Divergence-Weighted clouds V 1.0Comprehensive Introduction to Divergence-Weighted Clouds V 1.0 (DW)
In financial markets, the analysis of volume and price plays a fundamental role in identifying trends, reversals, and making trading decisions. Volume indicates the level of market interest and liquidity focused on an asset, while price reflects changes in supply and demand. Alongside these two elements, market volatility, support and resistance levels, and cash flow are also critical factors that help analysts form a comprehensive view of the market. The Divergence-Weighted Clouds V 1.0 (DW) indicator is designed to simultaneously analyze these fundamental elements and other important market dynamics. To achieve this, it utilizes data generated from 13 distinct indicators, each measuring specific aspects of the market:
Trend and Momentum: Analyzing the direction and strength of price movements.
Volume and Cash Flow: Understanding the inflow and outflow of capital in the market.
Oscillators: Identifying overbought and oversold conditions.
Support and Resistance Levels: Highlighting key price levels.
The Core Challenge: Standardizing Diverse Data
The primary challenge lies in the fact that the outputs of these indicators differ significantly in scale and meaning. For example:
Volume often generates very large values (e.g., millions of shares).
Oscillators provide data within fixed ranges (e.g., 0 to 100).
Price-based metrics may vary in entirely different scales (e.g., tens or hundreds of units).
These differences make direct comparison of the data impractical. The DW indicator resolves this challenge through an advanced mathematical methodology:
Normalization and Hierarchical Evaluation:
To standardize the data, a process called hierarchical EMA evaluation is employed. Initially, the raw outputs of each indicator are computed over different timeframes using Exponential Moving Averages (EMA) based on prime-number intervals.
Hierarchical Scoring:
A pyramid-like structure is used to evaluate the performance of each indicator. This method examines the relationships and distances between EMAs for each indicator and assigns a numerical score.
Final Integration and Aggregation:
The scores of all 13 indicators are then mathematically aggregated into a single number. This final value represents the overall market performance at that moment, enabling a unified interpretation of volume, price, and volatility.
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Indicators Used in DW
To achieve this comprehensive analysis, DW leverages 13 carefully selected indicators, each offering unique insights into market dynamics:
Trend and Momentum
- ALMA (Arnaud Legoux Moving Average): Reduces lag for faster trend identification.
- Aroon Up: Analyzes the stability of uptrends.
- ADX (Average Directional Index): Measures the strength of a trend.
Volume and Cash Flow
- CMF (Chaikin Money Flow): Identifies cash flow based on price and volume.
- EFI (Elder’s Force Index): Evaluates the strength of price changes alongside volume.
- Volume Delta: Tracks the balance between buying and selling pressure.
- Raw Volume: Analyzes unprocessed volume data.
Oscillators
- Fisher Transform: Normalizes data to detect price reversals.
- MFI (Money Flow Index): Identifies overbought and oversold levels.
Support, Resistance, and Price Dynamics
- Ichimoku Lines (Tenkan-sen & Kijun-sen): Analyzes support and resistance levels.
- McGinley Dynamic: Minimizes errors caused by rapid price movements.
- Price Hierarchy: Evaluates the relative position of prices across timeframes.
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Example: Hierarchical Scoring for Price Analysis
To illustrate how the DW indicator processes data, let’s take the price as an example and analyze it using the first four prime numbers (2, 3, 5, and 7) as intervals for Exponential Moving Averages (EMAs). This example will demonstrate how the indicator evaluates price relationships and assigns a hierarchical score.
