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Inversion Fair Value Gap Oscillator | Flux Charts💎 GENERAL OVERVIEW Introducing the new Inversion Fair Value Gap Oscillator (IFVG Oscillator) indicator! This unique indicator identifies and tracks Inversion Fair Value Gaps (IFVGs) in price action, presenting them in an oscillator format to reveal market momentum based on IFVG strength. It highlights bullish and bearish IFVGs while enabling traders to adjust detection sensitivity and apply volume and ATR-based filters for more precise setups. For more information about the process, check the "📌 HOW DOES IT WORK" section. Features of the new IFVG Oscillator: Fully Customizable FVG & IFVG Detection An Oscillator Approach To IFVGs Divergence Markers For Potential Reversals Alerts For Divergence Labels Customizable Styling 📌 HOW DOES IT WORK? Fair Value Gaps are price gaps within bars that indicate inefficiencies, often filled as the market retraces. An Inversion Fair Value Gap is created in the opposite direction once a FVG gets invalidated. The IFVG Oscillator scans historical bars to identify these gaps, then filters them based on ATR or volume. Each IFVG is marked as bullish or bearish according to the opposite direction of the original FVG that got invalidated. An oscillator is calculated using recent IFVGs with this formula : 1. The Oscillator starts as 0. 2. When a new IFVG Appears, it contributes (IFVG Width / ATR) to the oscillator of the corresponding type. 3. Each confirmed bar, the oscillator is recalculated as OSC = OSC * (1 - Decay Coefficient) The oscillator aggregates and decays past IFVGs, allowing recent IFVG activity to dominate the signal. This approach emphasizes current market momentum, with oscillations moving bullish or bearish based on IFVG intensity. Divergences are marked where IFVG oscillations suggest potential reversals. Bullish Divergence conditions are as follows : 1. The current candlestick low must be the lowest of last 25 bars. 2. Net Oscillator (Shown in gray line by default) must be > 0. 3. The current Bullish IFVG Oscillator value should be no more than 0.1 below the highest value from the last 25 bars. Traders can use divergence signals to get an idea of potential reversals, and use the Net IFVG Oscillator as a trend following marker. 🚩 UNIQUENESS The Inversion Fair Value Gap Oscillator stands out by converting IFVG activity into an oscillator format, providing a momentum-based visualization of IFVGs that reveals market sentiment dynamically. Unlike traditional indicators that statically mark IFVG zones, the oscillator decays older IFVGs over time, showing only the most recent, relevant activity. This approach allows for real-time insight into market conditions and potential reversals based on oscillating IFVG strength, making it both intuitive and powerful for momentum trading. Another unique feature is the combination of customizable ATR and volume filters, letting traders adapt the indicator to match their strategy and market type. You can also set-up alerts for bullish & bearish divergences. ⚙️ SETTINGS 1. General Configuration Decay Coefficient -> The decay coefficient for oscillators. Increasing this setting will result in oscillators giving the weight to recent IFVGs, while decreasing it will distribute the weight equally to the past and recent IFVGs. 2. Fair Value Gaps Zone Invalidation -> Select between Wick & Close price for FVG Zone Invalidation. Zone Filtering -> With "Average Range" selected, algorithm will find FVG zones in comparison with average range of last bars in the chart. With the "Volume Threshold" option, you may select a Volume Threshold % to spot FVGs with a larger total volume than average. FVG Detection -> With the "Same Type" option, all 3 bars that formed the FVG should be the same type. (Bullish / Bearish). If the "All" option is selected, bar types may vary between Bullish / Bearish. Detection Sensitivity -> You may select between Low, Normal or High FVG detection sensitivity. This will essentially determine the size of the spotted FVGs, with lower sensitivies resulting in spotting bigger FVGs, and higher sensitivies resulting in spotting all sizes of FVGs. 3. Inversion Fair Value Gaps Zone Invalidation -> Select between Wick & Close price for IFVG Zone Invalidation. 4. Style Divergence Labels On -> You can switch divergence labels to show up on the chart or the oscillator plot.
