Nadaraya-Watson Smoothers [LuxAlgo]The following tool smoothes the price data using various methods derived from the Nadaraya-Watson estimator, a simple Kernel regression method. This method makes use of the Gaussian kernel as a weighting function.
Users have the option to use a non-repainting as well as a repainting method, see the USAGE section for more information.
🔶 USAGE
🔹 Non Repainting
When Repainting Smoothing is disabled the returned indicator acts similarly to a regular causal moving average. This result could be described as an "endpoint Nadaraya-Watson estimator".
Unlike a regular moving average whose degree of smoothness is commonly determined by the length of its calculation window, the degree of smoothness of the proposed indicator is determined by the bandwidth setting, with a higher value returning smoother results.
In the above chart, a bandwidth value of 50 is used. An increasing value of the smoother is indicative of an uptrend, while a decreasing value is indicative of a downtrend.
🔹 Repainting
Non-causal smoothing methods have found low support from technical analysts because they tend to repaint. Yet, they can provide powerful insights such as estimating underlying trends in the price as well as seeing how far prices deviate from them. They can also make drawing certain patterns easier and can help see underlying structures in the price more clearly.
Using higher bandwidth values allows for estimating longer-term trends in the price.
Triangular labels highlight points where the direction of the estimator change. This allows for the identification of tops and bottoms in the underlying trend which can be compared to the actual price tops and bottoms.
Note that multiple labels can appear in real time, highlighting real-time changes in the estimator's direction. The most recent label on a series of labels is the first to appear. This can eventually be useful for the real-time predictive application of the estimator. However, it is not a usage we particularly recommend.
🔶 DETAILS
The Nadaraya-Watson estimator can be described as a series of weighted averages using a specific normalized kernel as a weighting function. For each point of the estimator at time t , the peak of the kernel is located at time t , as such the highest weights are attributed to values neighboring the price located at time t .
A lower bandwidth value would contribute toward a more important weighting of the price at a precise point and would as such less smooth results. In the case where our bandwidth is so small that the resulting kernel is just an impulse, we would get the raw price back.
However, when the bandwidth is sufficiently large, prices would be weighted similarly, thus resulting in a result closer to the price mean.
It can be interesting to note that due to the nature of the estimator and its weighting procedure, real-time results would not deviate drastically for points in the estimator near the center of the calculation window.
🔶 SETTINGS
Bandwidth : controls the bandwidth of the Gaussian kernel, with higher values returning smoother results.
Src : Input source of the kernel regression.
Repainting Smoothing : Determine if the smoothing method should repaint or not. If disabled the "endpoint Nadaraya-Watson estimator" is returned.
Luxalgo
MM SENSEI ICHIMOKUIt was developed in the late 1930s by Goichi Hosoda (細田悟一, Hosoda Goichi), a Japanese journalist who used to be known as Ichimoku Sanjin (一目山人, Ichimoku Sanjin), which can be translated as "what a man in the mountain sees". He spent 30 years perfecting the technique before releasing his findings to the general public in the late 1960s.
Ichimoku Kinko Hyo translates to one glance equilibrium chart or instant look at the balance chart and is sometimes referred to as "one glance cloud chart" based on the unique "clouds" that feature in Ichimoku charting.
Ichimoku is a moving average-based trend identification system and because it contains more data points than standard candlestick charts, it provides a clearer picture of potential price action. The main difference between how moving averages are plotted in Ichimoku as opposed to other methods is that Ichimoku's lines are constructed using the 50% point of the highs and lows as opposed to the candle's closing price. Ichimoku takes into consideration the factor of time as an additional element along with the price action, similar to William Delbert Gann's trading ideas.
Here is What I Added
'Select between 5 different buy conditions
.auto Atr risk management
.auto pivot levels based on timeframe
.alerts send full signals to your phone
.added trading sessions
.Mtf cloud filter at bottom of the screen
"strict" feature that only shows trades with the trend
How to use
There are many ways to use this Algo based on the different signals it provides
you use the auto pivots for swing trading
or use the cross over signals to scalp or intraday trade
the main purpose of this algo was to make sense of the Ichi Cloud and show its genius
Link below or PM us for access to this indicator Happy Trading
Pivot High/Low Analysis & Forecast [LuxAlgo]Returns pivot points high/low alongside the percentage change between one pivot and the previous one (Δ%) and the distance between the same type of pivots in bars (Δt). The trailing mean for each of these metrics is returned on a dashboard on the chart. The indicator also returns an estimate of the future time position of the pivot points.
This indicator by its very nature is not real-time and is meant for descriptive analysis alongside other components of the script. This is normal behavior for scripts detecting pivots as a part of a system and it is important you are aware the pivot labels are not designed to be traded in real-time themselves
🔶 USAGE
The indicator can provide information helping the user to infer the position of future pivot points. This information is directly used in the indicator to provide such forecasting. Note that each metric is calculated relative to the same type of pivot points.
It is also common for analysts to use pivot points for the construction of various figures, getting the percentage change and distance for each pivot point can allow them to eventually filter out points of non-interest.
🔹 Forecast
We use the trailing mean of the distance between respective pivots to estimate the time position of future pivot points, this can be useful to estimate the location of future tops/bottoms. The time position of the forecasted pivot is given by a vertical dashed line on the chart.
We can see a successful application of this method below:
Above we see the forecasted pivots for BTCUSD15. The forecast of interest being the pivot high. We highlight the forecast position with a blue dotted line for reference.
After some time we obtain a new pivot high with a new forecast. However, we can see that the time location of this new pivot high matches perfectly with the prior forecast.
The position in time for the forecast is given by:
x1_ph + E
x1_pl + E
where x1_ph denotes the position in time of the most recent pivot high. x1_pl denotes the position in time of the most recent pivot low and E the average distance between respective pivot points.
🔶 SETTINGS
Length: Window size for the detection of pivot points.
Show Forecasted Pivots: Display forecast of future pivot points.
🔹 Dashboard
Dashboard Location: Location of the dashboard on the chart
Dashboard Size: Size of the dashboard on the chart
Text/Frame Color: Determines the color of the frame grid as well as the text color
Zig Zag Channels [LuxAlgo]The Zig Zag indicator is a useful indicator when it comes to visualizing past underlying trends in the price and can make the process of using drawing tools easier. The indicator consists of a series of lines connecting points where the price deviates more than a specific percentage from a maximum/minimum point ultimately connecting local peaks and troughs.
This indicator by its very nature backpaints by default, meaning that the displayed components are offset in the past.
🔶 USAGE
The Zig Zag indicator is commonly used to returns points of references for the usage of specific drawing tools, such as Fibonacci retracements, fans, squares...etc.
The proposed indicator estimates peaks and troughs by using rolling maximums/minimums with a window size determining their significance. This window size approach allows us to have an indicator that works with a certain regularity no matter the scale of the price, something the percentage-based approach struggles with. Additionally, one upper and lower extremity are displayed, highlighting the price point that deviates the most from the Zig Zag lines.
A common usage also includes the easy determination of Elliot wave patterns in the price.
The Zig Zag indicator above highlights a downtrending motive wave.
🔹 Extremities
The novel approach taken by this Zig Zag indicator is the addition of two extremities derived from the distance between the price and the Zig Zag line, thus returning channels. It is uncommon seeing extremities in Zig Zag indicators since the line connecting peaks and troughs has rarely any other utility than seeing trend variations with more clarity and is not meant to provide an accurate estimate of underlying local trends in the price.