Step-by-Step Calculation:
1. Raw Data:
Let’s assume the closing prices for a specific asset over recent days are as follows:
Day 1: 100
Day 2: 102
Day 3: 101
Day 4: 104
Day 5: 103
Day 6: 105
Day 7: 106
2. Calculate EMAs for Prime Number Intervals:
Using the prime-number intervals (2, 3, 5, 7), we calculate the EMAs for these timeframes:
EMA(2): Averages the last 2 closing prices equal to 105.33
EMA(3): Averages the last 3 closing prices equal to 104.25
EMA(5): Averages the last 5 closing prices equal to 103.17
EMA(7): Averages the last 7 closing prices equal to 102.67
3. Compare EMAs Hierarchically:
To assign a score, the relationships between the EMAs are analyzed hierarchically. We evaluate whether each smaller EMA is greater or less than the larger ones:
Compare EMA(2) to EMA(3), EMA(5), and EMA(7):
EMA(2) > EMA(3):105.33>104.25 => +1
EMA(2) > EMA(5): 105.33>103.17 => +1
EMA(2) > EMA(7): 105.33 > 102.67 => +1
Compare EMA(3) to EMA(5) and EMA(7):
EMA(3) > EMA(5) : 104.25>103.17 => +1
EMA(3) > EMA(7):104.25 >102.67 => +1
Compare EMA(5) to EMA(7):
EMA(5) > EMA(7):103.17>102.67 => +1
Assign a Score:
Each positive comparison adds +1 to the score. In this example:
Total Score for Price = 1+1+1+1+1+1+1=6
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Logic Behind Scoring:
The score reflects the "steepness" or "hierarchy" of price movement across different timeframes:
A higher score indicates that shorter EMAs are consistently above longer ones, signaling a strong upward trend.
A lower score or negative values would indicate the opposite (e.g., short-term prices lagging behind long-term averages, signaling weakness or potential reversal).
This method ensures that even complex data points (like price, volume, or oscillators) can be distilled into a single, comparable numerical value. When repeated across all 13 indicators, it enables the DW indicator to create a unified, normalized score that represents the overall market condition.
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Settings and Customization in Divergence-Weighted Clouds V 1.0 (DW)
The Divergence-Weighted Clouds V 1.0 (DW) indicator provides extensive customization options to empower traders to fine-tune the analysis according to their specific needs and trading strategies. Each of the 13 indicators is fully customizable through the settings menu, allowing adjustments to parameters such as lookback periods, sensitivity, and calculation methods. This flexibility ensures that DW can adapt seamlessly to a wide range of market conditions and asset classes.
Key Features of the Settings Menu
1. Global Settings:
Lookback Periods: Define the timeframe for data aggregation and analysis across all indicators.
Normalization Settings: Adjust parameters to refine the process of scaling diverse outputs to a comparable range.
Divergence Sensitivity: Control the weight given to indicators deviating from the average, enabling a focus on outliers or broader trends.
2. Indicator-Specific Settings:
Each of the 13 indicators has its own dedicated section in the settings menu for precise customization. Examples include:
ALMA (Arnaud Legoux Moving Average):
Window Size: Set the number of bars used for calculating the average.
Offset: Control the sensitivity of trend detection.
Sigma: Adjust the smoothing factor for the calculation.
Aroon Up:
Length: Modify the lookback period for identifying highs and evaluating uptrends.
ADX (Average Directional Index):
DI Length: Specify the period for calculating directional indicators (DI).
ADX Smoothing: Adjust the smoothing period for trend strength analysis.
3. Oscillator Settings:
Fisher Transform:
Length: Customize the period for normalization and detecting reversals.
Money Flow Index (MFI):
Length: Set the timeframe for analyzing overbought and oversold conditions.
4. Volume and Cash Flow Settings:
Chaikin Money Flow (CMF):
Length: Define the period for analyzing cash flow based on price and volume.
Volume Delta:
Timeframe: Select a custom timeframe for analyzing buying and selling pressure.
5. Support and Resistance Settings:
In the Support and Resistance category of the DW indicator, we address the logic behind four components:
McGinley Dynamic
Price Hierarchy
Base Line
Conversion Line
The settings structure for this section primarily focuses on McGinley Dynamic, while the other three elements—Price Hierarchy, Base Line, and Conversion Line—operate based on predefined values derived from the mathematical structure and logic of the DW indicator. Let’s explore this in detail:
McGinley Dynamic
Length: The only customizable setting in this category. Users can adjust the length parameter to tailor the responsiveness of the McGinley Dynamic to different market conditions. McGinley Dynamic adapts dynamically to the speed of price changes, reducing lag and minimizing false signals. Its flexibility allows it to serve as both a trendline and a support/resistance guide.
