantly from their historical averages. These zones signal potential overvaluation or undervaluation, providing insights into whether a stock is trading above or below its fair value. By incorporating regression analysis, the tool identifies long-term price and valuation trends, while mean reversion dynamics help anticipate possible corrections or continuations. This approach combines price momentum, valuation insights, and historical behavior to inform both short-term trading opportunities and long-term investment decisions.
Stochastic RSI - 8 TimeframesStochastic RSI - 8 Timeframes (English version)
To configure this indicator, follow the step-by-step below:
Select the setting button in the chart of Stoch RSI MTF:
INPUTS - The first tab of setting :
K = (Smooth K) standard input is 3 and minimun is 1
D = (Smooth D) standard input is 3 and minimun is 1
The RSI lenght and Stochastic lenght standards are 14 candles (for all kinds of timeframes)
RSI Source = close (standard)
Setting and Organize the Timeframe for each channel (1 to 8) --> Default is set from smallest timeframe to largest >>
{Timeframe 1 >> 1 minute, Timeframe 2 >> 5 minutes, Timeframe 3 >> 15 minutes, Timeframe 4>> 1 hour,
Time frame 5 >> 4 hours, Timeframe 6 >> 1 day, Timeframe 7 >> 1 week, Timeframe 8 >> 1 month}
STYLE - The second tab of setting
Select which channel 1 to 8 will be activated throught the K or D curves or boths can be selected
Select the RSI bands (upper, middle and lower)
Colors for configuration: All colors are already configured and follow the sequence (for Knowledge):
1 minute: red (#f23645) - all colors are in 100% opacity
5 minutes: orange (#ff9800)
15 minutes: yellow (#ffeb3b)
1 hour: green (#4caf50)
4 hours: blue (#2962ff)
1 day: Purple (#9c27b0)
1 week: Pink - Light (#f48fb1)
1 month: Pink 400 (#ec407a)
VISIBILITY - The third tab of setting
Default for all timeframes;
Below is Protuguese version (only translation from above):
Para configurar após selecionar este indicador, seguem os passos abaixo: (Português)
Selecionar o botão Configurações do gráfico Stoch RSI MTF :
VALORES - Na primeira tela de configuração:
K = (Smooth K) valor padrão está em 3 e o mínimo é 1
D = (Smooth D)valor padrão está em 3 e o mínimo é 1
O período IFR e o período estocástico está no padrão de 14 candles (para cada tipo de tempo gráfico)
Fonte do IFR = fechamento do candle (padrão)
Configurar nos canais de 1 a 8 os timeframes os tempos gráficos --> Padrão está configurado do menor timeframe para o maior>>
{Timeframe 1 >> 1 minute, Timeframe 2 >> 5 minutes, Timeframe 3 >> 15 minutes, Timeframe 4>> 1 hour,
Time frame 5 >> 4 hours, Timeframe 6 >> 1 day, Timeframe 7 >> 1 week, Timeframe 8 >> 1 month}
ESTILO - Na segunda tela de configuração:
Selecionar qual canal de 1 a 8 será ativado através da curva K ou D ou ambas
Selecionar os limites do RSI mínimo e máximo e a referencia neutra
Cores para configuração : Todas as cores já estão configuradas e seguem abaixo na sequencia (para conhecimento):
1 minute: red (#f23645) - all colors are in 100% opacity
5 minutes: orange (#ff9800)
15 minutes: yellow (#ffeb3b)
1 hour: green (#4caf50)
4 hours: blue (#2962ff)
1 day: Purple (#9c27b0)
1 week: Pink - Light (#f48fb1)
1 month: Pink 400 (#ec407a)
VISIBILIDADE - Na terceira tela de configuração:
Padrão ticks e tempos gráficos para todos os tipos;
UT + STC Signal Strategy with Corrected ATR Stops UT + STC Strategy
Overview
The UT + STC Strategy is a comprehensive trading strategy that combines the UT Bot for dynamic entry and exit signals with the Schaff Trend Cycle (STC) for trend analysis and confirmation. This strategy is designed to optimize trade entries and exits by utilizing advanced indicators and dynamic risk management.