This channel can be useful to study the potential relationship between underlying trends and the Zig Zag line. A low width between the Zig Zag and the upper extremity indicates price variations mostly located below the Zig Zag while equal width indicates more linear trends.
When the indicator is extended to the last line, the extremities provide potential support and resistances, thus making this indicator able to forecast price variations.
🔶 SETTINGS
Length: Determines the significance of the detected peaks and troughs.
Extend To Last Bar: Extend the most recent line to the most recent closing price value.
Show Extremities: Displays the extremities.
Show Labels: Display labels highlighting the high/low prices located at peaks and troughs.
🔹 Style
Upper Extremity Color: Color of the upper extremity displayed by the indicator.
Zig Zag Color: Color of the ZigZag lines.
Lower Extremity Color: Color of the lower extremity displayed by the indicator.
Normalized Oscillators Spider Chart [LuxAlgo]This indicator displays a spider chart overlaid on the user’s current chart allowing the visualization of information given by various normalized oscillators. It is possible to customize the spider chart by hiding certain oscillators from within the settings which removes their corresponding spokes from the chart.
Users can control the length settings of each oscillator individually or use a global length setting that applies to every oscillator. An additional meter element is displayed and aims to give the overall sentiment returned by the oscillators. This can also be used to gauge whether the market is trending or ranging.
This is a relatively simple application of a spider chart but can prove to be useful to some users.
1. Settings
RSI: Displays the Relative Strength Index spoke on the spider chart, includes the length setting on the right of the toggle.
%K: Displays the Stochastic Oscillator "%K" spoke on the spider chart, includes the length setting on the right of the toggle.
COR: Displays the Correlation Oscillator spoke on the spider chart, includes the length setting on the right of the toggle.
MFI: Displays the Money Flow Index oscillator spoke on the spider chart, includes the length setting on the right of the toggle.
WPR: Displays the Williams Percent Rank oscillator spoke on the spider chart, includes the length setting on the right of the toggle.
%UP: Displays the percentage of upward variations spoke on the spider chart, includes the length setting on the right of the toggle.
CMO: Displays the Chande Momentum Oscillator spoke on the spider chart, includes the length setting on the right of the toggle.
AOS: Displays the Aroon oscillator spoke on the spider chart, includes the length setting on the right of the toggle.
Global Oscillators Length: Determines whether all oscillators should use the same length settings, determined by the setting on the right of the toggle.
1.1 Style Settings
Spider Chart Length: Determines the horizontal width of the spider chart.
Spider Chart Offset: Offset between the most recent bar and the left extremity of the spider chart.
2. Usage
A spider chart can be a very useful visualization tool when it comes to seeing the individual characteristics of various variables at the same time.
Here, the tool can give a general sentiment on the direction of the trend without adding each indicator to your chart. It is also possible to determine when an oscillator is considered overbought or oversold with this indicator.
The dashed line represents the central value for each oscillator.
Disabling any of the oscillators from the settings will return a spider chart using fewer spokes.
The script also displays a meter that can be used to determine the overall sentiment given by all oscillators. This metric is based on the average value between each oscillator. An overall sentiment closer to 50 would indicate a ranging market.
PineGIF - Display Gifs & Images In Tradingview [LuxAlgo]Pinescript is not designed to create or display images, let alone gifs, but it's very fun to try, and that's what this script does. This script allows the user to display three different gifs. In this post, we explain how we managed to display images/gif's using pinescript tables.
1. Image Pre-Processing
Due to pinescript limitations, we can't possibly display images with an excessively high resolution. As such we targeted pixel art as a primary image source. We used a pixel art gif of the magnificent Octocat (the mascot for the source-code hosting service GitHub) for our first try.
We first extract each frame from the gif and resize them to a 50x50 resolution which returns frames made of 2500 pixels. This process was done using python.
Getting Individual Pixels RGBA Values
Python can easily return a matrix containing each pixel's rgba value. For convenience, we converted the rgba values to hex.
We then create a simple code allowing us to return a pinescript array containing the 2500 pixel hex colors. We do this process for each frame.
2. Defining Table Cell Color
In the code, each frame is its own array. We create a new table with dimensions equal to len(frame1)^2 (we assume height = width).
The color of a cell is defined by the color of the image pixel at the same exact location. When a new bar is created, we do this exact process using a different frame which ultimately allows a new frame to be displayed.
3. Playing The GIFs
By default, the script will play the gif of the Tradingview cloud logo raining. In order to play the gif, simply use the replay mode. The replay speed allows the user to determine the frame rate (0.1 for the raining cloud and Nyan cat works best, 0.5 for Octocat).
We included the frames of the Octocat and Nyan cat gifs in the script.
4. Some Other Cool Images
Displaying static images is possible and involves the same process described above.
An original idea of the lizard, implemented by the wizard.
Directional Matrix [LuxAlgo]Returns a dashboard showing the direction taken by 4 overlay indicators, SMA (simple moving average), TMA (triangular moving average), WMA (weighted moving average), and REG (linear regression), all using different length periods.
The user can select the minimum and maximum length of these indicators and introduce an increment.
1. Settings
Maximum Length: The end value of sequences of the indicator periods to analyze
Minimum Length: The starting value of sequences of the indicator periods to analyze
Step: Determines the spacing between each indicator periods values
Src: Data source for each of the 4 indicators
1.1 Style settings
Normalized Change Mode: Allows the user to access a different interpretation of the indicator by showing the normalized first differences of each indicator in the dashboard instead of their sign
Dashboard Location: Location of the dashboard on the chart
Dashboard Size: Size of the dashboard on the chart
Text/Frame Color: Determines the color of the frame grid as well as the text color
Bullish Cell Color: Determines the color of cell associated with a rising indicator direction
Bearish Cell Color: Determines the color of cell associated with a decreasing indicator direction
Cell Transparency: Transparency of each cell
2. Usage
Each of the indicators included in the dashboard aim to give an estimate of the underlying trend in the price. Knowing which direction they are taking can help us have a broader view regarding the direction of shorter/longer-term trends. We will later see that this is not the only kind of information that we can get from this indicator.
Rising indicators are represented by blue cells (or the color selected in the Bullish Cell Color setting) while decreasing indicators are represented by red cells (or the color selected in the Bearish Cell Color setting).
The percentage of bullish cells is given in the top-left cell of the dashboard.
2.1 Normalized change mode
Enabling the Normalized Change mode will display the normalized changes returned by the indicators over different length periods. This metric is within a range (0,1), with 1 indicating the highest change over the selected length periods, while 0 indicates the lowest one.
When enabling this mode the color of the cells makes use of a gradient with a color palette ranging from the color selected in the Bearish Cell setting to the color selected in the Bullish Cell setting.
2.1 Other Usage
The direction taken by certain indicators can give more information than one would think. Indeed, the sign of the change of one indicator can often be given by different indicators.
A positive change in a simple moving average indicates that the price is greater than the price p bars ago, where p is the period of the simple moving average.
A positive change in a triangular moving average indicates that a simple moving average of period p is above a simple moving average of period p × 2 , where p is the period of the triangular moving average (note that we assume here that the TMA is given by cascading two SMAs of period p ).
A positive change in a weighted moving average indicates that the price is above a simple moving average of period p+1 , where p is the period of the WMA.
