Cloud Channel Signals Indicator [Quantigenics]

8 ธ.ค. 2023

The Cloud Channel Signals script is a key element of the Cloud Channel Signal System. It primarily focuses on identifying breakout and reversal trades through a sophisticated cloud channel overlay. The script, designed for overlay on the price portion of charts, displays a “cloud-like” channel that signals potential breakout and reversal points around the candles/bars, offering insights into price movements, volatility, and potential support or resistance zones at the outer bands of the channel.

As with all of our scripts, the "Cloud Channel Signals" script, is designed to work on ANY symbol and time frame. The input parameters can be adjusted to fit your specific trading style.

Technical Composition:

1. Cloud Channel Construction: The Cloud Channel Signals Script is characterized by its innovative Cloud Channel, a proprietary formulation that advances beyond traditional channel calculations. This channel is not a mere adaptation of Bollinger Bands or Donchian Channels; it sets itself apart through a complex blend of calculations. While incorporating elements like standard deviation and high/low price ranges, it notably introduces EMA-based adjustments and integrates intricate mathematical models. This sophisticated algorithmic approach results in a channel that adeptly marks price extremes and dynamically adapts to market volatility and trend shifts. Enhanced by advanced statistical methods, the Cloud Channel offers nuanced insights into market behavior. Its configuration is based on specific range calculations derived from price fluctuations over a defined period, paired with an evolved standard deviation method. This results in a multifaceted analytical tool that surpasses typical channel indicators in depth and sophistication, providing traders with a comprehensive, nuanced view of support and resistance areas.
   
   
2. Signal Generation Mechanism:
   
   > Breakout Signals:
   The script identifies breakout signals by assessing price crossover relative to a dynamically constructed channel. This channel is derived from a blend of moving averages and price extremes over a specified period. Oscillator crossovers aid in confirming breakout signals. These crossovers are determined by comparing the oscillator line, calculated as a difference between a transformed moving average and a kernel estimation, with a signal line derived from an exponential moving average of the oscillator.
   
   > Reversal Signals:
   Reversal signals are generated through mathematical analysis of price proximity to the channel's edges, which are calculated using a combination of EMA (Exponential Moving Average) values and the highest/lowest price points within a given time frame. The oscillator's role in identifying reversals involves assessing its value relative to its historical range, which is dynamically adjusted based on market conditions.
   
   
3. Oscillator Dynamics:
   The oscillator is constructed using a combination of rational quadratic and Gaussian kernel functions applied to close prices. The length parameter of the oscillator controls the window of these calculations, impacting its responsiveness. The dynamic level adjustment in the oscillator is based on a calculated average of its peak and trough values over a specified period, offering adaptive sensitivity.
   
   
4. Channel Gradient Smoothness:
   The gradient smoothness of the channel is a function of the variance between the channel's upper and lower bounds. This is visually represented through color intensity changes, reflecting the level of volatility and market momentum.
   
   
5. Trend Bias Assessment:
   Trend Bias is calculated using a combination of high/low averages and smoothed price data. This involves taking the average of the highest and lowest prices over a specified length, then applying an exponential moving average to this average for trend direction assessment. This mathematical assessment of trend direction complements the breakout and reversal signals by aligning them with the prevailing market trend.
   

How to Use the Cloud Channel Signals System:

1. Usage Considerations:
   The script must be configured with precision to ensure it aligns with the trader’s strategy. This involves meticulous setting of channel lengths, oscillator parameters, and trend bias length. For effective application, it’s essential to synchronize the input parameters with the companion "Cloud Channel Indicators" script, ensuring a unified analytical perspective. The option to choose real-time vs. post-bar-closure signal generation offers flexibility in trading styles, catering to both aggressive and conservative trading approaches.
   
   
2. Integration with Cloud Channel Indicators script:
   
   > Use the "Cloud Channel Signals" script alongside the "Cloud Channel Indicators" script for comprehensive market analysis. Ensure identical input parameters across both scripts for consistency.
   
   > Note: The lower indicators are from the 'Cloud Channel Indicators' script, complementing the 'Cloud Channel Signals' script seen here, which generates the 'cloud' and signals on the price chart.>The 'Cloud Channel Indicators” script can be found here:https://www.tradingview.com/script/gkhf8c9e-Cloud-Channel-Indicators-Quantigenics/
3. Understanding On-Chart Signals:
   
   The script displays entry signals directly on the chart, offering visual cues for both breakout and reversal trading opportunities. Traders can toggle the display of these signals for either breakout or reversal trades, allowing customization based on their trading strategy.
   
