Rational Qaudratic Kernel Elder Force Index Introduction:
The Rational Quadratic Kernel Elder Force Index is a versatile and mathematically sophisticated technical indicator that enhances the traditional Elder Force Index (EFI) by applying a rational quadratic kernel smoothing technique. This advanced regression method is designed to provide traders with a more adaptive and accurate tool for measuring the strength behind price movements, incorporating the influence of volume. This indicator does not predict future price movements, but it offers a clearer view of market dynamics through its advanced smoothing mechanism.
Key Features:
Elder Force Index Foundation:
The core of this indicator is built on the Elder Force Index, a popular tool developed by Dr. Alexander Elder. The EFI is a momentum indicator that calculates the strength of price movements by combining both price change and volume.
Rational Quadratic Kernel Smoothing: The indicator incorporates a rational quadratic kernel for smoothing, providing traders with a more refined view of price action trends. This kernel is highly adjustable based on user inputs, allowing for flexible tuning to suit individual strategies.
Adaptive Time Frame Weighting:
Through the adjustable parameter Relative Weighting (r), traders can modify the influence of different time frames. Lower values give more weight to longer time frames, while higher values make the behavior resemble that of a Gaussian kernel.
Dynamic Visualization:
The indicator visually displays the smoothed force index as a color-coded line. It dynamically changes color based on market conditions—green when the smoothed force index is positive and red when it is negative—providing a clear and easy-to-read signal for traders.
How It Works:
The Elder Force Index is calculated by multiplying the price change between two bars with the volume of the current bar.
A rational quadratic kernel regression is applied to this raw EFI data. The smoothing process provides a more stable and reliable signal by reducing noise, particularly in volatile markets.
The user-defined parameters, such as the length of the smoothing window and the relative weighting factor, allow traders to customize the indicator to suit their specific trading style or asset class.
User Inputs:
Length:
Sets the smoothing window for the kernel regression. A longer length results in more significant smoothing.
Relative Weighting (r):
Controls the influence of different time frames in the smoothing process. A smaller value emphasizes longer-term data, while a higher value makes it behave more like a traditional Gaussian kernel.
Source:
Select the price source (default is the closing price) for the calculations.
Elder
Composite Bull-Bear Dominance IndexNote: CREDITS: This is based on the Up Down Volume Indicator (published in Trading View) and Elder Ray Index (Bull Bear Power).
The Composite Bull Bear Dominance Index (CBBDI) is a indicator that combines up down volume analysis with Bull and Bear Power to provide a comprehensive view of market dynamics. It calculates Z-scores for up down volume delta and bull bear power measures, averages them, and then smoothes the result using Weighted Moving Average (WMA) for Bull and Bear Power and Volume Weighted Moving Average (VWMA) for Up and Down Volume Delta. The advantages include responsiveness to short-term trends, noise reduction through weighting, incorporation of volume information, and the ability to identify significant changes in buying and selling pressure. The indicator aims to offer clear signals for traders seeking insights into overall market dominance and indicate if the bulls or the bears have the upper hand.
Volume Analysis (Up/Down Volume Delta):
Up/Down Volume Delta reflects the net difference between buying and selling volume, providing insights into the prevailing market sentiment.
Positive Delta: Indicates potential bullish dominance due to higher buying volume.
Negative Delta: Suggests potential bearish dominance as selling volume surpasses buying volume.
Price Analysis (Bull and Bear Power):
Bull and Bear Power measure the strength of buying and selling forces based on price movements and the Exponential Moving Average (EMA) of the closing price.
Positive Bull Power: Reflects bullish dominance, indicating potential upward momentum.
Positive Bear Power: Suggests bearish dominance, indicating potential downward momentum.
Composite Bull Bear Dominance Index (CBBDI):
CBBDI combines the standardized Z-scores of Up/Down Volume Delta and Bull Bear Power, providing an average measure of both volume and price-related dominance.
Positive CBBDI: Indicates an overall bullish dominance in both volume and price dynamics.
Negative CBBDI: Suggests an overall bearish dominance in both volume and price dynamics.
Smoothing Techniques:
The use of Weighted Moving Average (WMA) for smoothing Bull and Bear Power Z-scores, and Volume Weighted Moving Average (VWMA) for smoothing Up/Down Volume Delta, reduces noise and provides a clearer trend signal.
Smoothing helps filter out short-term fluctuations and emphasizes more significant trends in both volume and price movements.
Color Coding:
CBBDI values are color-coded based on their direction, visually representing the prevailing market sentiment.
Green Colors: Positive values indicate potential bullish dominance.
Red Colors: Negative values suggest potential bearish dominance.
New Highs-New-Lows on US Stock Market - Main Chart Edition#### ENGLISH ####
This script visualizes divergences between the price and new highs and new lows in the US stock market. The indicator should be used exclusively on the US stock indices (timeframe >= D).
This is the indicator for the main chart. It should be used together with the subchart indicator of the same name. In order to get the same results between the main and subchart editions, the indicator settings must be manually adjusted equally in both charts.
The approach:
Let's take a bull market as an example. A bull market is characterized by rising highs and rising lows. We can therefore assume that with the rising prices, the number of stocks that form new highs also rises or at least remains constant. This confirms the upward trend and thus expresses that it is supported by the broad stock market. If the market forms new highs and the number of stocks forming new highs decreases at the same moment, these new index highs are no longer supported by the broad stock market but exclusively by a few highly capitalized stocks. This creates a bearish divergence between the index and the NHNL indicator. This means that the uptrend tends to be overheated and a correction becomes more likely. Stops should be drawn closer.
The approach applies conversely, of course, to downtrends as well.