Finally, a positive change in a linear regression indicates that a weighted moving average is above a simple moving average of period p , where p is the period of the linear regression.
SuperTrend Oscillator [LuxAlgo]This oscillator is made of three components, all derived from the SuperTrend indicator. This approach allows the user to easily determine overbought/sold zones, identify whether a retracement is present or if the price is ranging or trending. It also allows for the anticipation of the potential price cross with the SuperTrend.
We provide additional information including whether a signal returned by the SuperTrend was false, as well as the percentage of false signals.
Settings
Length: Period of the "average true range" used in the calculation of the SuperTrend
Mult: Multiplicative factor for the "average true range"
Smooth: Determines the degree of smoothing of the histogram
Misc:
Fixed Transparency: Use a fixed transparency for the main oscillator
Show Lines: Show the lines displayed by the indicator
Show Labels: Show the labels displayed by the indicator
Usage
The indicator is in a range of (-100,100) with values closer to 100/-100 indicating a stronger trend. The main oscillator value above 0 indicates that the price is above the SuperTrend.
It is possible to identify when a retracement is present in a trend. This is often indicated by an oscillator value moving within 50/-50.
Each overbought/oversold level can be used to determine potential exit points.
The indicator also includes two additional oscillators derived from the main oscillator. A smoothed version of the main oscillator (Signal), and a smoothed version of the difference between the Main and Signal oscillators (Histogram), thus making the oscillator part of the indicator more similar to MACD.
One can use the histogram to anticipate when the price might cross the SuperTrend by comparing the sign between the main and histogram. Potential false signals can also be filtered with this method.
Certain crosses between the price and SuperTrend can be filtered out when the histogram and main oscillator have a different sign (here main = 1, histogram = -1).
We include various indications in order to analyze the signals returned by the SuperTrend. The indicator displays symbols indicating whether a signal was false or not.
A cross symbol will be displayed at the top of the displayed lines when the previous Buy signal was false, else a checkmark is displayed. Symbols displayed at the bottom of the lines are referring to sell signals. We also provide a percentage of false signals, calculated over the entire chart history.
Details
The scaling method used is similar to max-min normalization. We first compute the difference between the price and SuperTrend and divide the result by the difference between the upper and lower extremity used to compute the SuperTrend. Values higher than (1,-1) can occur when price crosses the SuperTrend and as such we use the max and min functions to attenuate these.
The filter used to compute the signal line is based on exponential averaging and is fully adaptive. The smoothing factor used for its computation is the squared value of the main oscillator, divided by length . Since higher values of the oscillator are associated with trending markets, the filter will be closer to the main oscillator when the market is ranging.
Adjustable MA & Alternating Extremities [LuxAlgo]Returns a moving average allowing the user to control the amount of lag as well as the amplitude of its overshoots thanks to a parametric kernel. The indicator displays alternating extremities and aims to provide potential points where price might reverse.
Due to user requests, we added the option to display the moving average as candles instead of a solid line.
Settings
Length: MA period, refers to the number of most recent data points to use for its calculation.
Mult: Multiplicative factor for each extremity.
As Smoothed Candles: Allows the user to show the MA as a series of candles instead of a solid line.
Show Alternating Extremities : Determines whether to display the alternating extremities or not.
Lag: Controls the amount of lag of the MA, with higher values returning a MA with more lag.
Overshoot: Controls the amplitude of the overshoots returned by the MA, with higher values increasing the amplitude of the overshoots.
Usage
Moving averages using parametric kernels allows users to have more control over characteristics such as lag or smoothness; this can greatly benefit the analyst. A moving average with reduced lag can be used as a leading moving average in a MA crossover system, while lag will benefit moving averages used as slow MA in a crossover system.
Increasing 'Lag' will increase smoothness while increasing 'overshoot' will reduce lag.
The following indicator puts more emphasis on its alternating extremities, an upper extremity will be shown once the high price crosses the upper extremity, while a low extremity will be shown once the low price crosses the lower extremity. These can be interpreted like extremities of a band indicator.
The MA using a length value of 200 with a multiplicative factor of 1.
In general, extremities will effectively return points where price might potentially bounce in ranging markets while closing prices under trending markets will often be found above an upper extremity and under a lower extremity.
Reducing the lag of the moving average allows the user to obtain a more timely estimate of the underlying trend in the price, with a better fit overall. This allows the user to obtain potentially pertinent extremities where price might reverse upon a break, even under trending markets.
In the above chart, the price initially breaks the upper extremity, however, we can observe that the upper extremity eventually reaches back the price, goes above it, provides a resistance, and effectively indicates a reversal.
Users can plot candles from the moving average, these are fairly similar to heikin-ashi candles in the sense that CandleOpen(t) ≠ CandleClose(t-1) , each point of the candle is calculated as follows for our indicator:
Open = Average between MA(t-1) and MA(t-2)
High = MA using the high price as input
Low = MA using the low price as input
Close = MA using the closing price as input
Details
Lag is defined as the effect of moving averages to reflect past price variations instead of new ones, lag can be observed by the user and is the main cause of false signals. Lag is proportional to the degree of filtering returned by the moving average.
Overshooting is a common effect encountered in non-lagging moving averages, and is defined as the tendency of a moving average to exceed a maximum level (or minimum level, which can be defined as undershooting )
MA and rolling maximum/minimum, both using a length of 50 bars. While we can think of lag as a cost of smoothness, we can think of overshooting as a cost for reduced lag on some occasions.
Explaining the kernel design behind our moving average requires understanding of the logic behind lag reduction in moving averages. This can prove to be complex for non informed users, but let's just focus on the simpler part; moving averages can be defined as a weighted sum between past prices and a set of coefficients (kernel).
MA(t) = b(0)C(t) + b(1)C(t-1) + b(2)C(t-2) + ... + b(n-1)C(t-n-1)
Where n is the period of the moving average. Lag is (non optimally) reduced by "underweighting" past prices - that is multiplying them by negative numbers.
The kernel used in our moving average is based on a modified sinewave. A weighted sum making use of a sinewave as a kernel would return an oscillator centered at 0. We can divide this sinewave by an increasing linear function in order to obtain a kernel allowing us to obtain a low lag moving average instead of a centered oscillator. This is the main idea in the design of the kernel used by our moving average.
The kernel equation of our moving average is:
sin(2πx^α)(1 - x^β)
With 1>x>0 , and where α controls the lag, while β controls the overshoot amplitude.
Using this equation we can obtain the following kernels:
Here only α is changed, while β is equal to 1. Values to the left would represent the coefficients for the most recent prices. Notice how the most significant coefficients are given to the oldest prices in the case where α increases.
Higher overshoot would require more negative values, this is controlled by β
Here only β is changed, while α is equal to 1. Notice how higher values return lower negative coefficients. This effectively increases the overshoots amplitude in our moving average. We can decrease α in order for these negative coefficients to underweight more recent values.
Using α = 0 allows us to simplify the kernel equation to:
1 - x^β
Using this kernel we can obtain more classical moving averages, this can be seen from the following results:
Using β = 1 allows us to obtain a linearly decreasing kernel (the one of a WMA), while increasing allows the kernel to converge toward a rectangular kernel (the one of SMA).
Volume Profile [LuxAlgo]Displays the estimate of a volume profile, with the option to show a rolling POC (point of control). Users can change the lookback, row size, and various visual aspects of the volume profile.