   
4. Identifying Entry Points:
   
   > Breakout Trades: Enable 'Show Break Out Trades' to view signals where the price crosses the cloud channel, coupled with oscillator crossovers. A bullish breakout is indicated when the price crosses above the top channel, and a bearish breakout when it crosses below the bottom channel.
   
   > Reversal Trades: Activate 'Show Reversal Trades' to identify potential reversal points. These are highlighted when the price rebounds from the cloud channel's edges, supported by oscillator and trend bias indicators.
   
   
5. Setting Stop Losses Using Outer Bands: Employ the outer bands of the cloud channel as dynamic stop-loss levels. Position stop losses below the lower band for long trades and above the upper band for short trades, adjusting as the bands shift with market conditions.
   
   
6. Executing and Managing Trades: Enter trades based on the script’s breakout or reversal signals, in line with your risk management rules.
   
   
7. Adjust stop-loss levels: Adjust stop-loss levels according to the outer band movements and exit the trade based on reversal signals or profit targets determined by significant support or resistance levels indicated by the cloud channel.
   

Customizable Alerts for Trading Efficiency:

Set up TradingView alerts to notify you of crucial trading signals like breakout or reversal opportunities, or when the price reaches critical levels defined by the cloud channel.
Adapting Strategy to Market Dynamics:

Input Parameter Settings:

1. Important Usage Guidance: For seamless integration with its counterpart, the "Cloud Channel Indicators" script, it's crucial to align the input parameter settings across both scripts. When adjusting values from their defaults, ensure that corresponding parameters in both scripts are identically set. This synchronization is key to achieving a cohesive and accurate representation on your charts.
   
   
2. Intra-Bar Order Generation (IntraBar) : Allows traders to choose if signals are generated within the current bar (real-time) or after the bar closes, providing flexibility in signal timing.
   
   
3. Show Break Out/Reversal Trades (BreakOutTrades, ReversalTrades) : Enables traders to toggle the visibility of specific trade types - breakout or reversal trades - on the chart.
   
   
4. Show Text Labels (ShowSignalLabels) : Option to display text labels for signals, enhancing the clarity and readability of the chart.
   
   
5. Inner/Outer Channel Length (InnerChannelLength, OutterChannelLength) : Sets the calculation periods for the inner and outer channels, affecting the sensitivity and responsiveness of the cloud channel.
   
   
6. Oscillator Length (OscillatorLength) : Determines the length for the precision oscillator calculation, impacting its sensitivity to market movements.
   
   
7. Top/Bottom Level (TopLevel, BottomLevel) : Establishes the upper and lower bounds for the oscillator, used to identify overbought and oversold conditions.
   
   
8. Use Dynamic Level (Dynamic_Level_OnOff) : Provides an option to use dynamic levels in the oscillator, for a more adaptive and responsive analysis.
   
   
9. Trend Bias Length (TrendBiasLength) : Adjusts the period for the Trend Bias calculation, crucial for understanding the overall market trend.
   
   
10. Top/Bottom Channel Color (TopChannelColor, BottomChannelColor) : Customization options for the color of the top and bottom channels.
    
    
11. Smoothness of The Gradient (Smoothness) : Controls the smoothness level of the channel's gradient, allowing for visual customization.
    

Alert Setting Guidance:

The script includes a versatile alert system for notifying traders of critical trading signals:

1. Breakout and Reversal Trade Alerts: These alerts are activated for breakout and reversal signals based on the script’s analysis, which can be crucial for timely entries and exits.
   
   
2. Custom Alert Conditions: Traders can set up alerts in TradingView’s system to get notified under specific conditions, like when a new signal (arrow up/down) appears on the chart, tailoring the alerts to their trading strategies.
   

The "Cloud Channel Signals [Quantigenics]" script offers a valuable tool for traders looking to capitalize on breakout and reversal opportunities. Its advanced channel and oscillator settings, combined with customizable alert options, make it a valuable addition to any trader's arsenal. Users are encouraged to explore these settings to fully leverage the script's capabilities, keeping in mind that trading involves risks and past performance does not guarantee future results. For optimal results, this script is designed to be used in conjunction with the "Cloud Channel Indicators [Quantigenics].

