Bar Color Long / Short Indicator With Advised SLOverview
This script is a trading indicator named "Bar Color Long / Short Indicator With Advised SL" designed for the TradingView platform. The indicator's primary purpose is to provide entry signals for long and short positions, based on various technical analysis methods. Additionally, the indicator suggests stop-loss levels for both long and short positions.
User Inputs
The indicator has several user inputs, such as:
Length
Smoothing
Multiplier
Show bar colors (ON/OFF)
When the bar colors are turned off, the alert signals for long and short positions will be displayed instead.
Custom Risk Calculation
The script calculates a custom risk level based on a modified version of the RSI (Relative Strength Index) formula. The custom risk level is divided into three categories: low, medium, and high.
Sentiment Score Calculation
The indicator calculates a sentiment score based on a combination of methods resembling EMA (Exponential Moving Average), MACD (Moving Average Convergence Divergence), and ROC (Rate of Change). The sentiment score is used to determine if the sentiment is positive or negative.
Bollinger Bands Percent and Combined Signal
The Bollinger Bands Percent is calculated, and the custom risk, sentiment score, and Bollinger Bands Percent are combined to generate a new signal. This signal is used in conjunction with EMA10 to determine the bar colors and provide entry signals.
Bar Colors
Based on the combined signal and EMA10, the script determines the bar colors as follows:
Orange: Positive sentiment
Blue: Negative sentiment
Gray: Neutral
Entry Signals and Alerts
When the bar colors are turned off, the indicator displays large green arrow signals for long (buy) positions and red arrow signals for short (sell) positions based on the sentiment and EMA10 conditions. The script also includes alert conditions for long and short signals, which can be used to set up notifications when these signals are triggered in the TradingView platform.
Advised Stop-Loss Levels
The indicator plots stop-loss lines for both long and short positions at the last candle, accompanied by labels showing the advised stop-loss levels in numeric values.
Volatility
DePeg PlayerI have not seen anyone create an indicator that will alert on any depeg of stablecoins, so i decided to make one and publish it for all to use.
I decided to only include the 8 stablecoin pairs that I found to offer leverage trading, so you can take maximum advantage of any depegs that happen with the top 3 stablecoins.
I have also added alerts, so you can automate any trading signals that you would like if a depeg occurs, or to send as a push to your discord/telegram.
Options Price CalculatorIn the team, we continue to explore and expand the boundaries of TradingView.
For now, there is not much an options trader can do with options in TradingView.
We wanted to change that and created a simple option pricer.
You can set up in parameters a set of strikes, implied volatility, and days to expiry.
The indicators will take a risk-free rate from US01Y and the underlying price from your current chart.
It will compute prices and greeks for both put and call options.
Thanks to @MUQWISHI for helping code it.
Disclaimer
Please remember that past performance may not indicate future results.
Due to various factors, including changing market conditions, the strategy may no longer perform as well as in historical backtesting.
This post and the script don’t provide any financial advice.
Trend IndicatorThis indicator has different features:
1. Ichimoku = this indicator can plot Ichimoku calculated both in the common formula and with the volume average, you can choose the calculator method for each line.
2. Channel and Bands = this mode allows the user to choose from channel and band, "channel" shows the Keltner channel, and "band" shows the Bollinger bands. Both the indicators are calculated including the volume in the formula of the average midpoint.
3. Color candle = this function allows the user to see two different colors of candles on the chart, the positive color occurs when both the long-term average and the short team average of price calculated using the volume is above the two averages calculated without the volume. This function is great to analyze the volume pressure, useful to identify trend continuation and exhaustion.
4. Extreme reversal zones = this is a version of the Keltner channels calculated over a high number of candles and with high deviation, to identify the potential zones of reversal.
Note that in the "Ichimoku" indicator, the backline is the T.R.A.M.A. indicator, created and published open source by Lux Algo, which I thank for the script.
Fixed Volatility OscillatorA fixed volatility plotter set to a 0-100 range - Plots the current volatility % using the formula to calculate volatility and stdev (standard deviation) based on the candle lookback.