Settings
Basic:
Lookback: Number of most recent bars to use for the calculation of the volume profile
Row Size: Determines the number of rows used for the calculation of the volume profile
Show Rolling POC: Determines whether to display the rolling POC of the volume profile
Style:
Width (% of the box): Determines the length of the bars relative to the Lookback value
Bar Width: Width of each bar
Flip Histogram: Flips the histogram, when enabled, the histogram base will be located at the most recent candle
Gradient: Allows to color the volume profile bars with a gradient, with a color intensity determined by the length of each bar
Rows Solid Color: Color of each bar when 'Gradient' is disabled
POC Solid Color: Color of the POC when 'Gradient' is disabled
Usage
It is very common to display volume over time in order to visualize the trading activity made over a specific candle, however this is not the only way to display volume and it can be interesting to put it in relation with the price, which is what volume profiles do.
Volume profiles are displayed as price relative histograms showing the accumulated volume within certain price areas, the number of areas are determined by the row size of the volume profile. Knowing which price's area accumulated the most volume allow highlighting areas of interest to market participants.
Most accumulated volume will be encountered in zones of equilibrium between buyers and sellers; that is zones of local price stationarity. These zones are highlighted by high volume nodes in the volume profile. Imbalance between buyers and sellers are highlighted by thinner zones of the volume profile.
The price level with the most accumulated volume is highlighted by the "point of control" (POC), displayed by the dotted line in the indicator.
The POC is often considered an important level, commonly used as support/resistance by traders. One can verify the accuracy of this use case by using the rolling POC (assuming one would use the POC over time as SR).
Indicator Limitations
Volume profiles are calculated using tick data, which is not the case of this estimate, as such you won't have an accurate representation of an actual volume profile.
The rolling POC can introduce time outs in the script computation, use lower lookback and row size value to display it.
Parallel Pivot Lines [LuxAlgo]Displays lines connecting past pivot high/low points with each line having the slope of a linear regression. This slope can also be controlled by the user with the 'Slope' setting. Each line can be used as a support or resistance by the user.
Settings
Length : Pivot length. Use higher values for having lines connected to more significant pivots points.
Lookback : Number of lines connecting a pivot high/low to display, with a total of lines equal to Lookback*2
Slope : Allows the user to multiply the linear regression slope by a number within -1 and 1
Limitations
The script has currently several real time behavior limitations. Lines are displayed retrospectively and will not update with the arrival of new bars. Readjusting the indicator to newer pivots will require the user to either hide/unhide the indicator or change its settings.
High Length or Lookback values might not return any lines if the location of a pivot point is outside the defined buffer size of the indicator (set as 5000 bars).
How To Use
The indicator can be used to get supports and resistances and is more so closer to a drawing tool due to its limitations. The lines not updating with the arrival of new bars have the advantage of providing fixed supports/resistances.
The Slope setting allows the user to control the angle and direction of the lines. Using a Slope of 1 will return lines with the same slope as the one of a linear regression fit from the farthest pivot point displayed by the indicator to the most recent bar.
The chart above shows the indicators and a linear regression in orange.
If you want to have horizontal lines, use a Slope equal to 0.
Finally using a negative slope value will allow the user to have lines in opposite directions to the main trend.
Conclusion
We hope you like this indicator (drawing tool) and find it useful for drawing your support & resistances in a unique way!
Donchian Zig-Zag [LuxAlgo]The following indicator returns a line bouncing of the extremities of a Donchian channel, with the aim of replicating a "zig-zag" indicator. The indicator can both be lagging or lagging depending on the settings user uses.
Various extended lines are displayed in order to see if the peaks and troughs made by the Donchian zig-zag can act as potential support/resistance lines.
User Settings
Length : Period of the Donchian channel indicator, higher values will return fewer changes of directions from the zig-zag line
Bounce Speed : Determine the speed of bounces made by the zig-zag line, with higher values making the zig-zag line converge faster toward the extremities of the Donchian channel.
Gradient : Determine whether to use a gradient to color the area between each Donchian channel extremities, "On" by default.
Transparency : Transparency of the area between each Donchian channel extremities.
Usage
It is clear that this is not a very common indicator to see, as such usages can be limited and very hypothetical. Nonetheless, when a bounce speed value of 1 is used, the zig-zag line will have the tendency to lag behind the price, and as such can provides crosses with the prices which can provide potential entries.
The advantage of this approach against most indicators relying on crosses with the price is that the linear nature of the indicator allows avoiding retracements, thus potentially holding a position for the entirety of the trend.
Altho this indicator would not necessarily be the most adapted to this kind of usage.
When using a bounce speed superior to 1, we can see the predictive aspects of the indicator:
We can link the peaks/troughs made by the zig-zag with the precedent ones made to get potential support and resistance lines, while such a method is not necessarily accurate it still allows for an additional to interpret the indicator.
Conclusions
We presented an indicator aiming to replicate the behaviour of a zig-zag indicator. While somehow experimental, it has the benefits of being innovative and might inspire users in one way or another.
Rainbow Adaptive RSI [LuxAlgo]The following oscillator uses an adaptive moving average as an input for another RSI oscillator and aims to provide a way to minimize the impact of retracements over the oscillator output without introducing significant lag.
An additional trigger line is present in order to provide entry points from the crosses between the oscillator and the trigger line. More details are given below.
Settings
Length : period of the oscillator
Power : controls the sensitivity of the oscillator to retracements, with higher values minimizing the sensitivity to retracements.
Src : source input of the indicator
The indicator also includes the following graphical settings:
Gradient : Determines the color mode to use for the gradient, options include "Red To Green", "Red To Blue" and "None", with "None" displaying no gradient.
Color fill : Determines whether to fill the area between the oscillator and the trigger line or not, by default "On".
Circles : Determines whether to show circles highlighting the crosses between the oscillator and the trigger line.
Usage
The indicator can be used like any normalized oscillator, but unlike a classical RSI, it does not converge toward 50 with higher length values. This is caused by the RSI using a smooth input.
The power setting will minimize the impact of certain variations on the oscillator:
Here the oscillator at the bottom uses a power value of 1.5.
The trigger line is a smoothed RSI using an EMA as input, and it won't remain as near to 100 and 0 as the main oscillator. Using a moving average of the main oscillator as a trigger line would create faster crosses, but this approach allows us to have no crosses when a retracement is present.
Details
As previously discussed the main oscillator uses an adaptive moving average as input; this adaptive moving average is computed using a smoothing factor derived from an RSI oscillator, a similar adaptive moving average known as ARSI, but unlike ARSI which uses a classical RSI of the closing price for the calculation of the smoothing factor, our smoothing factor makes use of RSI on the adaptive moving average error, which provides a higher level of adaptiveness.
Trend Regularity Adaptive Moving Average [LuxAlgo]The following moving average adapt to the average number of highest high/lowest low made over a specific period, thus adapting to trend strength. Interesting results can be obtained when using the moving average in a MA crossover system or as a trailing support/resistance.
Settings
Length : Period of the indicator, with higher values returning smoother results.
Src : Source input of the indicator.
Usage
The trend regularity adaptive moving average (TRAMA) can be used like most moving averages, with the advantage of being smoother during ranging markets.
Notice how the moving closer to the price the longer a trend last, such effect can be practical to have early entry points when using the moving average in a MA crossover system, such effect is due to the increasing number of average highest high/lowest low made during longer trends. Note that in the case of a significant uptrend followed by a downtrend, the moving average might penalize the start of the downtrend (and vice versa).