Pine Script™ indicator
by fluxchart
EMA Cross + RSI Pullback Strategy with 1H ConfirmationThis strategy combines an ema9 and ema21 cross on the 15min timeframe with a short retest of the RSI 50-line (or close to the RSI 50-line) on the candle before the cross, on the cross, or one or two candles after the cross. The script uses higher time frame confirmation on the 1 hour. It gives only a buy signal on the 15 minute if on the 1 hour the ema21 is above the ema 50. It gives only a sell signal on the 15 minute if on the 1 hour the ema21 is below the ema50. It is still in the testing phase. So please backtest this strategy before putting money in the game. I combine my trading with the ATR stoploss finder set on 0.8 (instead of 1.5 default) and aim for RR 1:2 or better. Please feel free to comment (nicely and polite) ;)
Pine Script™ strategy
by mikevdbosch
Rikki's DikFat Buy/Sell OscillatorAttached we have a very simple Buy/Sell Oscillator. This script will color candles red when price is bear trending and green when price is bull trending. I have taken elements of our CCI color signaler indicator found here: to make this very simple and easy to read candlestick color oscillator for traders both new and seasoned. The the red candles color red as a result of the fuchsia CCI condition on the previously mentioned indicator. The green candles color as a result of the black CCI color condition on the previously mentioned script. The script was modified to run the black CCI condition anywhere the fuchsia condition is not displayed and the colors were changed to red and green for a clean visual representation on the chart. I have not quite got the wick and border colors correct. For some reason they keep reverting when you click out of the script setting. Will update once complete. The code and script are public. Enjoy :)
Pine Script™ indicator
by Midgar-
Probabilistic Trend Oscillator** MACD PLOTS ARE NOT PART OF THE INDICATOR IT IS FOR COMPARSION** The "Probabilistic Trend Oscillator" is a technical indicator designed to measure trend strength and direction by analyzing price behavior relative to a moving average over both long-term and short-term periods. This indicator incorporates several innovative features, including probabilistic trend detection, enhanced strength scaling, and percentile-based thresholds for identifying potential trend reversals. Key Components Inputs: The indicator allows users to customize several key parameters: EMA Length defines the period for the Exponential Moving Average (EMA), which serves as a baseline to classify trend direction. Long and Short Term Lengths provide customizable periods for analyzing trend strength over different timeframes. Signal Line Length is used to smooth the trend strength data, helping users spot more reliable trend signals. Extreme Value Lookback Length controls how far back to look when calculating percentile thresholds, which are used to identify overbought and oversold zones. Trend Classification: The indicator categorizes price behavior into four conditions: Green: Price closes above the open and is also above the EMA, suggesting a strong upward trend. Red: Price closes below the open but is above the EMA, indicating weaker upward pressure. Green1: Price closes above the open but remains below the EMA, representing weak upward movement. Red1: Price closes below the open and the EMA, signaling a strong downward trend. Trend Strength Calculation: The script calculates long-term and short-term trend values based on the frequency of these trend conditions, normalizing them to create probabilistic scores. It then measures the difference between the short-term and long-term trend values, creating a metric that reflects the intensity of the current trend. This comparison provides insight into whether the trend is strengthening or weakening. Enhanced Trend Strength: To emphasize significant movements, the trend strength metric is scaled by the average absolute price change (distance between close and open prices). This creates an "enhanced trend strength" value that highlights periods with high momentum. Users can toggle between two variations of trend strength: Absolute Trend Strength is a straightforward measure of the trend's force. Relative Trend Strength accounts for deviations between short term and long term values, focusing on how current price action differs from a long term behavior. Percentile-Based Thresholds: The indicator calculates percentile thresholds over the specified lookback period to mark extreme values: The 97th and 3rd percentiles act as overbought and oversold zones, respectively, indicating potential reversal points. Intermediate levels (75th and 25th percentiles) are added to give additional context for overbought or oversold conditions, creating a probabilistic range. Visualization: The selected trend strength value (either absolute or relative) is plotted in orange. Overbought (green) and oversold (red) percentiles are marked with dashed lines and filled in blue, highlighting potential reversal zones. The signal line—a smoothed EMA of the trend strength—is plotted in white, helping users to confirm trend changes. A gray horizontal line at zero acts as a baseline, further clarifying the strength of upward vs. downward trends. Summary This indicator provides a flexible, probabilistic approach to trend detection, allowing users to monitor trend strength with customizable thresholds and lookback periods. By combining percentile-based thresholds with enhanced trend strength scaling, it offers insights into market reversals and momentum shifts, making it a valuable tool for both trend-following and counter-trend trading strategies.