The indicator is Fixed, which means that regardless of the chart, the volatility will be plotted on a percentage of 0% - 100% with a 101% threshold set to indicate a volatility reset. While the volume of volatility will change depending on the chart, the volatility will ALWAYS stay within this range.
if a plot exceeds 100% it should be marked as volatility reset - not an expansion
and should also be noted that the volatility spikes are also very inconsistent in volume and vary greatly.
The candle lookbacks on standard are organized be from 10 candles to 100 candles. I found the best results using the 50 candles lookback, and therefore have set it as the default value. These different values can be used to pull the information from the # of candles on the selected option - and therefore the volatility will be calculated from the number of candles selected.
// note for other people versed in pinescript
While this indicator may be useful in trading or strategies, it is more meant to incorporated into other scripts or used as a basis that can be further expanded on. The visuals are not built at all - for that purpose.
This script has not been listed as a library for the fact that it can be used as an actual indicator within a strategy - hope you enjoy.
Grid Range Volatility BasedThis TradingView Pine script implements a grid range volatility based indicator that displays dynamic horizontal lines on the chart. The lines are calculated based on the average true range (ATR) of the security being plotted, and the range can be adjusted using an input parameter. The distance between the top and bottom lines is displayed as a percentage in a dynamic label that updates with each new bar.
The script allows the user to choose whether to use red or black lines, and also provides options to set the number of days for range calculations, and the calculation type (either ATR(1) or ATR(x)). The script is designed to work with stocks, forex, and other securities that have price data.
To use this script, simply attach it to a chart and adjust the input parameters to suit your analysis needs. The dynamic lines and percentage label will be displayed on the chart, providing a visual representation of the range volatility of the security being plotted. The values of the highest and lowest lines can also be displayed as labels on the price axis, providing additional context for the range volatility.
Nonfarm [TjnTjn]This indicator will draw a line on your chart to show the Nonfarm announcement date and a line showing the Nonfarm announcement time for that day.
Because normally the Nonfarm announcement date is not simply the first Friday of the month. Because there are days Nonfarm days can be 8 or 9 or 10.
By checking the entire history of nonfarm announcements, I found some more rules such as if the first Friday of the month hits a holiday, the nonfarm day will be the friday of the following week. The previous months are 28, 29, or 30 days and if the first Friday of this month is on the 3, 2 or 1, the nonfarm day will be the friday of the following week.
Since this type of indicator is not available on the Tradingview library, I have put it up for everyone's convenience to backtest the price movement on nonfarm days to better support trading or simply to avoid trading at time of announed nonfarm.
Typical Price Difference - TPD © with reversal zones and signalsv1.0 NOTE: The maths have been tested only for BTC and weekly time frame.
This is a concept that I came through after long long hours of VWAP trading and scalping.
The idea is pretty simple:
1) Typical Price is calculated by (h+l+c) / 3. If we take this price and adjust it to volume we get the VWAP value. The difference between this value and the close value, i call it " Typical Price Difference - TPD ".
2) We get the Historical Volatility as calculated by TradingView script and we add it up to TPD and divide it by two (average). This is what I call " The Source - TS ".
3) We apply the CCI formula to TS .
4) We calculate the Rate of Change (roc) of the CCI formula.
5) We apply the VIX FIX of Larry Williams (script used is from ChrisMoody - CM_Williams_Vix_Fix Finds Market Bottoms) *brilliant script!!!
How to use it:
a) When the (3) is over the TPD we have a bullish bias (green area). When it's under we have a bearish bias (red area).
b) If the (1) value goes over or under a certain value (CAUTION!!! it varies in different assets or timeframes) we get a Reversal Zone (RZ). Red/Green background.
c) If we are in a RZ and the VIX FIX gives a strong value (look for green bars in histogram) and roc (4) goes in the opposite direction, we get a reversal signal that works for the next week(s).
I applied this to BTC on a weekly time frame and after some corrections, it gives pretty good reversal zones and signals. Especially bottoms. Also look for divergences in the zones/signals.
