Indicators used :
The is designed to determine whether the market is choppy or trading sideways, or not choppy and trading within a trend in either direction. Using a scale from 1 - 100, the market is considered to be choppy as values near 100 (over 61.80) and trending when values are lower than 38.20)
The Index ( ) is a that measures the flow of money into and out of a security over a specified period of time. It is related to the ( ) but incorporates , whereas the only considers price. The is calculated by accumulating positive and negative values (see ), then creating a Money Ratio. The Money Ratio is then normalized into the oscillator form.
Using the combination of CI (trend factor as constant) and varying , we can buy/sell when conditions are met
1. drops below 20 and enters inside oversold zone.
2. bounces back above 20.
3. pulls back but remains above 20.
4. A break out above its previous high is a good buy signal.
1. rises above 80 and enters inside overbought zone.
2. drops back below 80.
3. rises slightly but remains below 80.
4. drops lower than its previous low is a signal to short sell or profit booking
Usage & Best setting :
Choose a good volatile stock and a time frame - 5m.
Trending factor : 50
Overbought & Oversold - can be varied as per user
There is stop loss and take profit that can be used to optimise your trade
The template also includes daily square off based on your time.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.