Pine Script™ indicator
by federalTacos5392b
Stormico Screener 40, EMA 80 (Slow Stochastic 8)This screener is a tribute to Alexandre Wolwacz, known as "Stormer," one of the most influential traders in the Brazilian financial market. Stormer is renowned for his experience and skill in technical analysis, as well as his dedication to teaching trading strategies to traders at all levels. He is particularly known for his focus on strategies with a positive risk-reward ratio and low drawdown, something he conveys to his followers with clarity and practicality. The screener presented here uses a setup frequently employed by Stormer to capture pullbacks in uptrends, focusing on strategic entries, short stops, and long targets. It utilizes an 8-period Slow Stochastic and an 80-period Exponential Moving Average (EMA) and is suitable for Day Trading, Swing Trading, and Position Trading on weekly charts. Main Elements of the Setup: 80-Period Exponential Moving Average (EMA): The 80 EMA is used as a trend filter. When the price is above it, we consider an uptrend and look for buying opportunities. When the price is below it, buy trades are avoided, prioritizing trades that follow the upward trend. Slow Stochastic Oscillator: The 8-period Slow Stochastic is used to capture entry points during pullbacks. In an uptrend, we look for moments when the oscillator reaches oversold levels (below 20), indicating a possible entry at an attractive price while remaining aligned with the main market direction. Entry and Exit Criteria: Buy: The entry occurs when the stochastic oscillator is in oversold levels and the price stays above an ascending 80 EMA with a bullish candle or inside bar, or when the stochastic turns upward. Short Stop: The stop-loss is positioned below a recent support level, limiting risk and minimizing drawdown. Long Target: Once in operation, the goal is to ride the trend with wider targets to maximize gains. The target suggested by Stormer can be set at twice the risk (2x Risk) or the previous high on the chart. Positive Risk-Reward Ratio and Low Drawdown With a short stop and a larger profit target, this setup is ideal for capturing entries with a favorable risk-reward ratio, minimizing drawdown and maximizing profit potential in trades that follow the trend. This screener applies this setup across 40 assets, identifying the best opportunities according to the "Stormer" method. It displays the 8 and 80 EMAs and can be complemented by the Stormico Screener 40, Slow Stochastic (EMA 80). The setup was also a favorite of his daughter Carol, who contributed greatly to live sessions and classes with Stormer. This screener honors both of them and Alexandre Wolwacz’s methodology, with deep respect for all he has contributed to the market and his students.
Pine Script™ indicator
by roblesdrum
Stormico Screener 40, Slow Stochastic (EMA 80)This screener is a tribute to Alexandre Wolwacz, known as "Stormer," one of the most influential traders in the Brazilian financial market. Stormer is renowned for his experience and skill in technical analysis, as well as his dedication to teaching trading strategies to traders at all levels. He is particularly known for his focus on strategies with a positive risk-reward ratio and low drawdown, something he conveys to his followers with clarity and practicality. The screener presented here uses a setup frequently employed by Stormer to capture pullbacks in uptrends, focusing on strategic entries, short stops, and long targets. It utilizes an 8-period Slow Stochastic and an 80-period Exponential Moving Average (EMA) and is suitable for Day Trading, Swing Trading, and Position Trading on weekly charts. Main Elements of the Setup: 80-Period Exponential Moving Average (EMA): The 80 EMA is used as a trend filter. When the price is above it, we consider an uptrend and look for buying opportunities. When the price is below it, buy trades are avoided, prioritizing trades that follow the upward trend. Slow Stochastic Oscillator: The 8-period Slow Stochastic is used to capture entry points during pullbacks. In an uptrend, we look for moments when the oscillator reaches oversold levels (below 20), indicating a possible entry at an attractive price while remaining aligned with the main market direction. Entry and Exit Criteria: Buy: The entry occurs when the stochastic oscillator is in oversold levels and the price stays above an ascending 80 EMA with a bullish candle or inside bar, or when the stochastic turns upward. Short Stop: The stop-loss is positioned below a recent support level, limiting risk and minimizing drawdown. Long Target: Once in operation, the goal is to ride the trend with wider targets to maximize gains. The target suggested by Stormer can be set at twice the risk (2x Risk) or the previous high on the chart. Positive Risk-Reward Ratio and Low Drawdown With a short stop and a larger profit target, this setup is ideal for capturing entries with a favorable risk-reward ratio, minimizing drawdown and maximizing profit potential in trades that follow the trend. This screener applies this setup across 40 assets, identifying the best opportunities according to the "Stormer" method. It displays the 8 and 80 EMAs and can be complemented by the Stormico Screener 40, EMA 80 (Slow Stochastic 8). The setup was also a favorite of his daughter Carol, who contributed greatly to live sessions and classes with Stormer. This screener honors both of them and Alexandre Wolwacz’s methodology, with deep respect for all he has contributed to the market and his students.