Price Hierarchy
The Price Hierarchy component in DW leverages a pyramid structure and triangular scoring based on prime-number intervals (e.g., 2, 3, 5, 7). This methodology ensures a mathematically robust framework for evaluating the relative position of prices across multiple timeframes.
Why No Settings for Price Hierarchy?
The unique properties of prime numbers make them ideal for constructing this hierarchical scoring system. Changing these intervals would compromise the integrity of the calculations, as they are specifically designed to ensure precision and consistency. Therefore, no customization is allowed for this component in the settings menu.
Conversion Line and Base Line
The Conversion Line (Tenkan-sen) and Base Line (Kijun-sen) are integral components derived from DW’s scoring methodology and represent short-term and medium-term equilibrium levels, respectively. These lines are calculated using the Ichimoku framework, which provides a reliable and well-recognized mathematical basis:
Conversion Line: The average of the highest high and lowest low over a fixed period of 9 bars.
Base Line: The average of the highest high and lowest low over a fixed period of 26 bars./list]
Both lines are utilized in DW as part of the 13 generated indicator variables to assess market equilibrium.
Why Default Values for Conversion and Base Lines?
These values are fixed to the default Ichimoku parameters to:
- Ensure consistency with the broader Ichimoku logic for users familiar with its methodology.
- Prevent confusion in the settings menu, as customization of these parameters is unnecessary for DW’s scoring system.
Important Note: While these lines are derived using Ichimoku logic, they are not standalone Ichimoku components but are embedded into DW’s mathematical structure. In the next section, we will elaborate on how the Ichimoku framework is employed for the graphical visualization of DW’s calculations.
Displaying the Results of 13 Indicator Integration in DW Indicator
The Divergence-Weighted Clouds V 1.0 (DW) employs a rigorous methodology to integrate 13 distinct indicators into a single, normalized output. Here's how the process works, followed by an explanation of the visualization strategy leveraging Ichimoku logic.
Simultaneous Evaluation of 13 Indicators
1. Mathematical Integration Logic:
Normalization: The outputs of all 13 indicators (e.g., ALMA, ADX, CMF) are normalized into comparable ranges, ensuring compatibility despite their diverse scales.
Hierarchical Scoring with Prime Intervals: For each indicator, Exponential Moving Averages (EMAs) are calculated using prime-number intervals (e.g., 2, 3, 5, 7). These EMAs are evaluated through a triangular scoring system, creating individual scores for each indicator.
Divergence Weighting: Indicators showing significant divergence from group averages are given higher weights, amplifying their influence on the final score.
2. Unified Score Calculation:
The normalized and weighted outputs of all 13 indicators are aggregated into a single score.
This score represents the overall behavior of the market, based on the simultaneous evaluation of trend, volume, oscillators, and price metrics.
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Challenge of Visualizing Results
The next challenge lies in effectively visualizing the score to make it actionable for traders. The DW indicator resolves this challenge by leveraging the Ichimoku framework.
Why Ichimoku for Visualization?
The Ichimoku system is known for its clear and predictive visualization capabilities, making it ideal for representing DW’s complex calculations:
1. Cloud-Based Display: Ichimoku Clouds (Kumo) are intuitive for identifying equilibrium zones and future price movements.
2. Projection Ability: The forward-projected Leading Spans (Senkou A and B) provide predictive insights based on past and current data.
3. Trader Familiarity: Ichimoku is widely recognized, reducing the learning curve for users.
Implementation of Ichimoku Logic
1. Mapping Score to Price:
The score is normalized and mapped to price using a scale factor, ensuring alignment with price data while preserving DW’s analytical integrity.