Key Features
1. Dynamic Entry and Exit Signals:
• Utilizes the UT Bot to identify potential buy and sell opportunities based on price action and volatility.
• Entry signals are further validated by the Schaff Trend Cycle (STC), ensuring trades align with the prevailing trend.
2. Multi-Layered Risk Management:
• ATR-based Stop Loss and Take Profit: Dynamically adjusts stop loss and take profit levels based on the Average True Range (ATR), adapting to market volatility.
• Reverse Signal Handling: Positions can be closed or reversed when opposing signals are detected, depending on market conditions.
• Capital Protection Stop: Includes a maximum drawdown feature to safeguard against significant portfolio losses.
3. Trend Confirmation with Schaff Trend Cycle (STC):
• The STC indicator combines MACD with additional smoothing and normalization to identify trends with improved accuracy.
• It provides clear insights into overbought and oversold conditions, enhancing trade timing.
4. Customizable Filters and Parameters:
• Includes flexible settings for EMA filtering, ATR sensitivity, and STC thresholds, allowing traders to tailor the strategy to specific market conditions or preferences.
5. Visual Annotations:
• Entry and exit points are visually marked on the chart with detailed information, including stop loss, take profit, and trend confirmation data.
• Provides clear and actionable insights directly on the trading interface.
Use Case
This strategy is ideal for:
• Trend-following traders: Those who aim to align trades with the market’s dominant trend.
• Volatility-aware traders: Those who want to adjust their risk and reward dynamically based on market conditions.
• Algorithmic enthusiasts: Traders who appreciate automated, rules-based systems for disciplined execution.
How It Works
1. Entry Conditions:
• A buy signal is triggered when the price crosses above the UT trailing stop level, and the STC indicates an oversold condition with a rising trend.
• A sell signal is triggered when the price crosses below the UT trailing stop level, and the STC indicates an overbought condition with a falling trend.
2. Exit Conditions:
• Positions are closed if the price hits the ATR-based stop loss or take profit level.
• Positions are also closed if a reverse signal is generated, though a new position is only opened if the reverse signal aligns with other conditions.
3. Capital Preservation:
• The strategy continuously monitors portfolio drawdown and closes all positions if the maximum drawdown limit is breached.
Benefits
• Dynamic adaptability: Responds to market volatility and changing trends in real time.
• Clear logic and transparency: Provides visual annotations and detailed parameters for every trade decision.
• Robust risk management: Minimizes losses while maximizing profit potential through layered risk controls.
Ichimoku MTF (best MTF 4H - Entry 15M)The Ichimoku Cloud is a collection of technical indicators that show support and resistance levels, as well as momentum and trend direction. It does this by taking multiple averages and plotting them on a chart. It also uses these figures to compute a “cloud” that attempts to forecast where the price may find support or resistance in the future.
The technical indicator shows relevant information at a glance by using averages.
The overall trend is up when the price is above the cloud, down when the price is below the cloud, and trendless or transitioning when the price is in the cloud.
Charles G. Koonitz. “Ichimoku Analysis & Strategies: The Visual Guide to Spot the Trends in Stock Market, Cryptocurrency and Forex Using Technical Analysis and Cloud Charts," Tripod Solutions Inc., 2019.
When Leading Span A is rising and above Leading Span B, this helps to confirm the uptrend and the space between the lines is typically colored green. When Leading Span A is falling and below Leading Span B, this helps confirm the downtrend. The space between the lines is typically colored red in this case.1
Traders will often use the Ichimoku Cloud as an area of support and resistance depending on the relative location of the price. The cloud provides support/resistance levels that can be projected into the future. This sets the Ichimoku Cloud apart from many other technical indicators that only provide support and resistance levels for the current date and time.