The indicator itself:
The number of new highs and lows (NHNL) are determined using the data sources included in Tradingview, such as "INDEX:HIGN" for NYSE highs. This data is provided on a daily basis. For higher time units (week, month) the daily numbers are shown summed up and not only the Friday value like most other NHNL indicators.
The signal strength is determined on the basis of two factors. The stronger the signal, the clearer (less transparent) the line/arrow. The two factors are on the one hand the strength of the divergence in and of itself, and on the other hand the strength of the overriding trend. The trend strength is determined using a 50 EMA on the NHNL indicator.
To avoid displaying every small divergence and to reduce false signals, the threshold for the signal strength can be set in the indicator settings.
#### GERMAN #####
Dieses script visualisiert Divergenzen zwischen dem Preis und neuer Hochs sowie neuer Tiefs im US Aktienmarkt. Der Indikator sollte ausschließlich auf den US Aktienindizes verwendet werden (Timeframe >= D).
Dies ist der Indikator für den Hauptchart. Er sollte zusammen mit dem gleichnamigen Subchart Indikator verwendet werden. Um gleiche Ergebnisse zwischen Haupt- und Subchart Edition zu erhalten, müssen die Indikatoreistellung manuell in beiden Charts gleichermaßen eigestellt werden.
Der Ansatz:
Nehmen wir uns als Beispiel einen Bullenmarkt. Ein Bullenmarkt zeichnet sich durch steigende Hochs und steigende Tiefs aus. Man kann also annehmen, dass mit den steigenden Preisen auch die Anzahl der Aktien die neuen Hochs ausbilden steigt oder zumindest konstant bleibt. Dies bestätigt den Aufwärtstrend und drückt somit aus, dass dieser vom breiten Aktienmarkt mitgetragen wird. Wenn der Markt neue Hochs bildet und die Anzahl der Aktien, die neue Hochs bilden im selben Moment sinkt, so werden diese neuen Indexhochs vom breiten Aktienmarkt nicht mehr getragen sonder ausschließlich von wenigen hochkapitalisierten Aktien. Es entsteht eine bärische Divergenz zwischen Index und dem NHNL Indikator. Das bedeutet, dass der Aufwärtstrend tendenziell überhitzt ist und ein Korrektur wahrscheinlicher wird. Die Stops sollten näher herangezogen werden.
Der Ansatz gilt umgekehrt natürlich auch bei Abwärtstrends.
Der Indikator an sich:
Die Anzahl der neuen Hochs und Tiefs (NHNL) werden anhand der in Tradingview enthaltenen Datenquellen wie z.B. "INDEX:HIGN" für die NYSE Hochs ermittelt. Diese Daten werden auf Tagesbasis bereitgestellt. Für höher Zeiteinheiten (Woche, Monat) werden die Tageszahlen aufsummiert dargestellt und nicht wie bei den meisten anderen NHNL Indikatoren nur der Freitagswert.
Die Signalstärke wird Anhand zweier Faktoren ermittelt. Je stärker das Signal um so deutlicher (weniger transparent) die Linie/der Pfeil. Die zwei Faktoren sind zum einen die stärke der Divergenz an und für sich, sowie zum anderen die Stärke des übergeordneten Trends. Die Trendstärke wird anhand eines 50er-EMA auf den NHNL-Indikator ermittelt.
Um nicht jede kleine Divergenz anzuzeigen und um Fehlsignale zu reduzieren, kann die Schwelle für die Signalstärke in den Indikatoreinstellungen festgelegt werden.
New Highs-New-Lows on US Stock Market - Sub Chart Edition#### ENGLISH ####
This script visualizes divergences between the price and new highs and new lows in the US stock market. The indicator should be used exclusively on the US stock indices (timeframe >= D).
This is the indicator for the sub chart. It should be used together with the main chart indicator of the same name. In order to get the same results between the main and subchart editions, the indicator settings must be manually adjusted equally in both charts.
The approach:
Let's take a bull market as an example. A bull market is characterized by rising highs and rising lows. We can therefore assume that with the rising prices, the number of stocks that form new highs also rises or at least remains constant. This confirms the upward trend and thus expresses that it is supported by the broad stock market. If the market forms new highs and the number of stocks forming new highs decreases at the same moment, these new index highs are no longer supported by the broad stock market but exclusively by a few highly capitalized stocks. This creates a bearish divergence between the index and the NHNL indicator. This means that the uptrend tends to be overheated and a correction becomes more likely. Stops should be drawn closer.
The approach applies conversely, of course, to downtrends as well.
The indicator itself:
The number of new highs and lows (NHNL) are determined using the data sources included in Tradingview, such as "INDEX:HIGN" for NYSE highs. This data is provided on a daily basis. For higher time units (week, month) the daily numbers are shown summed up and not only the Friday value like most other NHNL indicators.
The signal strength is determined on the basis of two factors. The stronger the signal, the clearer (less transparent) the line/arrow. The two factors are on the one hand the strength of the divergence in and of itself, and on the other hand the strength of the overriding trend. The trend strength is determined using a 50 EMA on the NHNL indicator.
To avoid displaying every small divergence and to reduce false signals, the threshold for the signal strength can be set in the indicator settings.
#### GERMAN #####
Dieses script visualisiert Divergenzen zwischen dem Preis und neuer Hochs sowie neuer Tiefs im US Aktienmarkt. Der Indikator sollte ausschließlich auf den US Aktienindizes verwendet werden (Timeframe >= D).
Dies ist der Indikator für den Subchart. Er sollte zusammen mit dem gleichnamigen Hauptchart Indikator verwendet werden. Um gleiche Ergebnisse zwischen Haupt- und Subchart Edition zu erhalten, müssen die Indikatoreistellung manuell in beiden Charts gleichermaßen eigestellt werden.
Der Ansatz:
Nehmen wir uns als Beispiel einen Bullenmarkt. Ein Bullenmarkt zeichnet sich durch steigende Hochs und steigende Tiefs aus. Man kann also annehmen, dass mit den steigenden Preisen auch die Anzahl der Aktien die neuen Hochs ausbilden steigt oder zumindest konstant bleibt. Dies bestätigt den Aufwärtstrend und drückt somit aus, dass dieser vom breiten Aktienmarkt mitgetragen wird. Wenn der Markt neue Hochs bildet und die Anzahl der Aktien, die neue Hochs bilden im selben Moment sinkt, so werden diese neuen Indexhochs vom breiten Aktienmarkt nicht mehr getragen sonder ausschließlich von wenigen hochkapitalisierten Aktien. Es entsteht eine bärische Divergenz zwischen Index und dem NHNL Indikator. Das bedeutet, dass der Aufwärtstrend tendenziell überhitzt ist und ein Korrektur wahrscheinlicher wird. Die Stops sollten näher herangezogen werden.
Der Ansatz gilt umgekehrt natürlich auch bei Abwärtstrends.
Der Indikator an sich:
Die Anzahl der neuen Hochs und Tiefs (NHNL) werden anhand der in Tradingview enthaltenen Datenquellen wie z.B. "INDEX:HIGN" für die NYSE Hochs ermittelt. Diese Daten werden auf Tagesbasis bereitgestellt. Für höher Zeiteinheiten (Woche, Monat) werden die Tageszahlen aufsummiert dargestellt und nicht wie bei den meisten anderen NHNL Indikatoren nur der Freitagswert.
Die Signalstärke wird Anhand zweier Faktoren ermittelt. Je stärker das Signal um so deutlicher (weniger transparent) die Linie/der Pfeil. Die zwei Faktoren sind zum einen die stärke der Divergenz an und für sich, sowie zum anderen die Stärke des übergeordneten Trends. Die Trendstärke wird anhand eines 50er-EMA auf den NHNL-Indikator ermittelt.
Um nicht jede kleine Divergenz anzuzeigen und um Fehlsignale zu reduzieren, kann die Schwelle für die Signalstärke in den Indikatoreinstellungen festgelegt werden.
Jurik CFB Adaptive, Elder Force Index w/ ATR Channels [Loxx]Jurik CFB Adaptive, Elder Force Index w/ ATR Channels is a variation of Elder Force Index that better adapts to trends by calculating dynamic lengths for the traditional Elder Force Index calculation. ATR channels are added to show levels of price extremes or exhaustion of price either up or down. Elder Force Index is typically used for spotting reversals on the weekly timeframe.
What is the Elder Force Index?
Dr. Alexander Elder is one of the contributors to a newer generation of technical indicators. His force index is an oscillator that measures the force, or power, of bulls behind particular market rallies and of bears behind every decline.1
The three key components of the force index are the direction of price change, the extent of the price change, and the trading volume. When the force index is used in conjunction with a moving average, the resulting figure can accurately measure significant changes in the power of bulls and bears.1 In this way, Elder has taken an extremely useful solitary indicator, the moving average, and combined it with his force index for even greater predictive success.
What is Composite Fractal Behavior ( CFB )?
All around you mechanisms adjust themselves to their environment. From simple thermostats that react to air temperature to computer chips in modern cars that respond to changes in engine temperature, r.p.m.'s, torque, and throttle position. It was only a matter of time before fast desktop computers applied the mathematics of self-adjustment to systems that trade the financial markets.
Unlike basic systems with fixed formulas, an adaptive system adjusts its own equations. For example, start with a basic channel breakout system that uses the highest closing price of the last N bars as a threshold for detecting breakouts on the up side. An adaptive and improved version of this system would adjust N according to market conditions, such as momentum, price volatility or acceleration.
Since many systems are based directly or indirectly on cycles, another useful measure of market condition is the periodic length of a price chart's dominant cycle, (DC), that cycle with the greatest influence on price action.
The utility of this new DC measure was noted by author Murray Ruggiero in the January '96 issue of Futures Magazine. In it. Mr. Ruggiero used it to adaptive adjust the value of N in a channel breakout system. He then simulated trading 15 years of D-Mark futures in order to compare its performance to a similar system that had a fixed optimal value of N. The adaptive version produced 20% more profit!
This DC index utilized the popular MESA algorithm (a formulation by John Ehlers adapted from Burg's maximum entropy algorithm, MEM). Unfortunately, the DC approach is problematic when the market has no real dominant cycle momentum, because the mathematics will produce a value whether or not one actually exists! Therefore, we developed a proprietary indicator that does not presuppose the presence of market cycles. It's called CFB (Composite Fractal Behavior) and it works well whether or not the market is cyclic.
CFB examines price action for a particular fractal pattern, categorizes them by size, and then outputs a composite fractal size index. This index is smooth, timely and accurate
Essentially, CFB reveals the length of the market's trending action time frame. Long trending activity produces a large CFB index and short choppy action produces a small index value. Investors have found many applications for CFB which involve scaling other existing technical indicators adaptively, on a bar-to-bar basis.
What is Jurik Volty used in the Juirk Filter?
One of the lesser known qualities of Juirk smoothing is that the Jurik smoothing process is adaptive. "Jurik Volty" (a sort of market volatility ) is what makes Jurik smoothing adaptive. The Jurik Volty calculation can be used as both a standalone indicator and to smooth other indicators that you wish to make adaptive.
What is the Jurik Moving Average?
Have you noticed how moving averages add some lag (delay) to your signals? ... especially when price gaps up or down in a big move, and you are waiting for your moving average to catch up? Wait no more! JMA eliminates this problem forever and gives you the best of both worlds: low lag and smooth lines.
Ideally, you would like a filtered signal to be both smooth and lag-free. Lag causes delays in your trades, and increasing lag in your indicators typically result in lower profits. In other words, late comers get what's left on the table after the feast has already begun.
Bears Bulls Impulse [Loxx]Bears Bulls Impulse, originally known as the the Elder-Ray Index, is a technical indicator developed by Dr. Alexander Elder that measures the amount of buying and selling pressure in a market. This indicator consists of two indicators known as "bull power" and "bear power," which are derived from a 13-period moving average.
Included:
- Various average modes to fine-tune the signal
This is an exact clone of the "Bears Bulls Impulse" MT4 indicator
Viral Force IndexBased on the Elder Force Index (EFI) indicator, the Viral Force Index (VFI) attempts to normalize the original indicator by plotting EFI on the interval ]-100, 100 [.
VFI comes with a bar coloring feature, allowing users to get an idea of the current value of the indicator without having to look away from the chart.
Additionally, the linear regression line provides a simple way to filter out the noise with little to no additional 'lag'.
License tl;dr: Don't sell it, or distribute it without permission, and you'll be fine.
If you find a bug, or you have feedback, feel free to leave a comment.
Elder Impulse System + ATR BandsDisregard the above chart, I am not sure why it isn't showing the one I want, which is linked below:
This is as far as I can tell the closest representation to Dr. Alexander Elder's updated "Elder Impulse System" that has added ATR-volatility bands up to 3x deviations from price. I got the idea from watching this recent video (www.youtube.com) of Dr. Elder reviewing some recent trades and noticed he had updated his system from his original books. The Impulse System colour coding was inspired by AstralLoverFlow and LazyBear. ATR Bands are pre-programmed Keltner Channels with some modifications such as filing in the ATR Zones with user-selected colour bands and modifying the ATR value to better suit the volatility of the market being traded.
The script has several components, which I will detail below:
Exponential Moving Averages:
1) A 13-period EMA that is used as a staple in all of Dr. Elder's technical analysis. He uses this EMA as the basis for all of his indicators and why it is included here.
2) A 26-period EMA which can be used as a base-line of sorts to filter when to go long or when to go short. For instance, price over the 26-EMA, price is strong and the rally upwards is likely to continue, underneath it, price is weak and likely to continue downwards for a time.
Volatility Bands:
By definition these are nothing more than 3 separate Keltner Channels of a 13-period EMA each set to one additional multiplier from the moving average. This gives us a 1x, 2x, and 3x multiplier of average volatility from the 13-period EMA based on a 14-period Average True Range (ATR) reading. The ATR was chosen as it accommodates price gaps and also is the standard formula calculation in TradingView. The values of the bands cannot be adjusted but the colour coding of them can be.
Elder Impulse System:
These colour-coded bars show you the strength and direction of the current chart resolution, calculated by the slope of a 13-period EMA and the slope of a MACD histogram. These are used not as a buying or selling recommendation alone but as trend filters, as per Dr. Elder's own description of them.
Green Bars = The 13-period EMA is sloping positively and the MACD histogram is rising compared to previous bars. The trader should only consider buying/long opportunities when a green bar is most recent.
Red Bars = The 13-period EMA is sloping negatively and the MACD histogram is falling compared to previous bars. The trader should only consider selling/short opportunities when a red bar is most recent.
Blue Bars = The 13-period EMA and the MACD histogram are not aligned. One of the indicators is sloping opposite to the other indicator. These are known as indecision bars and are typically seen near the end of a previously established trend. The trader can choose to wait for either a green or red bar to shape their trading bias if they are more risk-averse while a counter-trend trader may decide to try opening a position against the currently-established trend.
How To Trade the System:
This system is unique in that it is so versatile and will fit the styles of many traders, be it trend following traders (generally the original Elder Impulse System design) or mean-reversion/counter-trend trading (the original Keltner Channel design). None of the examples below or in the chart above are financial advice and are just there for demonstration purposes only.
1) The most basic signal given would be the moving average cross up or down. A cross of the 13-EMA over the 26-EMA signals upward trend strength and the trader could look for buying opportunities. Conversely, the 13-EMA under the 26-EMA shows downward trend strength and the trader could look for selling opportunities.
2) Following the Elder Impulse system in conjunction with the EMAs. Look for long opportunities when a green bar is printed and price is over both of the 13- and 26-period EMAs. Look for short opportunities when a red bar is printed and price is below both of the 13- and 26-period EMAs. Keep in mind this does not necessarily need a moving average cross to be viable, a green or red bar over both EMAs is a valid signal in this system, usually. Examine price more closely for better entry signals when a blue bar is printed and price is either above or below both EMAs if you are a trend trader. This is how Dr. Elder originally intended the system to be used in conjunction with his famous Triple Screen Trading System. I am not going into detail here as it is a deep subject but I would suggest an interested trader to examine this Triple Screen System further as it is widely accepted as a strong strategy.
3) Mean Reversion and Counter-Trend Trading. Dr. Elder mentions that the zone between the two EMAs is called the Value Zone. A mean reversion trader could look for buying opportunities if price has generally been in an uptrend and falls back to value, conversely, they could look for shorting opportunities if price has generally been in a downtrend and rises back to value. These are your very basic pull backs found in trends that create your higher lows in an uptrend or your lower highs in a downtrend. A mean reversion/scalper trader may also look to use the upper and lower most ATR bands as an indication of price being overbought or oversold and could look to enter a counter-trend trade here once a blue indecision bar is printed and to ride that move back down to the Value Zone.
Taking Profits and Risk Management
This system again is very versatile and will fit a wide range of trading styles. It has built in take profit levels and risk management depending on your style of trading.
1a) In original Triple Screen Trading (and the original Elder Impulse system), a trader was to place a buy order one tick above a newly printed green bar with a stop loss one tick below the most recent 2-day low, and vice-versa for red bars on short selling. as long as other criteria were met, that I will not go into. It is all over YouTube and in his books and on Investopedia if you want more information. The general idea is to continue the trend in the direction if price is strong and you are bought into that move with a close stop, or if price falls back a little bit, you can get in at a better price. This would be a system typically better suited to a scalper.
1b) The updated risk management according to the above video is to place a stop loss at least 2ATR away from price. These bands already have calculated these values so a trader can place a stop one tick below the 2 or even 3ATR zones depending on their risk appetite. This is assuming you have already received a strong buy signal based on the system you follow. This would be a system typically better suited to a trend-trader.
2a) Taking profits if you are a trend trader has several possibilities. The first, as Dr. Elder suggests, is to place a price target 2ATR values away from your entry giving you approximately a 1:1 risk-reward ratio.
2b) The second possibility if the trade is successful is to ride the trend upwards until a blue bar is printed, suggesting indecision in the market. A modified version of this that could let a winning trade run longer is to wait for the price to close under the 13-EMA in fast markets, or close under the 26-EMA in slightly slower markets to maximize potential winnings.
2c) A scalper trader may wish to have a target at either the value zone if they are playing an extended buy/short back to the mean, or if they are being at the mean, to sell or cover when price extends back out to the 2x or 3x zone.
3) Trend traders can additionally use the ATR zones as a sort of safety guidelines for entering a trade. Anything within the 1ATR zone is typically a safer entry as the market is less volatile at this time. Entering when price has gone into the 2ATR zone is signaled as a strong momentum move and can signal a stronger move in the direction of the current closing bar. While not always the case, it is suggested by Dr. Elder to not enter trend trades at the 3ATR zone as this is where you will be likely looking for a counter-trend retracement back to value and a trader entering here in the direction of the trade has a higher chance of being stopped out or not getting in at the best possible price.
Unleash Elder Force on Your ChartI had searched for a proper indicator to recognize important impulses, so I just need to take a look at the indicator to quickly find them on the chart. Alexander Elder's Force is the answer, although I made a few changes to the design.
First, I found more accuracy using Hull Moving Average. It steers faster making sudden spikes even more visible. Second, it is faster to catch up and therefore ready for another impulse to measure.
The second change is to the visual presentation of the Elder Force. Columns look prettier and there needs to be a manually set value that gives regular sideways moves a border beside which it is likely to be either an institutional interference or a trend.
Furthermore, you can plot (minus) Elder Force in the indicator window too. This should be used to compare upside and downside thrusts with each other.
I don't use nor intend to use Elder Force as a buy/sell indicator. The point is to highlight certain price-action moments that I will then review and consider an entry after. I believe most indicators should be used like that.
:)
Elders Force Index - With Signal EMA - ValenteSame as Elders Force Index, but with an Additional EMA for buy and sell signal
Bull vs Bear Power by DGTElder-Ray Bear and Bull Power
Dr. Alexander Elder cleverly named his first indicator Elder-Ray because of its function, which is designed to see through the market like an X-ray machine. Developed in 1989, the Elder-Ray indicator can be applied to the chart of any security and helps traders determine the strength of competing groups of bulls and bears by gazing under the surface of the markets for data that may not immediately be ascertainable from a superficial glance at prices
The Elder-Ray indicator is comprised by three elements – Bear Power, Bull Power and a 13-period Exponential Moving Average.
As the high price of any candle shows the maximum power of buyers and the low price of any candle shows the maximum power of sellers, Elder uses the 13-period EMA in order to present the average consensus of price value. Bull power shows whether buyers are capable of pushing prices above the average consensus of value. Bear power shows whether sellers are capable of pushing prices below the average consensus of value. Mathematically, Bull power is the result of subtracting the 13-period EMA from the high price of the day, and Bear power is the result of subtracting the 13-period EMA from the low price of the day.
What does this study implements
Attempts to customize interpretation of Alexander Elder's Elder-Ray Indicator (Bull and Bear Power) by
• adding additional insights to support/confirm Elder’s strategy with different indicators related with the Elder’s concept
• providing different options of visualization of the indicator
• providing smoothing capability
Other Indicators to support/confirm Elder-Ray Indicator:
Colored Directional Movement Index (CDMI) , a custom interpretation of J. Welles Wilder’s Directional Movement Index (DMI) , where :
DMI is a collection of three separate indicators ( ADX , +DI , -DI ) combined into one and measures the trend’s strength as well as its direction
CDMI is a custom interpretation of DMI which presents ( ADX , +DI , -DI ) with a color scale - representing the trend’s strength, color density - representing momentum/slope of the trend’s strength, and triangle up/down shapes - representing the trend’s direction. CDMI provides all the information in a single line with colored triangle shapes plotted on the top. DMI can provide quality information and even trading signals but it is not an easy indicator to master, whereus CDMI simplifies its usage.
Alexander Elder considers the slope of the EMA, which gives insight into the recent trend whether is up or down, and CDMI adds additional insight of verifying/confirming the trend as well as its strength
Note : educational content of how to read CDMI can be found in ideas section named as “Colored Directional Movement Index”
different usages of CDMI can be observed with studies “Candlestick Patterns in Context by DGT", “Ichimoku Colored SuperTrend + Colored DMI by DGT”, “Colored Directional Movement and Bollinger Band's Cloud by DGT”, and “Technical Analyst by DGT”
Price Convergence/Divergence , if we pay attention to mathematical formulations of bull power, bear power and price convergence/divergence (also can be expressed as price distance to its ma) we would clearly observe that price convergence/divergence is in fact the result of how the market performed based on the fact that we assume 13-period EMA is consensus of price value. Then, we may assume that the price convergence/divergence crosses of bull power, or bear power, or sum of bull and bear power could be considered as potential trading signals
Additionally, price convergence/divergence visualizes the belief that prices high above the moving average or low below it are likely to be remedied in the future by a reverse price movement
Alternatively, Least Squares Moving Average of Price Convergence/Divergence (also known as Linear Regression Curve) can be plotted instead of Price Convergence/Divergence which can be considered as a smoothed version of Price Convergence/Divergence
Note : different usages of Price Convergence/Divergence can be observed with studies “Trading Psychology - Fear & Greed Index by DGT”, “Price Distance to its MA by DGT”, “P-MACD by DGT”, where “Price Distance to its MA by DGT” can also be considered as educational content which includes an article of a research carried on the topic
Options of Visualization
Bull and Bear Power plotted as two separate
• histograms
• lines
• bands
Sum of Bull and Bear Power plotted as single
• histogram
• line
• band
Others
Price Convergence/Divergence displayed as Line
CDMI is displayed as single colored line of triangle shapes, where triangle shapes displays direction of the trend (triangle up represents bull and triangle down represent bear), colors of CDMI displays the strength of the trend (green – strong bullish, red – strong bearish, gray – no trend, yellow – week trend)
In general with this study, color densities also have a meaning and aims to displays if the value of the indicator is falling or growing, darker colors displays more intense move comparing to light one
Note : band's upper and lower levels are calculated by using standard deviation build-in function with multiply factor of 0.236 Fibonacci’s ratio (just a number for our case, no any meaning)
Smoothing
No smoothing is applied by default but the capability is added in case Price Convergence/Divergence Line is assumed to be used as a signal line it will be worth smoothing the bear, bull or sum of bear and bull power indicators
Interpreting Elder-Ray Indicator, according to Dr. Alexander Elder
Bull Power should remain positive in normal circumstances, while Bear Power should remain negative in normal circumstances. In case the Bull Power indicator enters into negative territory, this implies that sellers have overcome buyers and control the market. In case the Bear Power indicator enters into positive territory, this indicates that buyers have overcome sellers and control the market. A trader should not go long at times when the Bear Power indicator is positive and he/she should not go short at times when the Bull Power indicator is negative.
13-period EMAs slope can be used in order to identify the direction of the major trend. According to Elder, the most reliable buy signals are generated, when there is a bullish divergence between the Bear Power indicator and the price (Bear Power forms higher lows, while the market forms lower lows). The most reliable sell signals are generated, when there is a bearish divergence between the Bull Power indicator and the price (Bull Power forms lower highs, while the market forms higher highs).
There are four basic conditions, required to go long or short, with the use of the Elder-Ray method alone.
In order to go long:
1. The market is in a bull trend, as indicated by the 13-period EMA
2. Bear Power is in negative territory, but increasing
3. The most recent Bull Power top is higher than its prior top
4. Bear Power is going up from a bullish divergence
The last two conditions are optional that fine-tune the buying decision
In order to go short:
1. The market is in a bear trend, as indicated by the 13-period EMA
2. Bull Power is in positive territory, but falling
3. The most recent Bear Power bottom is lower than its prior bottom
4. Bull Power is falling from a bearish divergence
The last two conditions are optional, they provide a stronger signal for shorting but they are not absolutely essential
If a trader is willing to add to his/her position, he/she needs to:
1. add to his/her long position, when the Bear Power falls below zero and then climbs back into positive territory
2. add to his/her short position, when the Bull Power increases above zero and then drops back into negative territory.
note : terminology of the definitions used herein are as per TV dictionary
Trading success is all about following your trading strategy and the indicators should fit within your trading strategy, and not to be traded upon solely
Disclaimer : The script is for informational and educational purposes only. Use of the script does not constitute professional and/or financial advice. You alone have the sole responsibility of evaluating the script output and risks associated with the use of the script. In exchange for using the script, you agree not to hold dgtrd TradingView user liable for any possible claim for damages arising from any decision you make based on use of the script
Elder EMA, ATR & MACD Indicator, 5X Time Frame & Divergences.This indicator is elaborated following the 3 window strategy described by Elder.
The fast, slow averages and MACD histogram are taken from a time frame 5 times higher than the active time frame and indicate bullish / bearish trends as well as divergences (bottom) of the hostogram with the price.
FauxLife EFIModification to Elder's Force Index (EFI)
Ability to change calculation from standard EMA to your choice of SMA, EMA, WMA, or HMA. Very interesting results!
Adjust lookback from standard/suggested 13 candlesticks
Added a color indication to positive or negative force reading
Added background color tint for an easier read on dashboard setups
Suggested pair with my On Balance Volume with Cross to use as a filter & entry/exit setup. Enter or exit trades when the two indicators switch at the same time or within 1-2 candlesticks of each other.
Combo Strategy 123 Reversal & Elder Ray (Bull Power) This is combo strategies for get a cumulative signal.
First strategy
This System was created from the Book "How I Tripled My Money In The
Futures Market" by Ulf Jensen, Page 183. This is reverse type of strategies.
The strategy buys at market, if close price is higher than the previous close
during 2 days and the meaning of 9-days Stochastic Slow Oscillator is lower than 50.
The strategy sells at market, if close price is lower than the previous close price
during 2 days and the meaning of 9-days Stochastic Fast Oscillator is higher than 50.
Second strategy
Developed by Dr Alexander Elder, the Elder-ray indicator measures buying
and selling pressure in the market. The Elder-ray is often used as part
of the Triple Screen trading system but may also be used on its own.
Dr Elder uses a 13-day exponential moving average (EMA) to indicate the
market consensus of value. Bull Power measures the ability of buyers to
drive prices above the consensus of value. Bear Power reflects the ability
of sellers to drive prices below the average consensus of value.
Bull Power is calculated by subtracting the 13-day EMA from the day's High.
Bear power subtracts the 13-day EMA from the day's Low.
You can use in the xPrice any series: Open, High, Low, Close, HL2, HLC3, OHLC4 and ect...
WARNING:
- For purpose educate only
- This script to change bars colors.
Elder Impulse SnapshotNASDAQ:AMZN
I've always been intrigued by the Elder Impulse System but found it labour intensive with its flipping back and forth between daily and weekly charts. I also wasn't fond of the way it repainted the candlesticks. So I set out to build a version where you could get every trade signal filtered down in one chart and still see the real price action.
This article provides a decent overview of the original system: www.investopedia.com
Elder Impulse Snapshot uses two EMAs and two MACDs, one of each to process both the daily and weekly data. The daily data gets an EMA of 13 periods and the standard MACD settings. For the weekly info, the EMA is set to 65 periods and all the MACD values are also multiplied by five (60, 130, 45). Buy signals are generated when both EMAs and both MACD histograms are rising. When all four of these elements are falling, sell signals are generated. If any of the indicators disagree, no signal is generated and entering any trade is not advised.
The blue and red arrows are the buy and sell signals. From my reading, it appears Dr. Elder recommended exiting the trade as soon as the system no longer generated a signal, though the case could be made for taking partial profit and moving up your stop loss to ride the trend out longer provided you haven't been stopped out yet.
Elder's Impulse System with weekly EMA Filter - ValenteThis indicator was based on the Elders Impulse System by astraloverflow.
The only difference is that I included the weekly EMA26 as a filter and you can plot it on the graph if you want (unchecking the Weekly EMA26 won't turn the filter off, will only stop plotting it).
The indicator works this way:
When the MACD Histogram is growing UP, the EMA13 is pointing UP AND the Weekly EMA26 is pointing UP, the bar is Green
When the opposite is true, the bar is Red.
When any condition from both green and red is not true, the bar is blue.
In my opinion, this particular indicator works better on the D1 time frame. I recommended using the original one, by astraloverflow for other time frames.
I hope it is useful!
Combo Strategy 123 Reversal & Elder Ray (Bear Power) This is combo strategies for get a cumulative signal.
First strategy
This System was created from the Book "How I Tripled My Money In The
Futures Market" by Ulf Jensen, Page 183. This is reverse type of strategies.
The strategy buys at market, if close price is higher than the previous close
during 2 days and the meaning of 9-days Stochastic Slow Oscillator is lower than 50.
The strategy sells at market, if close price is lower than the previous close price
during 2 days and the meaning of 9-days Stochastic Fast Oscillator is higher than 50.
Second strategy
Developed by Dr Alexander Elder, the Elder-ray indicator measures buying
and selling pressure in the market. The Elder-ray is often used as part
of the Triple Screen trading system but may also be used on its own.
Dr Elder uses a 13-day exponential moving average (EMA) to indicate the
market consensus of value. Bull Power measures the ability of buyers to
drive prices above the consensus of value. Bear Power reflects the ability
of sellers to drive prices below the average consensus of value.
Bull Power is calculated by subtracting the 13-day EMA from the day's High.
Bear power subtracts the 13-day EMA from the day's Low.
You can use in the xPrice any series: Open, High, Low, Close, HL2, HLC3, OHLC4 and ect...
WARNING:
- For purpose educate only
- This script to change bars colors.
[eternal] Elder Ray Bull and Bear Power OscillatorsElder Ray is an indicator that displays Bull Power and Bear Power at the same time.
This indicator is a modified indicator of Elder Ray.
Setting eternal = False and sommozing Period = 1 will be the same as Elder Ray.
Since the eternal option is a definite signal option, it does not disappear even if the value of close changes if a signal comes out.
In other words, when a signal comes out, it is premised to trade immediately, and the signal comes out at the moment when the bar is updated.
The signal of this indicator seems to be weak in the range market due to its operating principle.
(It seems that the author wanted to try a definite signal)
* It has not been verified whether or not you can finally win, so please use it after individual income and expenditure verification.
Elder RayはBull Power, Bear Powerを同時に表示したインジケーターです。
このインジケーターはElder Rayを改造したインジケーターです。
eternal = False, sommozing Period = 1に設定すると Elder Rayと同じものになります。
eternal オプションは確定シグナルオプションなので、シグナルが出ればcloseの値が変化しても消えることはないです。
つまり、シグナルが出れば即座に取引する前提になっていて、シグナルが出るタイミングはバーが更新した瞬間です。
このインジケーターのシグナルは動作原理上レンジ相場に弱いと思われます。
（作者は確定シグナルを試してみたかったらしい）
※最終的に勝てるかは未検証ですので、個人で収支検証後、使用をお願いします。
Combo Strategy 123 Reversal & Elder Ray (Bear Power) This is combo strategies for get a cumulative signal.
First strategy
This System was created from the Book "How I Tripled My Money In The
Futures Market" by Ulf Jensen, Page 183. This is reverse type of strategies.
The strategy buys at market, if close price is higher than the previous close
during 2 days and the meaning of 9-days Stochastic Slow Oscillator is lower than 50.
The strategy sells at market, if close price is lower than the previous close price
during 2 days and the meaning of 9-days Stochastic Fast Oscillator is higher than 50.
Second strategy
Developed by Dr Alexander Elder, the Elder-ray indicator measures buying
and selling pressure in the market. The Elder-ray is often used as part
of the Triple Screen trading system but may also be used on its own.
Dr Elder uses a 13-day exponential moving average (EMA) to indicate the
market consensus of value. Bear Power measures the ability of sellers to
drive prices below the consensus of value. Bear Power reflects the ability
of sellers to drive prices below the average consensus of value.