2. Ichimoku Cloud Lines:
Conversion Line (Tenkan-sen): Short-term equilibrium based on the score, calculated using a 9-period high-low average.
Base Line (Kijun-sen): Medium-term equilibrium calculated using a 26-period high-low average.
Leading Spans (Senkou A & B):
- Senkou A: Average of the Conversion and Base Lines.
- Senkou B: High-low average over a 52-period window.
Lagging Span (Chikou): Unlike traditional Ichimoku, DW’s Lagging Span reflects the Nebula Score shifted backward, providing a historical perspective on combined indicator behavior
3. Cloud Dynamics:
The Kumo Cloud is filled based on the relative position of Senkou A and Senkou B, using color shading to distinguish bullish and bearish conditions.
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Customization in Computational Settings
The core computational components of DW allow some customization for sensitivity adjustments:
Divergence Sensitivity: Controls the weight assigned to indicators with higher divergence.
Volatility Normalization: Adjusts the lookback period for volatility adjustments, refining the Nebula Score scaling.
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Advantages of Using Ichimoku Logic
1. Predictive Visualization:
The forward-projected cloud provides actionable insights for identifying trends and reversals earlier than traditional Ichimoku.
2. Aligned Lagging Span:
DW’s Lagging Span represents the normalized evaluation of all 13 indicators, offering a unique perspective beyond just closing price.
3. Intuitive Interpretation:
Traders familiar with Ichimoku can easily interpret DW’s outputs, making it accessible and effective.
Conclusion
By combining rigorous mathematical evaluation with Ichimoku’s visualization strengths, DW provides traders with a clear, actionable representation of market conditions. This ensures that the complex integration of 13 indicators is not only analytically robust but also visually intuitive.
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Comparison Between Divergence-Weighted Clouds V 1.0 (DW) and Traditional Ichimoku: NVIDIA 4H Chart
The chart showcases a side-by-side comparison of the Divergence-Weighted Clouds V 1.0 (DW) indicator (on the left) and the Traditional Ichimoku indicator (on the right). This comparison highlights the differences in how the two indicators interpret market trends and project equilibrium zones using their respective methodologies.
Key Observations and Insights
1. Base and Conversion Line Movements:
On Thursday, November 21, 2024, 17:30, in the DW indicator (left chart), the Base Line crosses above the Conversion Line, signaling a shift in medium-term equilibrium relative to short-term equilibrium.
On the Traditional Ichimoku (right chart), this crossover is not reflected until Monday, November 25, 2024, 17:30, occurring 4 days later.
Significance:
The DW indicator identifies the crossover and equilibrium shift significantly earlier due to its ability to process and normalize data from 13 distinct indicators.
This predictive capability provides traders with earlier insights, enabling them to anticipate changes and adjust their strategies proactively.
2. Cloud Dynamics and Leading Spans:
In both charts, the cloud (Kumo) represents the equilibrium and potential support/resistance zones.
The DW indicator’s Leading Span A and Leading Span B react faster to market changes, creating a more responsive and forward-looking cloud compared to the traditional Ichimoku.
Example:
On the DW chart (left), the cloud begins shifting to reflect the crossover earlier, signaling potential future support/resistance levels.
In the Ichimoku chart (right), the cloud reacts more slowly, lagging behind the DW indicator.
3. Lagging Span (Chikou Line):
In the DW indicator, the Lagging Span is based on the normalized output of the 13 indicators, reflecting their aggregated behavior rather than just the closing price shifted backward as in the traditional Ichimoku.
This provides a unique perspective on past market strength, aligning the Lagging Span more closely with the overall market condition derived from DW’s computations.
4. Price Alignment:
In the DW indicator, all normalized scores and values are mapped to align with price action, ensuring that the visualization remains intuitive while incorporating complex calculations.
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Advantages of DW Over Traditional Ichimoku
1.Earlier Signal Detection:
As demonstrated by the Base and Conversion Line crossover, DW detects changes in market equilibrium 4 days earlier, giving traders a significant advantage in anticipating price movements.