As I said I have tested and confirmed it only on BTC/weekly. I need more time with the maths and pine to automatically adjust it to other time frames. You can play with it in different assets or time frames to find best settings by hand.
Feel free to share your thoughts or ideas on this.
P.S. I realy realy realy try to remember when or how or why I came up with the idea to combine typical price with historical volatility and CCI. I can't! It doesn't make any sense LOL
+ Bollinger Bands WidthHere is my rendition of Bollinger Bands Width. If you are unfamiliar, Bollinger Bands Width is a measure of the distance between the top and bottom bands of Bollinger Bands. Bollinger Bands themselves being a measure of market volatility, BB Width is a simpler, cleaner way of determining the amount of volatility in the market. Myself, I found the original, basic version of BB Width a bit too basic, and I thought that by adding to it it might make for an improvement for traders over the original.
Simple things that I've done are adding a signal line; adding a 'baseline' using Donchian Channels (such as that which is in my Average Candle Bodies Range indicator); adding bar and background coloring; and adding alerts for increasing volatility, and baseline and signal line crosses. It really ends up making for a much improved version of the basic indicator.
A note on how I created the baseline:
First, what do I mean by 'baseline?' I think of it as an area of the indicator where if the BB Width is below you will not want to enter into any trades, and if the BB Width is above then you are free to enter trades based on your system. It's basically a volatility measure of the volatility indicator. Waddah Attar Explosion is a popular indicator that implements something similar. The baseline is calculated thus: make a Donchian Channel of the BB Width, and then use the basis as the baseline while not plotting the actual highs and lows of the Donchian Channel. Now, the basis of a Donchian Channel is the average of the highs and the lows. If we did that here we would have a baseline much too high, however, by making the basis adjustable with a divisor input it no longer must be plotted in the center of the channel, but may be moved much lower (unless you set the divisor to 2, but you wouldn't do that). This divisor is essentially a sensitivity adjustment for the indicator. Of course you don't have to use the baseline. You could ignore it and only use the signal line, or just use the rising and falling of the BB Width by itself as your volatility measure.
I should make note: the main image above at default settings is an 8 period lookback (so, yes, that is quite fast), and the signal line is a Hull MA set to 13. The background and bar coloring are simply set to the rising and falling of the BB Width. Images below will show some different settings, but definitely play with it yourself to determine if it might be a good fit for your system.
Above, settings are background and bar coloring tuned to BB Width being above the baseline, and also requiring that the BB Width be rising. Background coloring only highlights increasing volatility or volatility above a certain threshold. Grey candles are because the BB Width is above the baseline but falling. We'll see an example without the requirement of BB Width rising, below.
Here, we see that background highlights and aqua candles are more prevalent because I've checked off the requirement that BB Width be rising. The idea is that BB Width is above the baseline therefor there is sufficient volatility to enter trades if our indicators give us the go-ahead.
This here is set to BB Width being above the signal line and also requiring a rising BB Width. Keep in mind the signal line is a Hull MA.
And this fourth and final image uses a volume-weighted MA as the signal line. Bar coloring is turned off, and instead the checkboxes for volatility advancing and declining are turned on under the signal line options. BB Width crosses up the signal line is advancing volatility, while falling below it is declining volatility. Background highlights are set to baseline and not requiring a rising BB Width. This way, with a quick glance you can see if the rising volatility is legitimate, i.e., is the cross up of the signal line coupled with it being above the baseline.
Please enjoy.
Rate Of Change [Hyperbolic]Rate Of Change just got fixed!
Do note that you have to activate the "exotic calculations" inside the ROC-H settings.
A hyperbolic curve now transforms price. No more infinities on your indicators!
You may use the "exotic" function, that is embedded in my script in your own scripts.
This formula basically transforms the input (which may be zero or negative) into a strictly positive one.
While the mathematicians out there would opt for alternative formulae (like the exponential for negative numbers), I used the hyperbolic curve for continuity purposes. Feel free to build upon my calculations, and make them even better!
Tread lightly, for this is hallowed ground.