Bull Power is calculated by subtracting the 13-day EMA from the day's High.
Bear power subtracts the 13-day EMA from the day's Low.
You can use in the xPrice any series: Open, High, Low, Close, HL2, HLC3, OHLC4 and ect...
WARNING:
- For purpose educate only
- This script to change bars colors.
Elder's Triple Screen all in oneThis indicator is coded to have all the setting to have the triple screen trading system by Dr . Alexander Elder. You can use different oscillator and can switch between elder force index (for more active traders) and stochastic (for more conservative approach) you just have to check or
uncheck the relative button on the indicator setting, it will switch automatically. The barcolor reflect the underline trend based on a bigger timeframe, 5 time greater than the one you apply the indicator to.
Range Force Impulse The "Range Force Impulse" indicator combines 4 useful indicators into one, freeing up chart real-estate and giving the trader insight into trend health, bull/bear commitment, range and volatility all at a glance.
The indicator consists of the following:
Direction - True Range and Average True Range columns shown above and below 0 depending on direction of the period's price
-- TR (gray) shows the current period's trading volatility
-- ATR (Impulse colors, see below) shows an EMA of TR over a specified length
-- Can be used to determine stops and targets (Example: Stop loss at prev close - ATR, Target at 2x ATR)
Index - Alexander Elder's EMA of (change(close) * volume), shows crosses above 0 (green) and below 0 (red), and intermediate signals
-- Shows bull vs. bear interest/commitment/dominance
-- Elder recommends EMA length of 2 for daily chart buy/sell signals, and 13 for weekly chart bull/bear dominance & trend direction signals
-- Intermediate signals are shown above 0 when falling (salmon), or below 0 when rising (pale yellow)
System - Range columns are colored using Alexander Elder's censorship system (green: do not short, red: do not long, blue: is up to you)
-- Shows overall trend health (Macd histogram and EMA up/down changes)
Elder impulse releaseThe purpose of Impulse Release is to prevent trading in the wrong direction. While the Impulse System operates in a single timeframe, Impulse Release is based on two timeframes. It tracks both the longer and the shorter timeframes to find when the Impulse points in the same direction on both.
Its color bar flashes several signals:
If one timeframe is in a buy mode and the other in a sell mode, the signal is "No Trade Allowed", a red bar.
If both are neutral, then any trades are allowed, showing a blue bar.
When one is bullish while the other is either bullish or neutral, there is a green bar, allowing traders to buy and prohibiting shorting.
When one is bearish while the other is either bearish or neutral, a red bar signals that shorts are permitted, while long trades are not allowed.
Please check Dr Elders books available on amazon they are a great buy and a nice to read.
Elder ray ( Bull power and bear power combined )Elder-ray is an indicator named for its similarity to x-rays.
It shows the structure of bullish and bearish
power below the surface of the markets. Elder-ray combines a trend-
following moving average with two oscillators to show when to enter
and exit long or short positions.
A moving average reflects the average consensus of value. The high of
each bar reflects the maximum power of bulls during that bar. The low of
each bar marks the maximum power of bears during that bar.
Elder-ray works by comparing the power of bulls and bears during each
bar with the average consensus of value. Bull Power reflects the maximum
power of bulls relative to the average consensus, and Bear Power the max-
imum power of bears relative to that consensus.
When the high of a bar is above the EMA, Bull Power is positive. When
the entire bar sinks below the EMA, which happens during severe de-
clines, Bull Power becomes negative. When the low of a bar is below the
EMA, Bear Power is negative. When the entire bar rises above the EMA,
which happens during wild rallies, Bear Power becomes positive.
The slope of a moving average identifies the current trend of the mar-
ket. When it rises, it shows that the crowd is becoming more bullish; it is
a good time to be long. When it falls, it shows that the crowd is becoming
more bearish; it is a good time to be short. Prices keep getting away from
a moving average but snap back to it, as if pulled by a rubber band. Bull
Power and Bear Power show the length of that rubber band. Knowing the
“Buy low, sell high” sounds good, but traders and investors seem to have
been more comfortable buying Lucent above 70 than below 7. Perhaps they
are not as rational as the efficient market theorists would like us to believe?
Elder-ray gives rational traders a glimpse into what is going on below the sur-
face of the market.
When the trend, identified by the 22-day EMA, is down and bulls are
under water, the rallies back to the surface mark shorting opportunities
normal height of Bull or Bear Power reveals how far prices are likely to get
away from their moving average before returning. Elder-ray offers one of
the best insights into where to take profits—at a distance away from the
moving average that equals the average Bull Power or Bear Power.
Elder-ray gives buy signals in uptrends when Bear Power turns nega-
tive and then ticks up. A negative Bear Power means that the bar is strad-
dling the EMA, with its low below the average consensus of value. Waiting
for Bear Power to turn negative forces you to buy value rather than chase
runaway moves. The actual buy signal is given by an uptick of Bear Power,
which shows that bears are starting to lose their grip and the uptrend is
about to resume. Take profits at the upper channel line or when a trend-
following indicator stops rising. Profits may be greater if you ride the
uptrend to its conclusion, but taking profits at the upper channel line is
more reliable.
Elder-ray gives shorting signals in downtrends when Bull Power turns
positive and then ticks down. We can identify the downtrend by a declin-
ing daily or weekly EMA. A positive Bull Power shows that the bar is strad-
dling the EMA, with its high above the average consensus of value.
Waiting for Bull Power to turn positive before shorting forces you to sell
at or above value instead of chasing waterfall declines. The actual short-
ing signal is given by a downtick of Bull Power, which shows that bulls
are starting to slip and the downtrend is about to resume. Once short, take
profits at the lower channel line or when the trend-following indicator
stops falling, depending on your style.