Pine Script™ indicator
by roblesdrum
Enhanced Chaikin Money FlowEnhanced Chaikin Money Flow (CMF) with Normalized Distribution The Enhanced Chaikin Money Flow (CMF) is a sophisticated version of Marc Chaikin's classic volume-weighted indicator that measures buying and selling pressure. This version incorporates statistical normalization and advanced smoothing techniques to provide more reliable signals. Key Features Normalized distribution (z-score) for better historical comparison Multiple smoothing options (SMA, EMA, WMA, RMA) for noise reduction Standard deviation bands (1σ and 2σ) to identify extreme readings Adjustable parameters for customization Alert system for extreme readings Interpretation Values represent standard deviations from the mean Above 0: Indicates net buying pressure Below 0: Indicates net selling pressure Outside ±2σ bands: Suggests extreme market conditions Crossovers of standard deviation bands may signal potential reversals Technical Details The indicator combines volume with price location within a bar to determine buying/selling pressure, then normalizes these values using a rolling z-score calculation. This normalization allows for better historical comparison and more reliable overbought/oversold signals. Best used in conjunction with price action and other indicators for confirmation of potential market turns or trend strength.
Pine Script™ indicator
by coffeequantz
Alex JMA RSX Clone with Price & Divergence [LazyBear]Indicator Description: RSX Indicator (RSXC_LB): This script is based on a clone of the JMA RSX (Relative Strength Index clone by LazyBear). It is a momentum-based indicator that helps identify overbought and oversold levels, as well as potential trend reversals. Functional Changes: Convergence is now marked with a white line on the RSX plot. Bullish Divergence is marked with a green line, indicating potential upward movement. Bearish Divergence is marked with a red line, indicating potential downward movement. The default state is marked with a blue line. Strong Divergences (both bullish and bearish) are highlighted with triangle markers on the chart. Updated Features: The script now visualizes convergence and divergence more clearly using distinct colors: White: Convergence (indicates potential trend strength). Green: Bullish divergence (possible price increase). Red: Bearish divergence (possible price decrease). Blue: Neutral/default state. Triangle markers indicate strong divergences, making it easier for the user to spot critical moments. This visual enhancement aims to provide clearer and more intuitive signals for traders using the RSX indicator, helping them identify trend changes and reversals more effectively.
Pine Script™ indicator
by grantmax
Depth Trend Indicator - RSIDepth Trend Indicator - RSI This indicator is designed to identify trends and gauge pullback strength by combining the power of RSI and moving averages with a depth-weighted calculation. The script was created by me, Nathan Farmer and is based on a multi-step process to determine trend strength and direction, adjusted by a "depth" factor for more accurate signal analysis. How It Works Trend Definition Using RSI: The RSI Moving Average ( rsiMa ) is calculated to assess the current trend, using customizable parameters for the RSI Period and MA Period . Trends are defined as follows: Uptrend : RSI MA > Critical RSI Value Downtrend : RSI MA < Critical RSI Value Pullback Depth Calculation: To measure pullback strength relative to the current trend, the indicator calculates a Depth Percentage . This is defined as the portion of the gap between the moving average and the price covered by a pullback. Depth-Weighted RSI Calculation: The Depth Percentage is then applied as a weighting factor on the RSI Moving Average , giving us a Weighted RSI line that adjusts to the depth of pullbacks. This line is rather noisy, and as such we take a moving average to smooth out some of the noise. Key Parameters RSI Period : The period for RSI calculation. MA Period : The moving average period applied to RSI. Price MA Period : Determines the SMA period for price, used to calculate pullback depth. Smoothing Length : Length of smoothing applied to the weighted RSI, creating a more stable signal. RSI Critical Value : The critical value (level) used in determining whether we're in an uptrend or a downtrend. Depth Critical Value : The critical value (level) used in determining whether or not the depth weighted value confirms the state of a trend. Notes: As always, backtest this indicator and modify the parameters as needed for your specific asset, over your specific timeframe. I chose these defaults as they worked well on the assets I look at, but it is likely you tend to look at a different group of assets over a different timeframe than what I do. Large pullbacks can create large downward spikes in the weighted line. This isn't graphically pleasing, but I have tested it with various methods of normalization and smoothing and found the simple smoothing used in the indicator to be best despite this.