-Father Grigori
P.S. I cannot lock the source code. Science and knowledge belongs to humanity. Knowledge must not be up for sale.
OBV-MACDThe OBV-MACD indicator is a momentum-based technical analysis tool that helps traders identify trend reversals and trend strength. This Pine script is an implementation of the OBV-MACD indicator that uses the On-Balance Volume (OBV) and Moving Average Convergence Divergence (MACD) indicators to provide a momentum data of OBV.
The OBV-MACD indicator uses the OBV to calculate the cumulative volume, which is then smoothed using two moving averages - fast and slow. The difference between these moving averages is plotted as a histogram, with a signal line plotted over it. A buy signal is generated when the histogram crosses above the signal line, indicating a bullish trend, while a sell signal is generated when the histogram crosses below the signal line, indicating a bearish trend.
This Pine script also includes an OBV-MACD-Donchian version that incorporates Donchian channels for the OBV-MACD. The Donchian channel is a technical analysis indicator that helps traders identify the highs and lows of an asset's price over a certain period. The OBV-MACD-Donchian version uses the OBV-MACD indicator along with the Donchian channels to provide signals that the momentum of OBV is making new high/low during that period of time.
Traders can customize the input parameters of the OBV-MACD indicator, such as the timeframe, method of calculation for the moving averages, and the lengths of the moving averages and breakout lengths. The colors of the plot can also be customized to suit the trader's preferences.
Percent Change of Day [ilovealgotrading]
OVERVIEW:
This indicator aims to effectively show us the percentage change of the price within the time frame we have chosen.
What is the purpose of this indicator?
This indicator shows how the price changes for each bar at different time frames we have chosen. By examining the percentage change in different time periods, we can easily look at the change in the face of the market during the time interval. Also if the price is above or below the value of 0 during the specified time, the color of our percentage line changes.
IMPLEMENTATION DETAILS:
First of all, let's understand How to Calculate Percent Change?
The difference between the old and new value of a quantity given in percentages is known as a percent change. It's rather simple to calculate the % difference between two given quantities.
The formula is given by;
Example
The price of a kilo of rice went from 10$ to12.5$, what is the percentage change?
Explanation
• The old value of sugar = $ 10
• New value = $12.5
• Now apply the percent change formula;
• Percentage change = ×100%
= x 100%
= (2.5/10) x 100%
= 25%
In this case, the percent change is positive and therefore, it is an increase.
How Is Percentage Change Used in Finance?
In the world of finance, percentage change is frequently used to analyze changes in the value of stocks or major market indexes over time.
Percentage change is used for many purposes in finance, most notably to track the price change of stocks market and crypto market.
What can we change from the settings panel ?
We can set time frame setting of the percentage change from place number 1
We are able to adjust the changing color if the percentage change is above or below zero from place 2 and 3
ALSO:
Please do not open trades without properly managing your risk and psychology!!!
If you have any ideas what to add to my work to add more sources or make calculations cooler, suggest in DM .
Know Sure Thing + RibbonFrom now on this will be the main indicator I will be using.
The mathematical foundation of KST is elegant and trustworthy. I took the time to share this beautiful (in my opinion) indicator, because you will probably be seeing it in my future ideas.
I am not a trader, this indicator was made to analyze mainly long-term charts, and trend-continuation/change analysis.
The purpose of this indicator is not to give entry/exit points. However, the 9-period EMA (tightest EMA) can serve as an alternative to the classic "9-period MA signal line".
Tread lightly, for this is hallowed ground.
-Father Grigori
GamCP Multi-timeframe v0.1Measures compression on different timeframes, on demand. A high compression precedes high volatilty.
v0.1 - by mufaxor
JZ_Chaikin HTF Volatility BreakoutFirst off, all credit to Harry Potter as this is a minor customization of his indicator.
Basic additions:
-- Added a Higher Timeframe that is set to Daily but can be changed. Timeframe does wait until barstate.isconfirmed so won't repaint.