The moving average can also act as an interesting trailing support/resistance.
Details
The moving average is calculated using exponential averaging, using as smoothing factor the squared simple moving average of the number of highest high/lowest low previously made, highest high/lowest low are calculated using rolling maximums/minimums.
Using higher values of length will return fewer highest high/lowest low which explains why the moving average is smoother for higher length values. Squaring allows the moving average to penalize lower values, thus appearing more stationary during ranging markets, it also allows to have some consistency regarding the length setting.
🧙 this moving average would not be possible without the existence of corn syrup 🦎
Trend Volume Accumulations [LuxAlgo]Deeply inspired by the Weiss wave indicator, the following indicator aims to return the accumulations of rising and declining volume of a specific trend. Positive waves are constructed using rising volume while negative waves are using declining volume.
The trend is determined by the sign of the rise of a rolling linear regression.
Settings
Length : Period of the indicator.
Src : Source of the indicator.
Linearity : Allows the output of the indicator to look more linear.
Mult : the multiplicative factor of both the upper and lower levels
Gradient : Use a gradient as color for the waves, true by default.
Usages
The trend volume accumulations (TVA) indicator allows determining the current price trend while taking into account volume, with blue colors representing an uptrend and red colors representing a downtrend.
The first motivation behind this indicator was to see if movements mostly made of declining volume were different from ones made of rising volume.
Waves of low amplitude represent movements with low trading activity.
Using higher values of Linearity allows giving less importance to individual volumes values, thus returning more linear waves as a result.
The indicator includes two levels, the upper one is derived from the cumulative mean of the waves based on rising volume, while the lower one is based on the cumulative mean of the waves based on declining volume, when a wave reaches a level we can expect the current trend to reverse. You can use different values of mult to control the distance from 0 of each level.
Triangular Momentum Oscillator & Real Time Divergences [LuxAlgo]Oscillators are widely used in technical analysis and can return a large amount of information to the trader depending on their design. It is common to use oscillators to detect divergences with the price, divergences occur when the tops/bottoms made by the oscillator and price are negatively correlated.
The following oscillator is based on the momentum of a triangular moving average, hence the name "triangular momentum" because of the very smooth property of the triangular moving average, we aimed at a real-time detection of divergences instead of using more common methods such as relying on pivot high/low detection which are suitable for more noisy oscillators.
The oscillator can also be colored based on a gradient derived from the correlation between its output and the price which can be useful to detect when the oscillator is out of phase (significantly lagging or leading the price).
Settings
length : Period of the oscillator, higher values return a smoother output.
src : Input source of the indicator.
Show Lines : Show lines connecting the current top/bottom with the previous one made by the oscillator when a divergence is detected. True by default.
Color Based On Price/Oscillator Correlation : Allows the color of the oscillator to change based on its correlation with the price, with red colors suggesting a negative correlation.
Usages
The advantage of having a smoother oscillator for divergences detection is that it can be done in real-time since a top or bottom is present when the oscillator first difference cross 0. Smoother oscillators are also easier to interpret, however, they will still suffer from lag.
The divergences detected by the oscillator are regular divergences, where the oscillator leads price variations.
Using higher values of length allows the oscillator to filter out longer-term variations thus being smoother as a result.
By using the color mode based on the price/oscillator correlation we can see where the oscillator leads or lag the price, and since divergences are based on the price and oscillator going in the opposite direction we can have information where price might reverse.
It is also possible to interpret the oscillator without relying on the divergence detection, with a decreasing value of the oscillator indicating a downtrend and an increasing value indicating an uptrend.
LuxAlgo® - Price Action Concepts™Price Action Concepts™ is a first of it's kind all-in-one indicator toolkit which includes various features specifically based on pure price action.
Order Blocks w/ volume data, real-time market structure (BOS, CHoCH, EQH/L) w/ 'CHoCH+' being a more confirmed reversal signal, a MTF dashboard, Trend Line Liquidity Zones (real-time), Chart Pattern Liquidity Zones, Liquidity Grabs, and much more detailed customization to get an edge trading price action automatically.
Many traders argue that trading price action is better than using technical indicators due to lag, complexity, and noisy charts. Popular ideas within the trading space that cater towards price action trading include "trading like the banks" or "Smart Money Concepts trading" (SMC), most prominently known within the forex community.
What differentiates price action trading from others forms of technical analysis is that it's main focus is on raw price data opposed to creating values or plots derived from price history.
Mostly all of the features within this script are generated purely from price action, more specifically; swing highs, swing lows, and market structure... which allows users to automate their analysis of price action for any market / timeframe.
🔶 FEATURES
This script includes many features based on Price Action; these are highlighted below:
Market structure (BOS, CHoCH, CHoCH+, EQH/L) (Internal & Swing) multi-timeframe
Volumetric Order Blocks & mitigation methods (bullish & bearish)
Liquidity Concepts
Trend Line Liquidity Zones
Chart Pattern Liquidity
Liquidity Grabs Feature
Imbalance Concepts MTF w/ multiple mitigation methods
Fair Value Gaps
Balanced Price Range
Activity Asymmetry
Strong/Weak Highs & Lows w/ volume percentages
Premium & Discount Zones included
Candle Coloring based on market structure
Previous Highs/Lows (Daily, Monday's, Weekly, Monthly, Quarterly)
Multi-Timeframe Dashboard (15m, 1h, 4h, 1d)
Built-in alert conditions & Any Alert() Function Call Conditions
Advanced Alerts Creator to create step-by-step alerts with various conditions
+ more (see changelog below for current features)
🔶 BASIC DEMONSTRATION
In the image above we can see a demonstration of the market structure labeling within this indicator. The automatic BOS & CHoCH labels on top of dashed lines give clear indications of breakouts & reversals within the internal market structure (short term price action). The "CHoCH+" label is also demonstrated as it triggers only if price has already made a new higher low, or lower high.
We can also see a solid line with a larger BOS label in the middle of the chart. This label demonstrates a break of structure taking into account the swing market structure (longer term price action). All of these labels are generated in real-time.
🔶 USAGE & EXAMPLES
In the image below we can see how a trade setup could be created using Order Blocks w/ volume metrics to find points of interest in the market, swing / internal market structure to get indications of longer & shorter term reversals, and trend line liquidity zones to find more likely impulses & breakouts within trends.
We can see in the next image below that price came down to the highest volume order block marked out previously as our point of interest for an entry used in confluence with the overall market structure being bullish (swing CHoCH). Due to price closing below the middle Order Block at (24.77%), we saw it was mitigated, and then price revisited liquidity above the Trend Line zone above, leading us to the first Order Block as a target.
You will notice the % values adjust as Order Blocks are touched & mitigated, aligning with the correct volume detected when the Order Block was established.
In the image below we can see more features from within Price Action Concepts™ indicator, including Chart Pattern Liquidity, Fair Value Gaps (one of many Imbalance Concepts), Liquidity Grabs, as well as the primary market structures & OBs.
By using multiple features as such, users can develop a greater interpretation of where liquidity rests in the market, which allows them to develop trading plans a lot easier. Liquidity Grabs are highlighted as blue/red boxes on the wicks during specific price action that indicates the market has made an impulse specifically to take out resting buy or sell side orders.