2. Enhanced Predictive Power:
The Leading Spans in DW’s cloud react faster, providing clearer forward-looking support and resistance zones compared to the traditional Ichimoku.
3. Comprehensive Data Integration:
While the Ichimoku relies solely on price-based calculations, DW integrates outputs from 13 distinct indicators, offering a more robust and comprehensive analysis of market conditions.
4. Alignment with Market Behavior:
The DW Lagging Span reflects the aggregated score of multiple indicators, aligning more closely with overall market sentiment and providing a deeper context than the price-based Lagging Span in Ichimoku.
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Final Note
The chart comparison illustrates how the Divergence-Weighted Clouds V 1.0 (DW) indicator outperforms traditional Ichimoku in terms of signal responsiveness and predictive accuracy. By combining the mathematical rigor of DW’s calculations with the visual clarity of Ichimoku, traders gain a powerful tool for analyzing market trends and making informed decisions.
Look at the DW chart (left) to see how early signals and cloud adjustments provide actionable insights compared to the slower reactions of the Traditional Ichimoku chart (right).
Nyse
Volume and Price, EMA Hierarchy Scoring Relations V 1.1Understanding the Volume and Price, EMA Hierarchy Scoring Indicator
Financial markets are often analyzed through a series of technical indicators, each providing valuable but isolated insights into price movements, volume dynamics, and trends. While these tools are widely used, they often lack context when applied individually. The Volume and Price, EMA Hierarchy Scoring Indicator was developed to bridge this gap by introducing structure, context, and relationships between these known indicators.
By utilizing Exponential Moving Averages (EMAs) and assigning periods derived from prime numbers, this indicator creates a scoring system that evaluates the relative positioning and interaction of 13 widely used technical tools. This approach adds meaning to individual indicator outputs by:
Revealing how their results align, diverge, or complement each other.
Quantifying their collective behavior through a hierarchy scoring system.
Enabling traders to not only analyze indicators individually but also combine them to uncover how they influence and interact with each other.
The result is a tool that provides clarity and insight into market behavior, enabling traders to move beyond surface-level analysis and uncover deeper patterns and relationships within the data.
Key Features and Methodology
The Volume and Price, EMA Hierarchy Scoring Indicator is built on a robust mathematical framework that evaluates and visualizes the relationships between 13 widely used technical indicators. By leveraging Exponential Moving Averages (EMAs) and prime numbers, the indicator provides meaningful insights into individual indicator performance as well as their combined behavior.
1. EMA Hierarchy Scoring
At the core of the indicator is its ability to assess the hierarchy of EMAs for each tool. This hierarchy scoring evaluates how the EMAs are aligned relative to one another, providing traders with a quantifiable measure of the indicator's internal consistency and its alignment with trends.
How It Works:
Each EMA is assigned a period derived from a unique prime number. This ensures that no two EMAs overlap, preserving their individuality.
The scoring system measures the gaps between these EMAs, assigning weighted values to these relationships based on their position in the hierarchy.
Why Prime Numbers?
Prime numbers ensure that the EMA periods are distinct and mathematically unrelated, creating a structured yet diverse dataset for analysis.
This approach allows the scoring system to capture both short-term and long-term trends, while avoiding redundancy.
2. Independent Indicator Evaluation
One of the key features of this indicator is the ability to analyze any of the 13 tools individually. Each indicator has its own module, complete with adjustable parameters and dedicated visualizations:
Histograms: Represent the raw EMA hierarchy score. Positive bars indicate alignment with upward trends, while negative bars highlight potential reversals or misalignments.
Smoothed Line: Averages the histogram values, reducing short-term noise and emphasizing longer-term trends.
Signal Line: Highlights trend shifts by smoothing the smoothed line further. Crossovers between the smoothed line and the signal line act as actionable signals for traders.