-- Added HMA smoothing line to both Chart and HTF. Can be used as it's own signal, as confirmation or in combination with faster signal line -- Breakout signal & Range Highlight use both.
-- Added optional coloring of HMA based on whether increasing or decreasing.
-- Added a low volatility option that highlights Range/No Trade zones. Defval is off so needs to be selected from inputs.
Breakout Signals are very simple and both take the HTF signal and HMA. When the faster Volatility line rises from below zero and comes within the range of -10 to 0, AND the HMA signals is increasing (and also below zero) for confirmation, generates a breakout signal of an incoming big move. You can alter the breakout threshold to be greater or less than -10, I just found that works best for filtering out the noise and false signals. Won't catch everything, but pretty reliable when it does.
Tested mostly on BTC so can't vouch for other assets and would likely need modification.
I've JUST taught myself coding from scratch (and to say I'm an amateur is an understatement), so apologies in advance if anything is unclear or could be coded better. Open to any suggestions.
RSI with Keltner Channel (+EMA Ribbon)Note that the EMA Ribbon is not embedded into the custom RSI with KC. In the future I plan to embed it. The EMA Ribbon I use is the following:
This is my very first attempt at modifying an indicator. I basically attempted to add a Keltner Channel around RSI.
This was used as an alternative channel to the standard Bollinger Band. KC goes hand-in-hand with the EMA Ribbon. KC also helps to better pinpoint relative-overbought/oversold conditions.
In my belief, the 20-80 levels don't behave as overbought/oversold levels. An exponential chart would always be overbought. So a Keltner Channel could in theory (and in practice) give us greater understanding on chart analysis.
This custom indicator is a bodge . It has lots of extra calculations that can be removed. I post this rough indicator for the community to give feedback on how I can improve it, or perhaps give an idea to some of you. Please don't judge me, I wouldn't post it but lately some have asked me about it.
In the future I would like to embed an EMA ribbon in this RSI indicator, just like I did in the following idea.
During this period, I don't really have the time to fix this indicator to my standards. So I will leave it as is for the foreseeable future.
If you have the will and knowledge however, feel free to built upon this indicator and share it!
Tread lightly, for this is hallowed ground.
-Father Grigori
PS. In this indicator, I would replace all the moving averages with an EMA Ribbon "average".
Volatility Spike EstimatorPlots the Average True Range (ATR), its historical mean, the upper threshold for a volatility spike, and uses background color to show the likelihood of a volatility spike based on the current ATR value.
Green background indicates an increased likelihood of a volatility spike, while red background means a spike might have already occurred or be in progress.
Update: In this version, we added a short-term ATR calculation with an adjustable input parameter, shortTermATRLength. The likelihood of a volatility spike is now estimated based on the short-term ATR instead of the original ATR. This change makes the indicator more sensitive to recent market conditions and can help detect potential volatility spikes more quickly.
Mora's Compression IndicatorIntroducing Mora's Price Compression indicator.
One of the biggest challenges in trading strategies is to differentiate between zones in which price is consolidated (so called squeezed) and zones of price expansion. Zones of consolidation can indicate traders' indecision or the creation of order blocks, but regardless of their mechanism, most indicators behave differently in those areas as oppose to times when price is trending.
A traditional indicator of consolidation zones is the so call Squeeze, which combines Bollinger Bands and Keltner’s Channels.. although broadly used, its interpretation is not quite straightforward.
Here a new indicator is introduced to identify areas of consolidation or expansion based on current and historical volatility.
Ultimately we know the price is consolidated (current volatility) when it starts raging within a narrower band that we are use to see (Historical volatility), so the ratio of the current to historical volatility becomes a straightforward identification of consolidation zones and that is what this indicator provides.
The indicator is scaled such that values near zero mean price is compressed and values near 100 price is over-extended. The indicators is designed to allow different time-frames, while avoiding repainting.
Turtle Trading Risk Adjusted Position Size CalculatorTurtle Trading Risk Adjusted Position Size Calculator
Hello Traders !