We can notice in the trade demonstrated below (hindsight example) how price often moves to the areas of the most liquidity, even if unexpected according to classical technical analysis performed by retail traders such as chart patterns. Wicks to take out orders above & potentially trap traders are much more noticeable with features such as these.
The Chart Patterns which can be detected include:
Ascending/Descending Wedges (Asc/Desc Wedge)
Ascending/Descending Broadening Wedges (Asc/Desc BW)
Ascending/Descending/Symmetrical Triangles (Asc/Desc/Sym Triangle)
Double Tops/Bottoms (Double Top/Double BTM)
Head & Shoulders (H&S)
Inverted Head & Shoulders (IH&S)
General support & resistance during undetected patterns
In the image below we can see more features from within the indicator, including Balanced Price Range (another imbalance method similar to FVG), Market Structure Candle Coloring, Accumulation & Distribution zones, Premium & Discount zones w/ a percentage on each zone, the MTF dashboard, as well as the Previous Daily Highs & Lows (one of many highs/lows) displayed on the chart automatically.
The colored candles use more specific market structure analysis, specifically allowing users to visualize when trends are considered "normal" or "strong". By utilizing other features alongside this market structure analysis, such as noticing price retesting the PDL level + the Equilibrium as resistance, a Balanced Price Range below price, the discount with a high 72% metric, and the MTF dashboard displaying an overall bearish structure...
...users can instantly gain a deeper interpretation of price action, make highly confluent trading plans while avoiding classical technical indicators, and use traditional retail trading concepts such as chart patterns / trend lines to their advantage in finding logical areas of liquidity & points of interest in the market.
The image below shows the previous chart zoomed in with 2 liquidity concepts re-enabled & used alongside a new range targeting the same Discount zone.
🔶 SETTINGS
Market Structure Internal: Allows the user to select which internal structures to display (BOS, CHoCH, or None).
Market Structure Swing: Allows the user to select which swing structures to display (BOS, CHoCH, or None).
MTF Scanner: See market structure on various timeframes & how many labels are active consecutively.
Equal Highs & Lows: Displays EQH / EQL labels on chart for detecting equal highs & lows.
Color Candles: Plots candles based on the internal & swing structures from within the indicator on the chart.
Order Blocks Internal: Enables Internal Order Blocks & allows the user to select how many most recent Internal Order Blocks appear on the chart as well as select a color.
Order Blocks Swing: Enables Swing Order Blocks & allows the user to select how many most recent Swing Order Blocks appear on the chart as well as select a color.
Mitigation Method: Allows the user to select how the script mitigates an Order Block (close, wick, or average).
Internal Buy/Sell Activity: Allows the user to display buy/sell activity within Order Blocks & decide their color.
Show Metrics: Allows the user to display volume % metrics within the Order Blocks.
Trend Line Liquidity Zones: Allows the user to display Trend Line Zones on the chart, select the number of Trend Lines visible, & their colors.
Chart Pattern Liquidity: Allows the user to display Chart Patterns on the chart, select the significance of the pattern detection, & their colors.
Liquidity Grabs: Allows the user to display Liquidity Grabs on the chart.
Imbalance Concepts: Allows the user to select the type of imbalances to display on the chart as well as the styling, mitigation method, & timeframe.
Auto FVG Threshold: Filter out non-significant fair value gaps.
Premium/ Discount Zones: Allows the user to display Premium, Discount , and Equilibrium zones on the chart
Accumulation / Distribution: Allows the user to display accumulation & distribution consolidation zones with an optional Consolidation Zig-Zag setting included.
Highs/Lows MTF: Displays previous highs & lows as levels on the chart for the previous Day, Monday, Week, Month, or quarter (3M).
General Styling: Provides styling options for market structure labels, market structure theme, and dashboard customization.
Any Alert() Function Call Conditions: Allows the user to select multiple conditions to use within 1 alert.
🔶 CONCLUSION
Price action trading is a widely respected method for its simplicity & realistic approach to understanding the market itself. Price Action Concepts™ is an extremely comprehensive product that opens the possibilities for any trader to automatically display useful metrics for trading price action with enhanced details in each. While this script is useful, it's critical to understand that past performance is not necessarily indicative of future results and there are many more factors that go into being a profitable trader.
🔶 HOW TO GET ACCESS
You can see the Author's instructions below to get instant access to this indicator & our premium suite.
ArcTan Oscillator [LuxAlgo]The following indicator is a normalized oscillator making use of the arc tangent sigmoid function (ArcTan), this allows to "squarify" the output result, thus visually filtering out certain variations originally in the oscillator. The magnitude of this effect can be controlled by the user. The indicator contains a gradient that shows the possibility of a reversal, with red colors indicating that a reversal might occur.
Settings
Length : Period of the oscillator
Pre-Gain : Changes the amplitude of the oscillator before passing through the ArcTan function, this allows to amplify/reduce the "squarification" effect introduced by this function. In order to make it easier for the user, the setting is in a (-10,10) range, with negative values reducing the amplitude and positive one increasing it.
Src : Source input of the indicator
Usage
The oscillator can be used to determine the direction of the trend by looking at its sign, if the oscillator is positive, market is up-trending, else down-trending, based on this usage the user might not be interested to look at every variations produced by the oscillator, this is where the hyperbolic tangent function and pre-gain setting can be useful, by using an high value of pre-gain the user will be able to only focus on the sign of the oscillator.
Here pre-gain is set to 5, we can see that the oscillator is now easier to visualize. However, the use of sigmoid functions remove useful information for a trader that needs to find divergences, this is where using a negative value of the pre-gain setting will result useful.
Here pre-gain is set to -5.
The indicator makes use of a gradient to show potential reversals, this gradient is determined by the correlation between the oscillator and the price (this is a way to measure potential divergences). If the color is closer to red it means that a potential reversal might occur, it is possible to say in which direction price might go by looking at the sign of the oscillator, so if the gradient is red and the oscillator is negative price might rise. The gradient is not affected by the pre-gain setting.
Support and Resistance Levels with Breaks [LuxAlgo]This script provides basic pivot point Support and Resistance Levels to the user whilst displaying Break signal tags. It also has the ability to let the user display more significant breaks by filtering using the Volume Oscillator.
Only more significant breaks of these basic levels are displayed to the user when optimized which avoids noise and messy signals.
It will also display breaks with candles it deems to be bullish (e.g. having a longer upper or lower wick).
Notation
The notation of "B" denotes a break of either a Support or Resistance level with a volume greater than the threshold.
The notation of "Bull or Bear Wick" denotes a bullish or bearish candle on the break.
Settings:
Left Bars - the number of bars left hand side of the pivot.
Right Bars - the number of bars right hand side of the pivot.
Volume Threshold - the threshold value (%) for the Volume Oscillator.
Usage & Details:
Knowing when a pivot S/R level is broken with significance can be of great help to a trader. Many times significant levels may not be broken with significant force and the move is therefore weaker and possibly not worth trading.
Swing Highs/Lows & Candle Patterns [LuxAlgo]This script labels swing highs and swing lows as well as the candle pattern that occurred at that precise point. The script can detect the following 6 candle patterns: hammer, inverse hammer, bullish engulfing, hanging man, shooting star, and bearish engulfing.
This indicator by its very nature backpaints by default, meaning that the displayed components are offset in the past.
🔶 USAGE
It can be interesting to see if a top or bottom is associated with a specific candle pattern, this allows us to study the potential of such a pattern to indicate a reversal. You can hover on a label with a specific pattern to see more details about it.
