Here’s a brief breakdown of what the code is doing:
Inputs for SMA:
You define an input for the length of the Simple Moving Average (sma_length) with a default of 5. Inputs for Supertrend:
ATR length (supertrend_atr_length) is set to 10. Multiplier (supertrend_multiplier) is set to 3. SMA Calculation:
The SMA is calculated using the ta.sma function with the closing prices over the specified length. Supertrend Calculation:
The ta.supertrend function calculates the Supertrend and its direction (positive or negative). Plotting:
You plot the SMA on the chart with the plot function, using the color blue. The Supertrend is also plotted with a color that changes based on the direction. Green for an uptrend (direction > 0) and red for a downtrend (direction <= 0). Background Color:
The background color is dynamically set to green or red based on the trend direction (Supertrend), with a transparency of 90% to give a subtle indication of the current market condition.