Turtle Trading Risk Adjustment Calculator (inspired by the Turtle Traders Position sizing methods) aims to objectively help day traders allocate the appropriate position size per trade by scaling different instruments by their risk, as measured by their volatility via the ATR (default - Average of 14 period True Range). By doing so This volatility-based position sizing method normalizes risk across different asset classes.
Understanding The formula
Formula U normalizes positions sizes among any non FX asset, by representing a standard unit of risk as a fraction of volatility adjusted by a risk coefficient (note higher risk coeff values (high uncertainty) will lead to lower trade capital allocation i.e lower position size - Varying the risk coefficient is relevant in expressing uncertainty) and scaled to ones trading account size relative to 1 contract of the asset to be traded, This is referred to as the Dollar volatility, formula D.
Dollar volatility is a bit confusing but in essence it is simply a factor of the asset price such that quantity sums to ones Trading account balance or how many times larger ones trading account is than the assets current market price, or more formally The amount of value a $1 change in the contract would impact your trading account given you are current trading all you account equity.
Formula TVPP is my own adaptation of the Turtle Trading Position Sizing formulas and the standard value per pip formula adjusted for volatility, this iteration has the same logic as stated above although the formulas vary.
Hope this is Useful, Wishing you Luck in your Trading Journey - u got this !!
Binance Auto Spot-Futures Premium/Discount -CheThis Script is based in the 2020 @Plumptoiletduck script
Special thanks to @tartigradia for the Auto Detect code for the Binance pair.
It tells us the difference in price between Spot and Perpetual Futures.
Now I incorporated the function that automatically detects the pair we are in to show the premium/discount of that pair.
You never need to select the currency you are in the script anymore!
It is specially designed for Binance coins, it includes all perpetuals.
How to use it?
Usually if the Futures are higher than the Spot it indicates that we are in an over exposure zone of longs in futures.
If the spot is cheaper than the futures it means that the futures are more fearful.
You can use this script with an Open Interest script to get an idea of what is going on.
Other examples:
ATR-Stepped, Another New Adaptive Moving Average [Loxx]ATR-Filtered, Another New Adaptive Moving Average is a modification of @cheatcountry's "Another New Adaptive Moving Average " shown below
I've added AT- stepped filtering. This is a standard ATR filter that works by requiring movement by XX multiple of ATR before registering a trend flip. I've also included Loxx's Expanded Source Types. You can read about those here:
From @cheatcountry on A New Adaptive Moving Average
The New Adaptive Moving Average was created by Scott Cong (Stocks and Commodities Mar 2023) and this is a companion indicator to my previous script
This indicator still works off of the same concept as before with effort vs results but this indicator takes a slightly different approach and instead defines results as the absolute difference between the closing price and a closing price x bars ago. As you can see in my chart example, this indicator works great to stay with the current trend and provides either a stop loss or take profit target depending on which direction you are going in. As always, I use darker colors to show stronger signals and lighter colors to show normal signals. Buy when the line turns green and sell when it turns red.
Included
Alerts
Signals
Loxx's Expanded Source Types
Ladder StDevThis indicator shows the upwards (green) and downward (red) volatility of the market. It is a standard deviation of the price but with a twist! For the upwards volatility , only the green candles are taken into account, and for the downwards only the red candles are.
Compared to my previous "Ladder ATR" indicator this a different approach to measure the the upwards and downwards volatility of the market by utilizing the standard deviation instead of the ATR. When both measure the volatility they have different "dynamics". Standard deviation increases the weight of larger values over smaller values. The ATR indicator is based on the average of absolute changes. So, if we apply the indicators on a daily chart , ATR considers intraday and between-day data, while the standard deviation calculation includes only daily returns (source price).
Volatility Percentile (H-LINES)A simple script that adjusts the Volatility Percentile Indicator visibly in order to better accommodate entries/exits and certain trading setups/strategies.
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TL;DR - Remember after a full reset, we are looking for initial crosses UP on the UpperSwingline and crosses DOWN on the LowerSwingline for primary and secondary signal derivation.
Vice versa also works great but the prior method mentioned is a little more consistent in my experience, but you should mess around and optimise this for your own setups and strategies anyway.
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ORIGINAL SCRIPT HERE:
^Click image for a redirect to that script.
ALL CREDIT GOES TO: www.tradingview.com
He wrote everything so give credit where it's due, good bit of kit this here script is.
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HOW I USE MY VISUALLY ALTERED VERSION OF THIS SCRIPT
First of all, the alterations I've made seem only to be consistently viable with renko charts though if you can get the sought after results using candles or any other chart type then perfect, but be wary. All my back-testing done only with LinReg, HMA and SWMA - ATR type settings exclusively on renko charts. The changes I've made to the original script essentially just turns it visibly into an oscillator and uses a couple horizontal lines to generate signals, very simple - absolutely nothing has changed in the actual code of calculating this indicator.
What I believe my adjustments have achieved is quite simple. A full reset/oscillation on the indicator tries to map the strongest parts of a move or at least the part of the move where volume and the rate of transactions is at its peak to even facilitate said move. *take this statement with a pinch of salt though I do believe it's interacting with accumulation/distribution patterns, which is expected of volatility*
For ease of communication let's refer to the area between the the first UpperSwingline cross to the subsequent LowerSwingline cross, as the primary move. Then afterwards when it crosses the UpperSwingline again to make the full reset, the area in between those two points referred to as the secondary move.
Though more interestingly/practically the indicator ends up giving you two signals. In order for this to work we have to first decide that a spike up in volatility which crosses the UpperSwingline implies a significant level of interest at that price level. Usually that means a reversal is brewing, if price has already moved, trended and is approaching a certain area of value; which causes a spike of new positions to be taken, then you know that this is a level where contrarians are looking to enter. Now here's the tricky part, when volatility crosses the LowerSwingline price action becomes a little more open for interpretation, the way I personally like to look at this secondary signal is the potential for an exhaustion period to prolong itself a little longer. I know that's not the perfect analysis for what's going on, a more in-depth look into what's going on would best be described using Elliott Wave Theory, if a cross on the UpperSwingline near a significant area of value gives us a reversal trade lets just assume for the sake of argument that a new Elliott Wave can begin forming here. Making the move from that initial UpperSwngline cross to the cross on the LowerSwingline, the area that encompasses those two points: the impulse wave. After this point my analogy kind of falls apart and sadly my knowledge just isn't what it needs to be in order for me to properly analyse what's going on here but I must digress. Price after crossing the LowerSwingline up until the point where it makes a full reset by crossing the UpperSwingline again, within this area price seems to do either one of two things:
Situation 1 - Most likely occurs after a major trend reversal from major support/resistance or area of value (price has trended to new territory, maybe spent time a little time consolidating but hasn't broken the key level, momentum shifts, price action breaks current structure and you get the signal that primary move is a reversal) = Exhaustion Period, price will continue in direction of primary move during the secondary move. This here is for our trend-followers, you wanna take a continuation trade? Just wait for the pullback/rally to hit a FiB retracement level and enter - or any other means to find a decent support/resistance to enter.
Situation 2 - Most likely occurs when market enters a range or consolidation (price was previously seen as being at either a discount or premium so Situation 1 could have already played out and now you're looking at a full reset after that, imagine this spot to be the centre line of a linear regression channel or bang in the middle of your range, could even occur if price breaks a key moving average and decides it ought to consolidate around it for a while. Basically at any point where a somewhat prolonged consolidation is expected and not a quick reversal) = Corrective Wave, price will move against the direction of primary move during the secondary move. Now you might be expecting me to say this ones for you reversal traders but not really, if this is occurring then there probably isn't a definitive direction the market has chosen so you can use this opportunity to take range trades in the direction or against the direction of whatever the current trend or latest trend was depending on whatever slight bias you may have. <--- Situation 2 is very useful for finding cleaner entries if you do have a trend bias, say price underwent Situation 1, is now at key moving average but your bias is that it will break and continue up, so you wait and allow the secondary move of Situation 2 to take your entry to a much better R:R before entering a position.
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