3. Combining Indicators for Context
Beyond individual analysis, the indicator allows users to combine multiple indicators to evaluate their interactions. For example:
Pairing ALMA (price smoothing) with Volume enables traders to see how price trends are supported or contradicted by market activity.
Combining Delta Volume and CMF (Chaikin Money Flow) reveals nuanced dynamics of buying and selling pressure.
Number of Combinations
With 13 tools available, the indicator supports "two to the power of thirteen minus one," which equals 8,191possible combinations. This flexibility empowers traders to experiment with various subsets of indicators, tailoring their analysis to specific market conditions or strategies.
Detailed Breakdown of Indicators
The Volume and Price, EMA Hierarchy Scoring Indicator integrates 13 widely used technical indicators, each bringing a unique perspective to market analysis. These indicators are scored individually using the EMA hierarchy system and can also be combined for more comprehensive insights.
Here’s a detailed look at what each indicator contributes:
Price Analysis
Arnaud Legoux Moving Average (ALMA):
Purpose:
ALMA smooths price data, reducing noise while maintaining responsiveness to trends.
Unique Features:
The EMA hierarchy scoring highlights how well ALMA’s EMAs align, revealing the strength of price trends.
Visualization includes a histogram of ALMA scores, a smoothed line, and a signal line.
Settings:
Adjustable parameters for the window size, offset, and sigma.
Tooltips guide users on how each setting affects the calculation.
Application:
Evaluate price momentum or combine with volume-based indicators to validate trends.
2. Price Hierarchy Score (PRC):
Purpose:
Focuses solely on price behavior to identify consistency and strength.
Visualization:
Includes a histogram representing raw scores and smoothed and signal lines for trend detection.
Settings:
Adjustable EMA periods derived from prime numbers.
Customizable smoothing and signal periods.
Volume Insights
3. Chaikin Money Flow (CMF):
Purpose:
Integrates price and volume data to measure capital flow direction and strength.
Visualization:
Raw CMF hierarchy scores are plotted, alongside smoothed and signal lines for easier trend identification.
Settings:
Lookback period adjustment for CMF calculation.
Toggle for enabling/disabling the module.
Application:
Use alongside Delta Volume to assess buying and selling pressure.
Above chart snapshot, in addition to the well-known CMF indicator, the Volume and Price indicator and the EMA Hierarchy Scoring can also be seen in the chart. By enabling the CMF evaluation, you can observe both how the CMF is analyzed and how it aligns with the price chart.
4. Delta Volume:
Purpose:
Captures the balance between buying and selling activity in the market.
Visualization:
A histogram represents the raw divergence in buying and selling strength.
Signal lines help identify momentum shifts.
Settings:
Options to set lower timeframes for more granular analysis.
Adjustable smoothing and signal periods.
Application:
Combine with CMF for a deeper understanding of capital flow dynamics.
In the above chart, alongside the Volume Delta indicator, you can observe our evaluation of this indicator's performance.
In the above chart, as explained, you can observe the impact of our evaluation metrics both individually and in combination with other indicators. This chart featuring VPR (Volume and Price Indicator along with EMA Hierarchy Scoring) illustrates the interplay between CMF and Volume Delta.
5. Volume Hierarchy Score (VOL):
Purpose:
Tracks raw volume data to identify areas of heightened market activity.
Visualization:
Histogram and smoothed lines highlight volume trends.
Settings:
Prime-numbered EMA periods to analyze volume hierarchy.
Adjustable smoothing and signal line parameters.
In the above chart, as previously explained, by analyzing the EMA of volume data over 25 iterations within specified periods (based on the first 25 prime numbers), you can observe the relationship between volume and price. We are witnessing a price increase, while the current volume position shows significant deviation and instability relative to the EMAs calculated over 25 different time periods.
In the above chart, by simultaneously enabling the evaluation of both volume and price, you can clearly observe the interplay and impact of volume and price in relation to each other.
Momentum and Trend Strength
6. Aroon Up:
Purpose:
Evaluates the strength of trends by measuring time since price highs.
