OPEN-SOURCE SCRIPT
Clownpumps Higher/Lower Close Analysis (HLCA) Indicator
Updated
The Clownpumps Higher/Lower Close Analysis" (HLCA) indicator offers a visual breakdown of the weekly behavior of a market, illustrating how often it closes higher or lower than its opening price. This comprehensive tool assists traders and analysts in pinpointing recurrent patterns that pertain to specific weekdays, forming a solid basis for a systematic trading strategy.
Features and Interpretation:
Color-Coded Analysis: The HLCA uses two intuitive colors to depict the daily trend:
Green: Indicates that, on average, the market closes higher than its opening price more frequently on that day.
Red: Highlights days when the market generally closes lower than its opening price.
Identifying Recurrent Patterns: Using the HLCA can reveal if a specific weekday consistently sees an asset closing higher or lower. For example, a consistent bullish sentiment on Mondays for a particular stock becomes easily observable.
Comparative Analysis: Deploying the HLCA across a range of assets can uncover trends that are either sector-wide or unique to individual stocks or cryptocurrencies.
Strategic Entry & Exit Points: Knowledge of which days an asset generally closes higher can guide traders in timing their market entries and exits.
Complementary to Other Tools: While the HLCA is a robust tool in itself, its true potential is unlocked when used in tandem with other market indicators. Pairing the daily closing patterns with volume data, for instance, can shed light on the strength of the observed trends.
Cautionary Notes:
Past behavior doesn't predict future performance. Always remember that correlation doesn't guarantee causation, especially when external market-shifting events come into play.
It's recommended to backtest any insights on historical data before committing to live trades.
Features and Interpretation:
Color-Coded Analysis: The HLCA uses two intuitive colors to depict the daily trend:
Green: Indicates that, on average, the market closes higher than its opening price more frequently on that day.
Red: Highlights days when the market generally closes lower than its opening price.
Identifying Recurrent Patterns: Using the HLCA can reveal if a specific weekday consistently sees an asset closing higher or lower. For example, a consistent bullish sentiment on Mondays for a particular stock becomes easily observable.
Comparative Analysis: Deploying the HLCA across a range of assets can uncover trends that are either sector-wide or unique to individual stocks or cryptocurrencies.
Strategic Entry & Exit Points: Knowledge of which days an asset generally closes higher can guide traders in timing their market entries and exits.
Complementary to Other Tools: While the HLCA is a robust tool in itself, its true potential is unlocked when used in tandem with other market indicators. Pairing the daily closing patterns with volume data, for instance, can shed light on the strength of the observed trends.
Cautionary Notes:
Past behavior doesn't predict future performance. Always remember that correlation doesn't guarantee causation, especially when external market-shifting events come into play.
It's recommended to backtest any insights on historical data before committing to live trades.
Release Notes
Certainly!Clownpums HLCA (Higher Lower Close Analyzer)
Description:
The "Clownpums HLCA" is a versatile trading tool tailored to identify and visualize patterns related to the market's closing behavior on specific weekdays. At its core, the HLCA tracks two primary metrics:
Streaks: How many consecutive days the market has closed higher or lower than its opening.
Weekly Analysis: How many times, on a particular weekday (from Monday to Friday), the market has closed higher or lower than its opening.
Visual Representation:
A green triangle below the candlestick indicates a day where the market closed higher than its opening.
A red triangle above the candlestick signifies a day where the market closed lower.
Labels attached to the candlesticks specify the number of consecutive days of higher or lower closes.
For the weekly analysis, labels show counts in the format "Higher Closes/Lower Closes" for each specific weekday.
How to Use the HLCA:
Streaks Analysis: By monitoring streaks of consecutive higher or lower closes, a trader can gauge the momentum and sentiment in the market. Extended streaks could signify strong bullish or bearish trends, while sudden breaks in streaks might indicate potential reversals.
Weekly Closing Patterns: The HLCA provides a unique perspective by breaking down the closing behavior on specific weekdays. This can be incredibly useful for identifying potential recurring patterns or biases on certain days. For instance, if you observe that a stock frequently closes higher on Wednesdays over an extended period, it may be indicative of a trading pattern or external factor affecting the asset on that particular weekday.
Combining Metrics: Using both the streak and weekly analysis together, traders can get a comprehensive view of the market's behavior. For instance, if you're in the midst of a bullish streak and it's a day where historically the market closes higher, this could provide added confidence in a trading decision.
Scanning and Research: Traders can utilize the HLCA across different stocks or cryptocurrencies to identify those with strong weekday biases. Over time, these patterns can offer unique trading opportunities that might be overlooked using traditional analysis methods.
Color Coding:
Green: Indicates bullish behavior where the close was higher than the open.
Red: Indicates bearish behavior where the close was lower than the open.
Open-source script
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 publication is governed by House rules. You can favorite it to use it on a chart.
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.