Traders should use the Ichimoku Cloud in conjunction with other technical indicators to maximize their risk-adjusted returns. For example, the indicator is often paired with the relative strength index (RSI), which can be used to confirm momentum in a certain direction. It’s also important to look at the bigger trends to see how the smaller trends fit within them. For example, during a very strong downtrend, the price may push into the cloud or slightly above it, temporarily, before falling again. Only focusing on the indicator would mean missing the bigger picture that the price was under strong longer-term selling pressure.
Crossovers are another way that the indicator can be used. Watch for the conversion line to move above the base line, especially when the price is above the cloud. This can be a powerful buy signal. One option is to hold the trade until the conversion line drops back below the base line. Any of the other lines could be used as exit points as well.
Lukhi EMA Crossover_TWL strategy### Description of the Script
This Pine Script implements the **Lukhi EMA Crossover_TWL Strategy** for use on TradingView. It is designed to generate buy and sell signals based on an Exponential Moving Average (EMA) crossover combined with Relative Strength Index (RSI) confirmation. The strategy also incorporates capital management features such as stop-loss and take-profit levels, along with detailed entry labels and failure indications. Here's a detailed breakdown:
---
### **Features**
1. **Customizable Parameters**:
- **Capital**: Define the total trading capital (`₹15,000` by default).
- **Risk per Trade**: Set the maximum amount you are willing to risk per trade (`₹1,000` by default).
- **Target Profit per Trade**: Define the desired profit per trade (`₹5,000` by default).
- **Lot Size**: Specify the number of contracts/lots for the trade (`75` by default for Nifty).
- **Stop-Loss Distance**: Use a fixed point-based stop-loss (`20` points by default).
2. **Indicators**:
- **Exponential Moving Averages (EMAs)**:
- Short EMA (`9-period`) and Long EMA (`21-period`).
- Used to identify trend direction and crossover signals.
- **Relative Strength Index (RSI)**:
- Configurable `14-period` RSI.
- RSI levels help confirm overbought/oversold conditions.
3. **Entry Signals**:
- **Buy Signal**: Triggered when the short EMA crosses above the long EMA and RSI is above 50.
- **Sell Signal**: Triggered when the short EMA crosses below the long EMA and RSI is below 50.
4. **Exit Logic**:
- Stop-loss and take-profit levels are dynamically calculated based on the risk per trade and position size.
- The script automatically exits the trade when either the stop-loss or take-profit levels are reached.
5. **Visual Elements on Chart**:
- **EMA Lines**:
- Plots the short EMA (blue) and long EMA (orange) on the chart for easy visualization.
- **Buy and Sell Labels**:
- Buy and sell signals are marked on the chart with labels showing:
- Entry price
- Target price
- Stop-loss price
- **Failure Indicators**:
- Displays a red cross on the chart if a stop-loss is hit (indicating a failed trade).
---
### **How It Works**
1. **Setup**:
- The script calculates the short and long EMAs using the closing prices of the selected asset.
- RSI is calculated for additional confirmation of trade signals.
2. **Signals**:
- A **Buy Signal** is generated when:
- Short EMA crosses above the long EMA.
- RSI is above 50 (indicating bullish momentum).
- A **Sell Signal** is generated when:
- Short EMA crosses below the long EMA.
- RSI is below 50 (indicating bearish momentum).
3. **Risk Management**:
- Position size is determined dynamically using the stop-loss distance and risk per trade.
- Stop-loss and take-profit levels are calculated for both long and short trades.
4. **Trade Execution**:
- The script automatically places orders based on buy/sell signals and exits them when stop-loss or take-profit levels are reached.
5. **Visual Feedback**:
- The chart displays the calculated entry, stop-loss, and target prices for each signal.
- Failed trades (where stop-loss is hit) are marked with a red cross.
---
### **Applications**
- Suitable for trading Nifty and other similar instruments with defined lot sizes.
- Ideal for traders who follow systematic EMA crossover strategies combined with RSI for confirmation.
- Helps in automating entry and exit signals while incorporating robust risk management.