Pine Script™ indicator
by nathanfarmer
Stablecoin Dominance Oscillator The SDO is a normalized oscillator that tracks the relationship between stablecoin market capitalization (USDT + USDC + DAI) and total crypto market capitalization. It helps identify periods where stablecoins represent an unusually high or low portion of the total crypto market value. Key components: Main Signal (Blue Line): Shows the normalized deviation of stablecoin dominance from its trend. Higher values indicate higher stablecoin dominance relative to history (which often corresponds with market bottoms/fear), while lower values indicate lower stablecoin dominance (often seen during strong bull markets/greed). Dynamic Bands (Gray): These adapt to market volatility, expanding during volatile periods and contracting during stable periods Generally suggest temporary boundaries for the oscillator Volatility Reference (Purple Line): Shows the ratio between short-term and long-term volatility Higher values indicate more volatile market conditions Helps contextualize the reliability of the current signal The indicator uses a 500-period lookback for baseline calculations and a 15-period Hull Moving Average for smoothing, making it responsive while filtering out noise. The final signal is normalized and volatility-adjusted to maintain consistent readings across different market regimes.
Pine Script™ indicator
by coffeequantz
Custom AO with Open Difference**Custom AO with Open Difference Indicator** This indicator, *Custom AO with Open Difference*, is designed to help confirm trend direction based on the relationship between the daily open price and recent 4-hour open prices. It calculates the Awesome Oscillator (AO) based on the difference between the daily open price and the average of the previous six 4-hour open prices. This approach provides insight into whether the current open price is significantly diverging from recent short-term opens, which can indicate a trend shift or continuation. ### Technical Analysis and Features 1. **Trend Confirmation**: By comparing the daily open with the mean of six previous 4-hour open prices, this indicator helps identify trends. When the current daily open is below the average of recent opens, the AO value will plot as green, signaling potential upward momentum. Conversely, if the daily open is above the recent average, the histogram will plot red, suggesting possible downward momentum. 2. **Non-Repainting**: Since it relies on completed 4-hour and daily open prices, this indicator does not repaint, ensuring that all values remain fixed after the close of each period. This non-repainting feature makes it suitable for backtesting and reliable for trend confirmation without fear of historical changes. 3. **AO Mean Calculation**: The indicator calculates the average of six previous 4-hour open prices, providing a smoothed value to reduce short-term noise. This helps in identifying meaningful deviations, making the AO values a more stable basis for trend determination than using just the latest 4-hour or daily open. 4. **Histogram for Visual Clarity**: The indicator is displayed as a histogram, making it easy to identify trend changes visually. If the AO bar turns green, it’s a signal that the 4-hour average is below the daily open, suggesting an uptrend or bullish momentum. Red bars indicate that the daily open is above the recent 4-hour averages, potentially signaling a downtrend or bearish momentum. ### Practical Application The *Custom AO with Open Difference* is a versatile tool for confirming the open price trend without needing complex oscillators or lagging indicators. Traders can use this tool to gauge the market sentiment by observing open price variations and use it as a foundation for decision-making in both short-term and daily timeframes. Its non-repainting nature adds reliability for traders using this indicator as part of a broader trading strategy.