The notations HH, HL, LH, and LL you can see on the labels are defined as follows:
HH : Higher high
HL : Higher low
LH : Lower high
LL : Lower low
🔶 SETTING
Length: Sensitivity of the swing high/low detection, with lower values returning the maximum/minimum of shorter-term price variations.
Percentile Nearest Rank Using Arrays [LuxAlgo]The new array feature is extremely powerful, as it will allow pinescript users to do more complex things, or compute existing calculations more efficiently, it will also be possible to shine some light to some already existing functions, one of them being percentile_nearest_rank .
We have been working on this new feature with our pal alexgrover, and made this script which computes a rolling percentile using the nearest rank method.
Settings
Length: Window of the rolling percentile, determine the number of past data to be used.
Percentage: Return the current value if Percentage % of the data fall below that value, the setting is in a range (0,100).
Src: Input source of the indicator.
Usage
A rolling percentile can have many usages when it comes to technical analysis, this is due to its ability to return the value of three common rolling statistics, the rolling median, which can be obtained using a percentage equal to 50, the rolling maximum, obtained with a percentage equal to 100, and the rolling minimum, obtained with a percentage equal to 0.
When we use our rolling percentile as a rolling median, we can obtain a robust estimation of the underlying trend in the price, while using it as a rolling maximum/minimum can allow us to determine if the market is trending, and at which direction. The rolling maximum/minimum is a rolling statistic used to calculate the well known stochastic oscillator and Donchian channel indicator.
We can also compute rolling quartiles, which can be obtained using a percentage of 25 or 75, with one of 25 returning the lower quartile and 75 the upper quartile.
In blue the upper rolling quartile (%75), in orange the lower rolling quartile (%25), both using a window size of 100.
Details
In order to compute a rolling percentile nearest rank, we must first take the most recent length closing prices, then order them in ascending order, we then return the value of the ordered observations at index (percentage/100*length) - 1 (we use - 1 because our array index starts at 0).
LuxAlgo® - Oscillator Matrix™Oscillator Matrix™ is an all-in-one indicator that incorporates 6+ unique components designed for interoperability & confluence with one another to provide a powerful trend following & reversal detection experience.
Users can create various ways to utilize the indicator's features together such as looking for excess money flowing into the market alongside strong reversal signals appearing or getting real-time divergence signals alongside a lack of money flowing into the market to predict upcoming trends.
This indicator is described as an 'Oscillator Matrix' as it's made up of many different components that can create a systematic approach to analyzing markets alone, however, the indicator also can serve as a great secondary piece to a user's primary analysis with or without our other LuxAlgo Premium indicators.
🔶 FEATURES
Below we describe each component of Oscillator Matrix™ in order of each's significance for the most confluent analysis possible.
Money Flow - Easily see the amount of buying or selling liquidity entering the market by analyzing the green & red waves and how they react with their thresholds to achieve further insight. Best to analyze first before considering any signals the indicator can generate.
Thresholds - Dynamic levels that align above/below the Money Flow to show at which level significant buying or selling is actually taking place.
Overflow - Small lighter waves that occur within the Money Flow's display when excess buying or selling activity is occurring to accurately predict upcoming reversals.
Hyper Wave - An oscillator ribbon in green/grey that provides highly reactive trend following signals & powerful divergence detection.
Real-Time Divergences - Real-time divergence labels that appear on the Hyper Wave oscillator's adaptive ribbon. A highly effective approach to a concept that's not typically done for oscillators. Users can also increase the sensitivity of divergences within the settings.
Reversal Signals - Small dots on the upper or lower boundaries represent high frequency points that indicate possible reversals or a warning signal to upcoming larger reversal signals which are indicated separately by the large triangular arrows on the top & bottom of the indicator's panel.
Confluence Zones - Allows the Money Flow & Hyper Wave oscillator to be used together to display easily interpretable shades of bullish & bearish activity. Brighter, more vibrant colors indicate strong bullish or bearish confluence between these 2 features.
Confluence Meter - An optional display at the current bar to easily find the current level of confluence between all features within Oscillator Matrix™ indicated by the arrow pointing to bullish or bearish levels. (Disabled by default)
Generally, we recommend using these features in order from first to last, whereas analyzing components of the Smart Money Flow category prior to considering other features in your analysis is most productive to ensure you find proper confluence alongside any signal that is generated.
🔶 USAGE
In the image below, we can see 5 points of interest to a user analyzing Oscillator Matrix™ based on various different behaviors.
Point 1 : Here we can see a large reversal signal arrow at the bottom of the panel. These signals, like all signals in LuxAlgo Premium & any indicator in general are not meant to be used as buy/sell signals themselves.
What makes this signal particularly more of interest opposed to other reversal signals that may not play out right away is the Money Flow that corresponding as weak. We can tell the Money Flow is weak because it is not near the red threshold level.
This indicates to us that there is not real selling pressure occurring and that the market could easily reverse in these conditions.
Point 2 : In this specific area we can notice the Money Flow in green is moving upwards alongside the green threshold level. This combination indicates a high probability there is a lot of real buying volume coming into the market, opposed to the previous example (point 1) where the Money Flow was not near the threshold level.
We can also notice the Hyper Wave Oscillator is printing a green dot while above the 50 value on Oscillator Matrix™ panel, further indicating a likely bullish impulse to come.
Point 3 : There are multiple indications here showing us the market may potentially be reversing. The most notable being the larger red reversal arrow, however, as we mentioned previously these cannot be used by themselves.
A further indication is that on the Money Flow we can see Overflow has occurred by the lighter small wave that has appeared & is now turning downwards. This indicates that an excess of buyers have come into the market & are likely to be washed out with a move to the downside.
We can see this happen once again about 8 candles later paired with a high frequency reversal signal (red dot) which marked a local high before the larger impulse down.
Point 4 : You can notice during the recent 25 or so candles the high frequency reversal points (green & red dots) have been highly effective for indicating potential local highs & lows in real-time.
There was a previous real-time bullish divergence detected while Money Flow was strongly in the red and this did indicate a small move upwards, however, with the Money Flow still holding in the red, another high frequency reversal dot, and then as the Money Flow begins to decrease further, we see a clean local top detected here at point 4.
Point 5 : As the lower Confluence Zone moved into the bright red, we saw a large move to the downside and a large bullish reversal signal printed in real-time as well.
Just like point 1, we have a very clear indication the selling has stopped as we further analyze the Money Flow is nowhere near it's true Activity Line.
This analysis combined gave us a further indication of a larger reversal which played out with no lag at all as all reversal signals are fully predictive separate from the Hyper Wave oscillator itself, which can be used as a further trend following approach alongside signals & money flow.
🔶 NAVIGATING MARKET CONDITIONS
In the image above we can see another example with 6 new points of interest marked in green & red shaded areas, all accompanied by a list of possible interpretations of the indicator.
The importance of this usage example is to demonstrate the ability to focus on certain components of the indicator during specific market conditions. For any indicator attempting to catch reversals, trending market conditions will be a detriment to its usability.
The same amount of the components within Oscillator Matrix™ will support trending market conditions as there are components to support ranging market conditions. The indicator further aims to provide clear abilities to detect when the market is likely trending or ranging.
With an understanding of the components within the Smart Money Flow section particularly such as the Overflow & Thresholds, it's possible to develop a more significant understanding of when to consider the market is trending vs when to consider the market may be ranging.