---
### **Usage**
1. Copy the script into TradingView’s Pine Editor.
2. Adjust the input parameters (capital, risk, lot size, stop-loss, etc.) according to your trading requirements.
3. Apply the strategy to your desired chart and timeframe.
4. Monitor the buy/sell labels and review stop-loss or target levels before placing trades.
---
### **Notes**
- This script is configured for educational purposes and should be tested on a demo account before live trading.
- Proper risk management and backtesting are recommended to adapt the strategy to different market conditions.
Lukhi EMA Crossover_TWL StrategyParameter Breakdown:
Capital: ₹15,000.
Risk Per Trade: ₹1,000.
This determines the amount you're willing to lose per trade.
Take Profit Per Trade: ₹5,000.
Your target profit level.
Stop Loss Distance: Adjusted to match practical scenarios (default: 20 points).
How It Works:
Buy Signal:
A trade is entered when the shorter EMA crosses above the longer EMA, and RSI is above 50.
Stop-loss is set at 20 points below the entry price.
Take-profit is calculated to match the risk-reward ratio based on your input.
Sell Signal:
A trade is entered when the shorter EMA crosses below the longer EMA, and RSI is below 50.
Stop-loss is set at 20 points above the entry price.
Take-profit is calculated similarly.
Failure Detection:
Red cross signals on the chart indicate when a trade fails (stop-loss is hit).
TRENDSYNC BUY/SELL BY SIMPLY_DANTE-FXTrendSync Buy and Sell Indicator
PS: Kindly give me feedback on the comment section, I will really appriciate
Created By: Simply_Dante-FX
About the Author:
Simply_Dante-FX is a skilled trader and developer with a focus on creating custom indicators and strategies for technical analysis. With a strong understanding of market behavior, he has designed the TrendSync Buy and Sell indicator to help traders identify high-probability buy and sell signals based on a combination of trend-following, momentum, and price action strategies. Simply_Dante-FX aims to provide tools that enhance trading decisions and improve the overall trading experience.
---
Description:
The TrendSync Buy and Sell indicator is designed to help traders identify potential buy and sell signals based on a combination of trend-following and momentum-based strategies. This custom indicator combines a range of technical tools, including the Simple Moving Average (SMA), Average True Range (ATR), and the Relative Strength Index (RSI), to filter and confirm entry points.
---
How It Works:
1. Trend Identification (SMA):
- The indicator uses the 200-period Simple Moving Average (SMA) to determine the overall trend direction.
- A Buy Signal is generated when the price is above the SMA, indicating an uptrend.
- A Sell Signal is generated when the price is below the SMA, indicating a downtrend.
2. Range Filtering (ATR):
- The Average True Range (ATR) is used to filter out signals that occur during periods of low volatility.
- The ATR is multiplied by a user-defined range filter multiplier (default is 1.2) to ensure the signal is coming from a sufficiently volatile market condition.
3. Momentum Confirmation (RSI):
- The RSI is used as a momentum filter. For Buy Signals, the RSI must be above the user-defined threshold (default is 50), indicating bullish momentum.
- For Sell Signals, the RSI must be below the opposite threshold (100 - RSI Threshold), indicating bearish momentum.
4.Price Action Conditions:
- Buy and Sell signals are further confirmed by price action:
- Buy Signal: Identifies higher lows during an uptrend.
- Sell Signal: Identifies higher highs during an uptrend, or lower highs in a downtrend.
5. Unified Signal:
- The script combines the various conditions to generate a unified signal, ensuring that only high-probability trade opportunities are highlighted.
How to Use It:
1.Buy Signal: Look for a green label below the bar, which indicates a potential buying opportunity. This signal is generated when:
- The price is above the 200-period SMA (uptrend).
- The RSI is above the defined threshold (momentum confirmation).
- The ATR-based range filter confirms sufficient market movement.
2. Sell Signal: Look for a red label above the bar, which indicates a potential selling opportunity. This signal is generated when:
- The price is below the 200-period SMA (downtrend).
- The RSI is below the defined threshold (momentum confirmation).
