btc Top-Bottom Signals Main Chart Indicator

Comprehensive Top-Bottom Signal Indicator

This indicator represents an original synthesis of multiple proven technical analysis concepts into a single, cohesive system. What makes it unique:

Multi-Timeframe Convergence: Unlike single-timeframe indicators, this script integrates signals from three distinct moving averages (SMA200, WMA200, VWMA700) to provide a comprehensive view of market structure.

Dynamic Scoring Algorithm: Instead of relying on individual indicators, it employs a weighted scoring system that evaluates four key market dimensions simultaneously, reducing false signals through consensus.

Volume-Weighted Trend Detection: The inclusion of VWMA700 (700-day Volume Weighted Moving Average) provides superior trend identification compared to simple moving averages by accounting for trading volume intensity.

Anomaly Detection System: The script identifies extreme market conditions through quantifiable deviation thresholds combined with volume confirmation, highlighting potential reversal zones before traditional indicators.

Visual Hierarchy Design: The color-coded system (K-line coloring, moving average colors, signal labels) creates an intuitive visual language that traders can interpret at a glance.

What It Does & How It Works
Core Components:
Trend Identification System:

SMA200: Standard 200-day simple moving average (colored green/red based on price position)

WMA200: 200-day weighted moving average (colored lime/orange with circle markers)

VWMA700: 700-day volume-weighted moving average (purple line) - the primary trend filter

Multi-Dimensional Scoring Engine:
The algorithm calculates scores (0-100) for four market aspects:

Price Deviation: Distance from SMA200, measuring trend extremity

RSI Momentum: Standard RSI with customizable overbought/oversold levels

Volume Activity: Current volume relative to 20-day average

Volatility: ATR percentage, measuring market fear/greed

Signal Generation Logic:

Top Signals: Trigger when Top Score ≥ 75 AND RSI ≥ 70 (configurable)

Bottom Signals: Trigger when Bottom Score ≥ 25 AND RSI ≤ 30 (configurable)

Each signal combines multiple confirming conditions to reduce noise

Anomaly Detection:

Buy Anomalies: Price below VWMA700 by ≥2% (configurable) with volume ≥1.5x average

Sell Anomalies: Price above VWMA700 by ≥2% (configurable) with volume ≥1.5x average

Anomalies are visualized with colored columns above/below price action

Visual Feedback System:

K-line Coloring: Orange when above VWMA700, Blue when below

Column Bars: Green buy anomalies (below chart), Red sell anomalies (above chart)

Signal Labels: "SELL" (red, above bars) / "BUY" (green, below bars)

Trading Methodology & Implementation
Primary Trading Styles Supported:
Trend-Following with Mean Reversion Filters:

The VWMA700 serves as the primary trend filter (bullish above, bearish below)

Signals are only generated when price deviates significantly from long-term mean

This combines trend following with mean reversion principles

Multi-Timeframe Momentum Convergence:

Short-term (WMA200), medium-term (SMA200), and long-term (VWMA700) alignment

Signals gain strength when multiple timeframes confirm direction

Volume-Confirmed Reversal Detection:

Anomaly system specifically targets high-volume deviation points

These often represent institutional accumulation/distribution zones

Composite Indicator Approach:

Instead of single indicators (like pure RSI or MACD), it uses weighted consensus

This reduces individual indicator weaknesses through diversification

Specific Implementation of Trend Identification Methods:
Triple Moving Average System: Combins simple, weighted, and volume-weighted averages

RSI Divergence Logic: Built-in divergence detection (though simplified in current version)

Bollinger Band Concept Adaptation: Uses statistical deviation from long-term mean (VWMA700)

Volume Spread Analysis: Anomaly detection incorporates volume/price relationship

Market Profile Principles: VWMA700 approximates long-term value area

How to Use This Indicator
For Position Traders (Weeks to Months):
Primary Filter: Use VWMA700 as your main trend determinant

Entry Signals: Look for BUY signals when price is below VWMA700 (blue K-lines) with green anomaly bars

Exit Signals: Consider SELL signals when price is above VWMA700 (orange K-lines) with red anomaly bars

Position Sizing: Larger positions when signals align with long-term trend

For Swing Traders (Days to Weeks):
Trend Context: Only take BUY signals in orange K-line zones (above VWMA700) and SELL signals in blue zones

Confirmation: Wait for anomaly bars to confirm signal strength

Risk Management: Use recent swing highs/lows as stop-loss levels

For Market Analysis:
Market State Assessment:

Orange K-lines + Above VWMA700 = Strong bull trend

Blue K-lines + Below VWMA700 = Strong bear trend

Mixed colors + Near VWMA700 = Range-bound/transition

Institutional Activity Detection: Anomaly bars often correspond to smart money moves

Core Calculation Logic & Philosophy
The Weighted Consensus Model:
The indicator's scoring system is based on the principle that no single metric reliably predicts market turns, but consensus across multiple unrelated metrics significantly improves probability. Each component contributes:

Price Score (35%): Measures how far price has extended from its 200-day mean

Philosophy: Extreme deviations tend to revert

Calculation: ((Price - SMA200)/SMA200 * 100 + 30) * 1.5

RSI Score (35%): Standard momentum with custom thresholds

Philosophy: Momentum extremes often precede reversals

Calculation: (RSI - 30) * 1.5

Volume Score (15%): Current volume relative to recent average

Philosophy: Volume confirms price movements

Calculation: (Volume Ratio - 0.5) * 40

Volatility Score (15%): ATR as percentage of price

Philosophy: High volatility often marks turning points

Calculation: (ATR/Close * 100) * 20

The VWMA700 as "True North":
The 700-day Volume Weighted Moving Average serves as the primary reference frame because:

It smooths out 3+ years of market data

Volume-weighting gives more importance to high-conviction trading periods

It represents a long-term consensus of fair value

Anomaly Detection Philosophy:
The anomaly system is based on the principle that extreme price movements accompanied by abnormal volume represent potential turning points. This combines:

Statistical deviation (price distance from VWMA700)

Market participation confirmation (volume spikes)

Visual separation from normal price action (column bars)

Parameter Adjustment Guide
For Different Market Conditions:
High-Volatility Crypto (BTC, ETH):

Top Threshold: 75-80

Bottom Threshold: 20-25

Buy/Sell Threshold: 2.0-2.5%

Volume Multiplier: 1.5-2.0

Lower-Volatility Assets:

Top Threshold: 70-75

Bottom Threshold: 25-30

Buy/Sell Threshold: 1.5-2.0%

Volume Multiplier: 1.3-1.7

During High-Fear Markets:

Increase Bottom Threshold to 30+

Lower Volume Multiplier to 1.3-1.5

This reduces false bottom signals during capitulation

Timeframe Recommendations:
Daily Charts: Primary recommended timeframe

4-Hour Charts: Good for shorter-term positions

Weekly Charts: For very long-term perspective

Risk Management Integration
This indicator is designed to be used with proper risk management:

Signal as Confluence, Not Gospel: Use signals as one of 3-5 confirming factors

Position Sizing: Stronger signals (multiple confirmations) justify larger positions

Stop Placement: Recent swing extremes or VWMA700 itself as dynamic stop

Timeframe Alignment: Strongest when multiple timeframes confirm

Unique Value Proposition
What sets this indicator apart from thousands of others on TradingView:

Holistic Approach: Combines trend, momentum, volume, and volatility in one system

Clear Visual Language: Color-coded system allows quick market assessment

Anomaly Focus: Specifically targets statistically significant market extremes

Long-Term Perspective: VWMA700 provides crucial long-term context often missing in crypto indicators

Customizable Sensitivity: All key parameters adjustable for different market conditions

This script represents a serious tool for traders who understand that market edges come from combining multiple uncorrelated approaches rather than seeking a single "magic" indicator.