Pine Script™ indicator
by CocoPine
Average Yield InversionDescription: This script calculates and visualizes the average yield curve spread to identify whether the yield curve is inverted or normal. It takes into account short-term yields (1M, 3M, 6M, 2Y) and long-term yields (10Y, 30Y). Positive values: The curve is normal, indicating long-term yields are higher than short-term yields. This often reflects economic growth expectations. Negative values: The curve is inverted, meaning short-term yields are higher than long-term yields, a potential signal of economic slowdown or recession. Key Features: Calculates the average spread between long-term and short-term yields. Displays a clear graph with a zero-line reference for quick interpretation. Useful for tracking macroeconomic trends and potential market turning points. This tool is perfect for investors, analysts, and economists who need to monitor yield curve dynamics at a glance.
Pine Script™ indicator
by cryptoradz
On Balance Volume Oscillator of Trading Volume TrendOn Balance Volume Oscillator of Trading Volume Trend Introduction This indicator, the "On Balance Volume Oscillator of Trading Volume Trend," is a technical analysis tool designed to provide insights into market momentum and potential trend reversals by combining the On Balance Volume (OBV) and Relative Strength Index (RSI) indicators. Calculation and Methodology * OBV Calculation: The indicator first calculates the On Balance Volume, which is a cumulative total of the volume of up days minus the volume of down days. This provides a running tally of buying and selling pressure. * RSI of OBV: The RSI is then applied to the OBV values to smooth the data and identify overbought or oversold conditions. * Exponential Moving Averages (EMAs): Two EMAs are calculated on the RSI of OBV. A shorter-term EMA (9-period in this case) and a longer-term EMA (100-period) are used to generate signals. Interpretation and Usage * EMA Crossovers: When the shorter-term EMA crosses above the longer-term EMA, it suggests increasing bullish momentum. Conversely, a downward crossover indicates weakening bullish momentum or increasing bearish pressure. * RSI Divergences: Divergences between the price and the indicator can signal potential trend reversals. For example, if the price is making new highs but the indicator is failing to do so, it could be a bearish divergence. * Overbought/Oversold Conditions: When the RSI of OBV is above 70, it suggests the market may be overbought and a potential correction could be imminent. Conversely, when it is below 30, it suggests the market may be oversold. Visual Representation The indicator is plotted on a chart with multiple lines and filled areas: * Two EMAs: The shorter-term EMA and longer-term EMA are plotted to show the trend of the OBV. * Filled Areas: The area between the two EMAs is filled with a color to indicate the strength of the trend. The color changes based on whether the shorter-term EMA is above or below the longer-term EMA. * RSI Bands: Horizontal lines at 30 and 70 mark the overbought and oversold levels for the RSI of OBV. Summary The On Balance Volume Oscillator of Trading Volume Trend provides a comprehensive view of market momentum and can be a valuable tool for traders. By combining the OBV and RSI, this indicator helps identify potential trend reversals, overbought and oversold conditions, and the strength of the current trend. Note: This indicator should be used in conjunction with other technical analysis tools and fundamental analysis to make informed trading decisions.
Pine Script™ indicator
by da_ji_ba
CCI Threshold StrategyThe CCI Threshold Strategy is a trading approach that utilizes the Commodity Channel Index (CCI) as a momentum indicator to identify potential buy and sell signals in financial markets. The CCI is particularly effective in detecting overbought and oversold conditions, providing traders with insights into possible price reversals. This strategy is designed for use in various financial instruments, including stocks, commodities, and forex, and aims to capitalize on price movements driven by market sentiment. Commodity Channel Index (CCI) The CCI was developed by Donald Lambert in the 1980s and is primarily used to measure the deviation of a security's price from its average price over a specified period. The formula for CCI is as follows: CCI=(TypicalPrice−SMA)×0.015MeanDeviation CCI=MeanDeviation(TypicalPrice−SMA)×0.015​ where: Typical Price = (High + Low + Close) / 3 SMA = Simple Moving Average of the Typical Price Mean Deviation = Average of the absolute deviations from the SMA The CCI oscillates around a zero line, with values above +100 indicating overbought conditions and values below -100 indicating oversold conditions (Lambert, 1980). Strategy Logic The CCI Threshold Strategy operates on the following principles: Input Parameters: Lookback Period: The number of periods used to calculate the CCI. A common choice is 9, as it balances responsiveness and noise. Buy Threshold: Typically set at -90, indicating a potential oversold condition where a price reversal is likely. Stop Loss and