RexDog Average with ATR

21 พ.ค. 2021

Bam-- look what Rex did. A RexDog Average with ATR bands-- he's going insane. Simple but powerful.

This indicator includes the RexDog average but provides you with the ability to plot (and customize) both above and below ATR calculated bands.

With this indicator you can display all 3 or any combination of the bands: the RexDog Avg, Adding ATR Upper or the Subtracting ATR Below.

To remove a plot or customize color and line size go to the style options.

Before we get detailed with this version you can customize the default average factor of the RexDog Avg (default is 6). More tips on this below.

How This Works

Just as with the RexDog Average we take the 6 ATR data points (200, 100, 50, 24, 9, 5). We then create an average by dividing by 6. But wait there's more...

With this indicator you can customize independently the above and below bands via a float value for precision. 6 is the default (you can customize by increments at 0.25 or input value you like 1-20).

Now this works opposite how you might think but you'll get it once you start changing the numbers. For instance, editing the above band lowering the ATR factor will raise the band.

RexDog Avg Factor
With this release you are able to change the default average factor (6) to anything you want. You'll find though going too high or low from the default won't get the best results. The default increment change is 0.1 but you can enter any float value you like between 1-20.

The Original RexDog Average Overview

Yes, simple—the RexDog Average is a bias moving average indicator. The purpose is to provide the overall momentum bias you should have when trading an instrument. It works across all markets and all timeframes.

Usage:

• Price above the RexDog AVG = long momentum bias
  
• Price below the RexDog AVG = short momentum bias
  
• With the ATR addition most likely your usage will be similar to Bollinger Bands. While not the same as in deviations much of the same principles might apply, especially with customization.
  

*Note: we have banned the word “trend” in the RexDog Trading Method.

Additional Usage Advice:

If price rips through the average your momentum bias should probably change. 80% of the time when price moves through the RexDog Average it will come back and test the area around average within 1-2 bars. 20% of the time it does not. The momentum is so strong in that direction so look for a 50-70% tests of the bar that impulse through the RexDog Average.

If you are using the RexDog Trading Method by default if the price is above the average and you are short you are in a fade trade. The momentum trade would be long. Of course reverse if price is below.

On multiple time frames. Of course, one timeframe can be long bias and a lower timeframe can be short bias. Which one do you use? Both—if your in a short trade using lower timeframe and with the bias of the average your in a momentum trade—but on the higher timeframe your aware you are essential fading the overall momentum.

Background:

Rex and I searched high and low for one simple thing. A moving average (or combination of some) that we could use to form our momentum bias that worked for all timeframes and all markets we trade.

We tried and tested them all. Even went down the path of ribbons and various other types of hybrid EMA /MA derivatives. Nothing had a high enough accuracy or mathematically was reliable that we could say with a high probability that it was on the right side of the momentum.

We almost stopped and landed on using the true and tested 200 MA—but we found through extensive tests that using the 200MA or EMA you’re often late to the party. Look you don’t need to be the first one in the trade but having a heads up sure helps.

To quote one of the best financial movies of the modern era—Margin Call:
“There are three ways to make a living in this business: be first, be smarter, or cheat… it sure is a hell of a lot easier to be first”. The RexDog Average used properly enables you to be first or damn near close.

Under the Hood:
This is so simple most reading this will discount it. You might even scoff and berate Rex for wasting your time. But you would be wrong. The RexDog Average has been tested across all markets—FOREX, Crypto, Equities, Futures (even tick charts), and even the Penguin population in Antarctica.

The RexDog Average is an average of 6 simple moving averages: 200, 100, 50, 24, 9, 5.

Yes, that’s it.

15 มิ.ย. 2021

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This release has ATR extreme bands (up to 6 of them, 2 turned on by default).

This version is based on a step of the ATR bands.

• Ability to change the step variable. 1 is the most reliable from our tests.
  
• Option to turn all extreme bands off
  
• Options to turn individual extreme bands on/off
  

Here is the indicator with all 6 extreme bands turned on:


What we noticed is while the upper and lower ATR bands for the RDA work well in relatively low volatility -- when volatility spikes it doesn't catch up fast enough.

Thus why we added extreme bands.

Provides a general idea on an extreme volatility move where you'd expect some reaction.

Extreme bands 1 & 2 seems well suited for this.

15 มิ.ย. 2021

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Update image (image above is wrong image and can't edit-- publishing here can be a interesting at times):

5 ก.ค. 2021

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This latest release adds deviation bands from the RexDog Average.

Deviation bands are off by default but can be turned on in the options.

The difference between the 2 bands is the ATR extreme bands use the RexDog ATR in a stepped approach to display ATR extremes.

The deviation bands use a standard deviation calculation (default 2) to display the extreme price bands from the RexDog Average.

Also updated the color declarations to abide by future changes coming to pinescript.