You can see the “Author’s instructions" below to get immediate access to Cloud Channel Signals Indicators & the rest of the “Quantigenics Premium Indicator Suite”.

23 ก.พ.

เอกสารเผยแพร่

Changed label of input parameter to correct spelling

12 มี.ค.

เอกสารเผยแพร่

Removed unnecessary inputs and fixed issue with alerts.

2 พ.ค.

เอกสารเผยแพร่

Cloud Channel Signals Indicator UPDATE

With this update, we've continued to enhance our Cloud Channel Signals script. We've introduced the Trade Signal Calibrator, described below. Additionally, we've made improvements to the signals, the input settings, and a few other aspects. Be sure to read through the entirety of this update to see all the improvements.

UPDATE: Added New Feature - Trade Signal Calibrator:

Introduction of the Trade Signal Calibrator across all systems, allowing for refined input parameter adjustments tailored to various market conditions. This feature enhances the effectiveness of trade signals by providing a real-time visualization of potential performance improvements.

Input Parameters for Trade Signal Calibrator:

1. Show Trade Stats: This toggle ON/OFF the stats-display at the top-right of the chart.
   
   *Calibrator Bar Count: This is the number of bars taken into consideration when calculating stats. The default is 500 bars, but this can be changed if you wish to lengthen or shorten the amount if historical market data taken into consideration when displaying historical hypothetical trades on the chart and calculating the trade stats.
   
   *Test All Signals: When toggled ON this setting generates stats for every signal on the chart. When toggled OFF it only considers being in one trade at a time. In other words, if it’s in a hypothetical trade and a subsequent signal occurs it will not consider that subsequent trade. It will only “enter” a new trade once the previous one is closed, based on the exit criteria as defined by the input parameters.
   
   *Display Trades: Toggles ON/OFF the hypothetical backtest trades that are plotted on the chart. This feature can be an extremely useful aid in calibrating the input parameters. You may wish to turn it off to reduce chart Clutter once you've fine-tuned the settings to your liking.
   
   *Display Exit Labels: Turns ON/OFF the names of the exits on the hypothetical backtest trades when plotted on the chart.
   
   *Pullback Entry at Signal Price: If checked, this input calculates the stats as if the hypothetical trade entry occurred on pullbacks at the specified signal price rather than the close of the bar (as it would if unchecked). For Buy trades this signal is plotted at the equivalent price of the low of the previous bar as a Limit order placed at that price in anticipation of the market retracing to fill that limit order. This approach can be especially useful in non-trending markets. In strongly trending markets one may wish to analyze stats with this setting unchecked, as price is less likely to retrace under those conditions. Note for Short/Sell trades the signal is plotted at the previous bar’s high.
   
   *Inner Channel Stop Loss: This setting activates stop-loss stats calculations as if a stop loss was placed and trailed at the inner channel price, providing tighter risk management control for trades. This can be more useful in strongly trending markets.
   
   *Outer Channel Stop Loss: Alternately, opting for this parameter widens the stop-loss determination range, utilizing the outer channel price and potentially allowing more room for the trade to breathe before hitting a stop loss, which is generally more favorable in sideways/non-trending markets;
   
   *Allow Open Positions to Reverse: Keeping this setting off will make it such that a trade must fully exit before a new one and the opposite direction can be taken, when calculating stats. If set to on it will calculate the hypothetical trades in a way that allows the position to reverse in the opposite direction when a new signal appears.
   
   *Exit Bars from Entry: This setting specifies the number of bars after entering a trade at which the position will automatically close, regardless of profit or loss or any other conditions. For example, if it’s set to 10, the trade will close after 10 bars. You can enable or disable this feature by checking or unchecking the corresponding box.
   
   *Quantity Per Trade: This adjusts the trade size of contracts, lots, shares, in relationship to the market being traded, as dictated by the chart.
   
   *Profit Target (Per Trade): If toggled ON this sets the amount of profit in a trade (entire quantity taken into consideration, not just per contract or share) that must be achieved for the trade to exit and take profit.
   
   *Stop Loss (Per Trade): If toggled ON this sets the amount of loss in a trade (entire quantity taken into consideration, not just per contract or share) that must occur for the trade to exit and stop out at a loss. This setting calculates independently of the “Use Stop Loss Levels” setting.
   
   UPDATED: Improved Input Parameters for Signals Script: