What does the indicator do?
The DB Change Forecast Pro is a unique indicator that uses price change on HLC3 to detect buy and sell periods along with plotting a linear regression price channel with oversold and undersold zones. It also has a linear regression change forecast mode to optionally project market direction.
Change is calculated by taking a two-bar change of HLC3 and dividing that by the price or, optionally, a fixed divisor.
A fast-moving change cloud is then calculated and displayed as the "regular version" plot (shown in light gray). When the cloud bottom is above low, a buy zone is detected. When the cloud top is below the high, a sell zone is detected.
The linear regression price channel is calculated similarly but using a much slower change rate. The linear regression price channel shows reasonable high, low and HLC3 ranges. At the bar's opening, the channel will be more compact and come fairly accurate about 1/4 into the bar timeframe.
The change forecasted price is projected on the right side of the current bar to indicate the current timeframe direction. Please note this forecasting feature is shown in orange when it's early in the timeframe and gray when the timeframe is more likely to produce an accurate direction forecast for the upcoming bar.
You can use these projected dashed lines to see possible market movements for the Current bar and possible market direction for the next bar. Kindly note these projects change; they should be used to understand possible extreme highs/lows for the current bar or market direction.
The indicator includes an optional change forecast projection feature hidden by default. It will project the market forecast channel with an offset of 1. The forecast is defaulted to an offset of 1 to show market direction. However, you can modify to zero the offset to show the current bar forecast and forecast history.
How should this indicator be used?
First, very important,
1. Settings > Set Symbol to Desired
2. Settings > Set High Timeframe to "Chart"
3. Settings > Ensure "Use price as divisor" is checked.
It's recommended to use this indicator in higher timeframes. Buy and sell signals are displayed in real-time. However, waiting until 1/4 to 1/2 into the current bar is recommended before taking action, and change can happen.
The buy/sell signals (zones) provide recommendations on playing a long vs. a short. When in a buy sone, only play longs. When in a sell zone, only play shorts.
Then use the linear regression price channel oversold and undersold zones to optionally open and close positions within the buy/sell zones.
For example, consider opening a long in a buy zone when the linear regression price channel shows undersold. Then consider closing the long when the price moves into the linear regression oversold or higher. Then repeat as long as it's in the buy zone. Then vice versa for sell zones and shorting.
At basic design, buy in the buy zone, sell or short in the sell zone. If you are up for higher trading frequencies, use the linear regression price channel as described in the example above.
Please note, as, with all indicators, you may need to adjust to fit the indicator to your symbol and desired timeframe.
This is only an example of use. Please use this indicator as your own risk and after doing your due diligence.
Does the indicator include any alerts?
"DB CFHLC3: Signal BUY" - Is triggered when a buy signal is fired.
"DB CFHLC3: Signal SELL" - Is triggered when a sell signal is fired.
"DB CFHLC3: Zone BUY" - Is triggered when a buy zone is detected.
"DB CFHLC3: Zeon SELL" - Is triggered when a sell zone is detected.
"DB CFHLC3: Oversold SELL" - Is triggered when the price exceeds the oversold level.
"DB CFHLC3: Undersold BUY" - Is triggered when the price goes below the undersold level.
Any other tips?
Once you have configured the indicator for your symbol and chart timeframe. Meaning the plots are displayed over the price. Check out larger timeframes such as W, 2W, 3W, 4W, M, and 4M. It works wonderfully for showing market lows and highs for long-term investing too!
Another, tip is to combine it with your favorite indicator, such as TTM Squeeze or MACD for confirmation purposes. You may be surprised how fast the indicator shows market direction changes on higher timeframes.
You can just as easily use a high timeframe such as D, 2D, or 3D for day trading due to how the linear price channel works.
Why am I not selling this indicator?
I would like to bless the TradingView community, and I enjoy publishing custom indicators.
If you enjoy this indicator, please consider leaving a thumbs up or a comment for others to know about your experience or recommendations.
- Default timeframe is now Chart (can still overwrite in settings)
- Added optional previews for close vs high values on change.
- Added optional custom preview for price high low close.
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