Hybrid = Combining the two main signals into one indicator
BSH = Buy Sell Hold
This indicator looks for a crossover of the moving averages (12ema and 26ema) in order to generate a buy/sell signal and a crossover of the line (12ema minus 26ema) and signal line (9ema of line) in order to generate a completely seperate buy/sell signal. The two buy/sell signals are combined into a hybrid buy/sell/hold indicator which looks for one, neither, or both signals to be "buys." If both signals are buys (fast crossed above slow), a "buy" signal is given (green bar color). If only one signal is a buy, a "hold" signal is given (yellow bar color). If neither signal is a buy, a "sell" signal is given (red bar color). Note: moving averages crossing over is the same thing as the line crossing the zero level in the indicator.
It makes sense to have the indicator loaded as a reference when using this but it isn't required. The lines plotted on the chart are the 12ema and a signal line which is the signal line shown relative to the 12ema rather than the line. The 26ema is not plotted on the chart because the chart becomes cluttered, plus the moving averages crossing over is indicated with the indicator.
This indicator should be used with other indicators such as ATR (1), (14), (20, 2), etc. in order to determine the best course of action when a signal is given. One way to use this as a strict system is to take a neutral cash position when a yellow "hold" signal is given, to go long when a
green "buy" signal is given, and to go short when a red "sell" signal is given. It can be observed that for many tickers and timeframes that green-yellow-green and red-yellow-red sequences are stronger signals than green-yellow-red and red-yellow-green signals.
Note: Chart type must be "bars" in order for the bar colorization to work properly
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.