Take Profit: The strategy allows for risk management through customizable stop loss and take profit points. Entry Conditions: A long position is initiated when the CCI falls below the buy threshold of -90, indicating potential oversold levels. This condition suggests that the asset may be undervalued and due for a price increase. Exit Conditions: The long position is closed when the closing price exceeds the highest price of the previous day, indicating a bullish reversal. Additionally, if the stop loss or take profit thresholds are hit, the position will be exited accordingly. Risk Management: The strategy incorporates optional stop loss and take profit mechanisms, which can be toggled on or off based on trader preference. This allows for flexibility in risk management, aligning with individual risk tolerances and trading styles. Benefits of the CCI Threshold Strategy Flexibility: The CCI Threshold Strategy can be applied across different asset classes, making it versatile for various market conditions. Objective Signals: The use of quantitative thresholds for entry and exit reduces emotional bias in trading decisions (Tversky & Kahneman, 1974). Enhanced Risk Management: By allowing traders to set stop loss and take profit levels, the strategy aids in preserving capital and managing risk effectively. Limitations Market Noise: The CCI can produce false signals, especially in highly volatile markets, leading to potential losses (Bollinger, 2001). Lagging Indicator: As a lagging indicator, the CCI may not always capture rapid market movements, resulting in missed opportunities (Pring, 2002). Conclusion The CCI Threshold Strategy offers a systematic approach to trading based on well-established momentum principles. By focusing on overbought and oversold conditions, traders can make informed decisions while managing risk effectively. As with any trading strategy, it is crucial to backtest the approach and adapt it to individual trading styles and market conditions. References Bollinger, J. (2001). Bollinger on Bollinger Bands. New York: McGraw-Hill. Lambert, D. (1980). Commodity Channel Index. Technical Analysis of Stocks & Commodities, 2, 3-5. Pring, M. J. (2002). Technical Analysis Explained. New York: McGraw-Hill. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185(4157), 1124-1131.
Pine Script™ strategy
by EdgeTools
RTI Thresholds Index | mad_tiger_slayerOverview of the Script The Relative Trend Index (RTI) Threshold Index is a custom indicator for TradingView that enhances a Relative Trend Index (RTI) . The RTI is designed to reflect the market’s trend strength by comparing the current price to dynamically calculated upper and lower trend boundaries. Additionally, the indicator includes overbought and oversold thresholds, and Trend-coded signals to visually represent market conditions for easier analysis. The RTI Threshold Index is created and meant for long term investments targeted for longer swing trades over a few months to years. How Do Investors Use the RTI Trend Index? In the provided chart image, the indicator is displayed on a Bitcoin price chart. Here’s what each visual component represents: INTENDED USES The RTI Threshold Index is NOT intended for SCALPING. With the nature of its components and calculations. This indicator will give false signals when the Timeframe is too low. The best intended use for high-quality signals are above the 12hr timeframes (Note: Coded to be used above 1 Day Timeframes) The RTI Threshold Index is a TREND-FOLLOWING and MEAN REVERTING INDICATOR . With the explanation below of the image you can see both Trend-Following and Mean Reversion Uses. A VISUAL REPRESENTATION INTENDED USES Relative Trend Index Line (Green/Red): The main RTI line changes colors based on long or short conditions, providing an immediate visual cue of the trend direction. This conditional state enter long when the RTI is greater than the long threshold and will not enter short until it is less than the short threshold. (vice versa) When the RTI is less than the short threshold and will not enter long until it is greater than the long threshold. EMA of RTI: A smoothed version of the RTI in yellow for more stable trend analysis. This EMA can be used for LONGER TERM trends. When the smoothed RTI is above 50, investors can assume that the trend will be in a trending state. Because this is slower than the RTI, you will get slower entries and slower exits. Threshold Lines: Green and red lines for long and short thresholds, along with dashed lines for overbought and oversold levels. These lines can be calibrated to allow the RTI to enter a long trending or short trending state. The lower the value is for Long Threshold line , it will enter a long trend faster. The higher the value for Short Threshold Line , it will exit faster. We can also set Overbought and Oversold Thresholds. With the RTI entering above the Overbought Threshold line, Investors can assume that the environment is getting heated or is overbought. Same for oversold with the RTI entering below the Oversold Threshold line, Investors can assume that the environment is getting heated or is