OPEN-SOURCE SCRIPT
Updated Exhaustion Signal
Exhaustion Signal
The Exhaustion Signal involves monitoring a sequence of consecutive bars within a price chart. This analytical approach aims to identify instances where the price exhibits pronounced movement, potentially indicating an upcoming shift in the current trend. The methodology works by assigning values to bars based on their relationship with the closing price of a bar from four periods ago. If a subsequent bar's closing price surpasses the close of the bar from four periods ago, the count advances. However, if the closing price falls below the close of the bar from four periods ago, the count is reset. This counting process continues until a predetermined count value is reached. The appearance of this count value within the exhaustion signal framework signifies a market that has extended beyond typical levels, suggesting the possibility of a temporary pause or even a reversal in the existing trend.
It's important to note that, as per the principles of this approach, the exhaustion signal by itself is not designed to function as a standalone trading indicator. The broader market context and the application of additional analysis techniques influence its significance and potential trading implications.
The Exhaustion Signal involves monitoring a sequence of consecutive bars within a price chart. This analytical approach aims to identify instances where the price exhibits pronounced movement, potentially indicating an upcoming shift in the current trend. The methodology works by assigning values to bars based on their relationship with the closing price of a bar from four periods ago. If a subsequent bar's closing price surpasses the close of the bar from four periods ago, the count advances. However, if the closing price falls below the close of the bar from four periods ago, the count is reset. This counting process continues until a predetermined count value is reached. The appearance of this count value within the exhaustion signal framework signifies a market that has extended beyond typical levels, suggesting the possibility of a temporary pause or even a reversal in the existing trend.
It's important to note that, as per the principles of this approach, the exhaustion signal by itself is not designed to function as a standalone trading indicator. The broader market context and the application of additional analysis techniques influence its significance and potential trading implications.
Release Notes
Minor backend code change - no impact on user.Release Notes
Modified to allow users to change the number of candles counted (default is nine).Release Notes
Added a second exhaustion signal with a default value of 12.Release Notes
Updated the alert mechanismRelease Notes
Minor clean-up of script.Release Notes
Minor clean-up and updated chart imageRelease Notes
Improved the calculation so both exhaustion signal counts only reset after a successful 12 count (or failure beforehand), rather than having the 9 reset on a successful 9 count.Release Notes
Additional improvements to the calculation function.Candles after the first exhaustion signal (9 count) must now close above (or below) the candle 3 prior, rather than 4 prior. This ensures the second exhaustion signal candle closed above (or below) the first exhaustion signal.
Release Notes
Level 3 signals were triggering on incorrect candles. The logic for the calculation section has been overhauled and fixed.Release Notes
Bug fix on the new calculation - cycles were resetting to 0 instead of 1Release Notes
Another bug fix in the calculation logic.Release Notes
Found another issue with how the cycle was being calculated and reset after implementation of the level 3 signal. It should be resolved now.Release Notes
Minor formatting changesRelease Notes
Minor formatting updatesRelease Notes
Minor formatting updatesRelease Notes
Adding the third level signal created a lot of unexpected complexities to the script. There are certain scenarios of price action that can throw it off and are hard to catch during development and testing.This update attempts to resolve any remaining bugs with the script since introducing the level 3 signal.
Release Notes
Bug fix on some level 3 counts and script optimization.Release Notes
New Feature: AlertsHow to use:
- Enter indicator settings and select which alerts you want to receive (bias and signal level)
- Choose timeframe on chart
- Right click on signal and select Add Alert on ES
- Leave it set to Any alert() function call
Before setting another alert, make sure to update the settings to the alerts you want to receive for that ticker and timeframe.
Additional code cleanup and optimization was done.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.