- The ATR-based range filter confirms sufficient market movement.
3. Visual Confirmation: The script also plots the 200-period SMA for easy identification of the overall trend direction.
4.Alert Setup: You can set up an alert using the “Unified Buy/Sell Alert” condition to notify you when a buy or sell signal is triggered.
Disclaimer:
- Risk Warning: The TrendSync Buy and Sell indicator is a tool for technical analysis and is not a guaranteed method for predicting market movements. Trading carries risk, and it is essential to use proper risk management techniques and not rely solely on any one indicator.
- No Financial Advice: This indicator does not constitute financial advice, and the author, Simply_Dante-FX, does not take responsibility for any trading losses or profits resulting from the use of this tool.
- Performance: Past performance is not indicative of future results. Always conduct your own analysis and use additional tools and strategies to confirm trade decisions.
Use this indicator with caution, and always ensure that you understand the risks involved in trading before committing real capital.
Best Buffett Ratio w/ Std-Dev Offset + Conditional PlotSummary:
This script provides a visually clear way to track the so-called “Buffett Ratio,”
a popular market valuation gauge which compares the total US stock market cap
to the country’s GDP. In addition, it plots a “hardcoded” long-term trend line,
along with fixed standard-deviation bands (in log space), and uses background colors
to signal potentially overvalued or undervalued zones.
What Is the Buffett Ratio?
Often credited to Warren Buffett, the Buffett Ratio (or Buffett Indicator) measures:
(Total US Stock Market Capitalization) / (US GDP)
• A higher ratio typically means equities are more expensive relative to the size of the economy.
• A lower ratio suggests equities may be more attractively valued compared to GDP.
Historically, the ratio has tended to drift upward over many decades,
as the US economy and stock markets grow, but it still oscillates around some trend over time.
How to Use
1) Add to Chart:
- In TradingView, simply apply the indicator (it internally fetches CRSPTM1 & GDP data).
2) Tweak Inputs:
- Log Offset for 1σ: Adjust how wide the ±1σ/±2σ bands appear around the trend.
- Anchor Points: Edit startYear , endYear , startRatio , endRatio
if you want a different slope or different “fair value” anchors.
3) Interpretation:
- If the indicator is above +2σ (red line) , it’s historically “very expensive,”
often leading to lower future returns over the long term.
- If it’s below –2σ (green line) , it’s historically “deep undervaluation,”
often pointing to better future returns over time.
- The intermediate zones show degrees of mild over- or undervaluation.
How This Script Works
1) Buffett Ratio Calculation:
- The script requests data from TradingView’s built-in CRSPTM1 index (total US market cap).
- It also requests US GDP data via request.economic("US", "GDP") .
- If GDP data is missing, the ratio becomes na on that bar.
2) Hardcoded Trend Line:
- Rather than a rolling average, the script uses two “anchors” (e.g. 1950 → 0.30 ratio, 2024 → 1.25 ratio)
and solves for a single log-growth rate to produce a steady upward slope.
3) Fixed Standard Deviations in Log Space:
- The script takes the log of the trend line, then applies a fixed offset for ±1σ and ±2σ,
creating proportional bands that do not “expand/contract” from a rolling window.
4) Conditional Plotting:
- The script only begins plotting once the Buffett Ratio actually has data (around 2011).
5) Color-Coded Zones:
- Above +2σ: red background (historically very expensive)
- Between +1σ and +2σ: yellow background (moderately expensive)
- Between –1σ and +1σ: no background color (around normal)
- Between –2σ and –1σ: aqua background (moderately undervalued)
- Below –2σ: green background (historically deep undervaluation)
Final Notes
• Data Limitations: US GDP data and CRSPTM1 only go back so far, so this starts around 2011.
• Long-Term vs. Short-Term: Best viewed on monthly/quarterly charts and interpreted over years.
• Tuning: If you believe structural changes have shifted the ratio’s fair slope,
adjust the code’s anchors or log offsets.
Enjoy, and use responsibly!