overbought. Gradient Background: Shaded overbought and oversold areas improve readability by distinguishing these zones. This coloring of the shaded area tells us the oversold and overbought levels. Colored Candles: Candles change color based on the RTI condition, aligning the price action visually with the trend status. The Green symbolizes a long state while red symbolizes a short state. __________________________________________________________________________________ The indicator's primary elements include: Input Parameters: Configurable settings for trend length, sensitivity, moving average (MA) period, thresholds, and overbought/oversold levels. RTI Calculation: Computation of trend boundaries and the RTI value based on the price's position within these boundaries. Visual Components: Horizontal threshold lines, plotted RTI values, color-coded candles, and gradient fills for overbought and oversold zones. 1. Input Parameters The script includes several configurable inputs, allowing users to customize the indicator’s sensitivity and behavior according to market conditions: Trend Length: Controls the number of data points for trend calculations. Higher values produce a smoother, less responsive trend, while lower values make the trend more sensitive to recent price changes. Trend Sensitivity: Sets the sensitivity by defining the upper and lower percentiles for the trend boundaries. Higher sensitivity values make the RTI less reactive, while lower values increase responsiveness. MA length: Defines the period for the Exponential Moving Average (EMA) applied to the RTI, smoothing its output. longThreshold and shortThreshold: Set the levels for entering long and short positions. The RTI crossing above longThreshold or below shortThreshold signals a long or short condition, respectively. Overbought and oversold thresholds: When RTI exceeds overbought or falls below oversold, it indicates overbought or oversold market conditions. 2. Relative Trend Index (RTI) Calculation The RTI is calculated by dynamically setting upper and lower trend boundaries: Upper Trend and Lower Trend: Calculated by adding and subtracting the standard deviation of the closing price to/from the close, providing a measure of price variation. upper array and Lower Arrays : Arrays that hold the upper and lower trend values over the specified trend length period. Sorting and Indexing: After sorting these arrays, the values at specific percentiles (based on trend sensitivity) are selected as UpperTrend and LowerTrend. RTI formula: The RTI is calculated by normalizing the close price within the range of UpperTrend and LowerTrend. This yields a percentage that reflects the price's relative position within the trend range. 3. Threshold and Signal Lines Several horizontal lines mark key threshold levels: midline: A dashed line at 50, marking the RTI midpoint. overbought and oversold: Dashed lines for the overbought and oversold levels as set by overbought and oversold. long hline and short hline: Solid lines marking the longThreshold and shortThreshold levels for entering long and short trades. They are colored Green for long threshold and Red for short threshold 4. Long and Short Conditions The script defines long and short conditions based on the RTI’s position relative to the longThreshold and shortThreshold: isLong: Set to true when the RTI exceeds longThreshold, signaling a long condition. isShort: Set to true when the RTI drops below shortThreshold, signaling a short condition. overboughtcandles and oversoldcandles: Boolean variables that indicate when the RTI crosses the overbought or oversold thresholds, enhancing visual feedback. 5. Color Coding Color-coded elements help to visually indicate the RTI's current state: rtiColor: Sets the RTI line color based on the long or short condition (green for long, red for short). obosColor: Colors specific candles in the overbought (yellow) and oversold (purple) regions, adding clarity to these conditions. 6. Plotting and Visualization The following components display the RTI indicator and its conditions visually: RTI and EMA Plot: The RTI line is plotted alongside an EMA line for smooth trend observation. The RTI line uses the conditional colors to indicate market conditions. Background Gradient Fill: Shaded areas between the overbought and oversold levels highlight these zones in the background. Colored Candles: Candles on the price chart are color-coded based on the RTI condition (green for long, red for short), making it easy to see trend direction changes. Overbought and Oversold Gradient Fill: Gradient fills are applied to the overbought and oversold regions, creating a visual effect when the RTI reaches extreme levels. Conclusion The RTI Threshold Indicator is a powerful tool for assessing trend strength and market conditions. With configurable parameters, it adapts well to various timeframes and market environments, providing investors with a reliable means to identify potential entry and exit points. With configurable parameters, RTI Threshold Indicator can identify market conditions for potential buy and sell zones.
Pine Script™ indicator
by mad_tiger_slayer