By doing this, we can potentially determine at certain points when to 'filter out' reversal signals or to just consider them merely indications of local tops/bottoms opposed to significant tops/bottoms.
Analyzing a significant Overflow particularly is useful to consider a trend potentially coming to an end. For example, at point 5 in the image above we had a clear downtrend only until there was a very considerable amount of Overflow that begun a real reversal.
We recommend studying the outlined chart above & the list of indications at each shaded area to develop a deep understanding of how to navigate varying market conditions & spot various points of confluence during reversals.
🔶 CONCLUSION & ACCESS
This indicator is an extremely comprehensive approach to an oscillator that allows users to further develop a systematic approach to trading and can be paired great alongside other forms of technical analysis such as our LuxAlgo Signals & Overlays indicator.
Although we believe this indicator to be useful, it's critical to understand that past performance is not necessarily indicative of future results and there are many more factors that go into being a profitable trader.
You can see the Author's instructions below to get instant access to Oscillator Matrix™ & our LuxAlgo Premium suite.
LuxAlgo® - Signals & Overlays™Signals & Overlays™ is an all-in-one toolkit made up of more than 20+ features primarily focused on generating useful signals & overlays to fulfill any trader's technical analysis needs with relevant data.
Created directly with TradingView Pine Script Wizard, alexgrover - this is a first of its kind comprehensive script made fully from the ground-up to provide an all-in-one solution for traders.
Signals & Overlays™ can be used alongside other forms of technical analysis, however, it was also designed to be used as a stand-alone toolkit that can fit any trading style. Every feature included considers how not all technical indicators fit every market condition.
The ideal way to utilize this indicator is to explore through all of the features over time, pick & choose 2-3 features best suit your style of trading, and stick with those to create your own unique LuxAlgo trading strategy.
Providing Endless Possibilities Catering To All Trading Styles
Signals & Overlays™ works in any market for discretionary analysis & includes many features:
Beginner-friendly Presets to enable multiple features at once within one-click (locks other settings when enabled).
Confirmation Signals: Normal & Strong signals to help traders confirm trends (not to be followed blindly).
Contrarian Signals: Normal & Strong to help traders spot reversals (also not to be followed blindly).
Exit Signals: "x" marks that apply for both Confirmation Signals & Contrarian Signals to suggest potential take-profit areas during signals.
Signal Optimization Methods: Sensitivity / Agility, optimal sensitvity parameter displayed on dashboard, and Autopilot (dynamic setting).
Candle Coloring: Purple/Green/Red to visualize trends developing between 'normal' & 'strong'.
6+ Indicator Overlays that helps traders visualize trends, find reversal points, and get dynamic areas of support & resistance.
Filters within "Presets / Filters" to allow users to filter Confirmation Signals with Indicator Overlays & other metrics within LuxAlgo Premium.
A complete dashboard with highly actionable metrics such as Trend Strength, current volatility, volume analysis, etc.
Advanced Settings to display customizable TP/SL points, further enhance signal optimizations, & customize dashboard size/location.
Full Any Alert() Function Call Conditions included
Highly useful Filtered Alert Creator section to generate custom filtered signal alerts with Indicator Overlays & other metrics.
+ more. (Check the changelog below for current features)
🔶 USAGE
Basic Signals & Candle Coloring Demonstration
In the image below we can see a basic example of how these 2 core components function within Signals & Overlays™.
As explained earlier, the Confirmation Signals can generate normal labels as well as strong labels marked by the "+" symbol. These signals are directly correlated to the candle coloring in order to see the development of trends & navigate through different market conditions as best as possible.
The candle coloring comes especially in handy when using signals, whereas a positive sign for an uptrend to occur rather than a fake-out is to see candles consistently hold as green. This indicates the market is strong & is likely to continue an uptrend. Vice versa for sell signals & the candles holding as red.
Normal Confirmation Signals often occur with smaller trends, retracements within larger trends, or just as signals a user may not want to trust as much directly. In order to enhance your ability to trust signals more & find more actionable use cases out of LuxAlgo Premium, we recommend going to the settings menu of the indicator & activating some indicator overlays. These are covered in the next section.
🔶 INDICATOR OVERLAYS W/ SIGNALS
In the image below we have enabled the "Smart Trail" & "Reversal Zones" indicator overlays from within the settings of Signals & Overlays™. By using these overlays alongside the signals & candle coloring, users can find more confluence to create trading strategies or plans.
The Smart Trail provides an excellent area of dynamic support/resistance for traders, as well as an additional confluence for general trend following purposes alongside the Confirmation Signals.
The Reversal Zones are particularly useful for areas to immediately take profit on trades, however, during strong trends price may continue rising or falling through the Reversal Zones which makes a good use case of waiting for price to first exit the Reversal Zones before considering the next move in the market.
In the next image below we can see the market is generally ranging, making it more complicated for the standard Confirmation signals to perform greatly as they are meant to excel for finding developing trends. This image displays the Contrarian Signal Mode, Contrarian Gradient candle coloring, as well as the Trend Catcher Indicator Overlay to help us trade these market conditions specifically.
Paired with the Contrarian based candle coloring, these signals can be helpful to a trader looking to find confluent reversals. You can also see the Trend Catcher indicator overlay gives a hybrid approach to analyzing the underlying trend within this price action.
Some traders naturally are Contrarian in nature, so this signal mode may be of primary interest to them, however, most of the use cases will come from the standard Confirmation sigals paired with other overlays or regular technical analysis.
🔶 SIGNALS WITH AI CLASSIFICATION
Our toolkit is able to classify generated signals using a simple machine learning algorithm into four levels. These levels indicate if a signal will most likely indicate a trend continuation (level 3/4) or a reversal/retracement (1/2).
Users are able to filter out certain signals depending on their classification, only keeping signals of interest and potential filtering out false signals.
🔶 FILTERS
In the next image below we can see after resetting the Signals & Overlays™ indicator to it's defaults, we have simply enabled the "Smart Trail Filter" from within the Presets / Filters section at the top of the settings.
By doing this, we can filter out signals that are not aligned with the Smart Trail indicator overlay, which gives direct confluence in every signal that generates on the chart.
Applying filters to signals do not necessarily make them instantly "better" than using the indicator without them. Between every technical indicator, there are trade-offs. So while we can now use Confirmation signals & retests of the Smart Trail as great optimal entry points, at times the indicator may miss signals or retests of the Smart Trail.
The same is seen below with another one of the Filters within Signals & Overlays™; Trend Strength Filter.
We can see the indicator is using the Trend Strength metric to only generate Confirmation Signals that align with a trending market which can clean up a lot of noise during retracements as well as ranging markets.
However, the trade-off present now with this filter enabled is that at times the indicator will miss trends, in which we'd still need to be aware of the price action, candle coloring, or other forms of analysis to give us indications the market may start a new trend opposed to just relying on signals directly.
🔶 CONCLUSION
We believe that success lies in the association of the user with the indicator, opposed to many traders who have the perspective that the indicator itself can make them become profitable. The reality is much more complicated than that.
The aim is to provide an indicator comprehensive, customizable, and intuitive enough that any trader can be led to understand this truth and develop an actionable perspective of technical indicators as support tools for decision making.
You can see the Author's instructions below to get instant access to this indicator & our LuxAlgo Premium indicator suite.
🔶 RISK DISCLAIMER
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