Visualization :
Hierarchy scores plotted as histograms with trend-tracking smoothed and signal lines.
Settings:
Lookback period adjustments.
Module toggle for focus on Aroon trends.
If the analysis and interpretation of Aroon lines seem somewhat complex, the Volume and Price Indicator along with EMA Hierarchy Scoring provides a clear and intuitive representation of the Aroon indicator in relation to the price chart, as you can see in the current chart.
7. Average Directional Index (ADX):
Purpose:
Quantifies the strength of trends, regardless of direction.
Visualization:
ADX scores and smoothed lines for trend confirmation.
Settings:
Adjustable directional indicator (DI) and ADX smoothing periods.
Tooltip guidance for parameter optimization.
The simultaneous chart of the well-known ADX indicator alongside the evaluation system of the Volume and Price Indicator with EMA Hierarchy Scoring provides an integrated perspective on the ADX indicator.
8. Elder Force Index (EFI):
Purpose:
Combines price and volume to measure the strength of price movements.
Visualization:
EFI hierarchy scores with clear trend representation through signal and smoothed lines.
Settings:
Length adjustments for sensitivity control.
Smoothing and signal line customization.
In the above chart, we simultaneously have the well-known EFI indicator and the Volume and Price Indicator along with EMA Hierarchy Scoring. As we progress further, you will become increasingly familiar with the functionality and precision of the Volume and Price Indicator along with EMA Hierarchy Scoring.
Volatility and Oscillators
9. Ehler Fisher Transform:
Purpose:
Highlights extreme price movements by transforming price data into a Gaussian distribution.
Visualization:
Fisher Transform scores with smoothed trend indicators.
Settings:
Fisher length adjustment.
Module toggle and smoothing controls.
10. McGinley Dynamic (MGD):
Purpose:
Tracks price trends while adjusting for volatility, providing a smoother signal.
Visualization:
Raw MGD hierarchy scores with smoothed and signal lines.
Settings:
Lookback period customization.
Adjustable smoothing and signal periods
.
Ichimoku Components
11. Conversion Line (ICMC):
Purpose:
Captures short-term price equilibrium levels within the Ichimoku framework.
Visualization:
Short-term hierarchy scores visualized with smoothed lines.
Settings:
Adjustable conversion line length.
Tooltips explaining Ichimoku-related insights.
12. Base Line (ICMB):
Purpose:
Identifies medium-term equilibrium levels in the Ichimoku system.
Visualization:
Scores and smoothed trend lines for medium-term trends.
Settings:
Base line period adjustments.
Tooltip guidance for Ichimoku analysis.
In the chart below, to better illustrate the capabilities of the Volume and Price, EMA Hierarchy Scoring relation, we present a chart that evaluates the simultaneous interaction of Ichimoku Base and Conversion lines, Price, Volume, and Delta Volume.
Market Health
13. Money Flow Index (MFI):
Purpose:
Detects overbought or oversold conditions using price and volume data.
Visualization:
MFI hierarchy scores with trend tracking through smoothed and signal lines.
Settings:
Lookback period customization for sensitivity adjustment.
Module toggle and visualization controls.
EMA of Indicators: A Unified Scoring Metric
The EMA of Indicators module introduces a unique way to aggregate and analyze the individual scores of all 13 indicators. By applying a unified EMA calculation to their hierarchy scores, this module provides a single, combined metric that reflects the overall market sentiment based on the collective behavior of all indicators.
How It Works
1. Indicator-Specific EMAs:
An EMA is calculated for each of the 13 indicator hierarchy scores. The EMA period is adjustable in the settings menu, allowing traders to control how responsive the metric is to recent changes.
2. Combined EMA Calculation:
The individual EMAs are summed and averaged to generate a single Combined EMA Value. This value represents the average performance and alignment of all the indicators.
3. Smoothed and Signal Lines:
To enhance the interpretability of the Combined EMA Value:
- A Smoothed EMA is calculated using an additional EMA to filter out short-term fluctuations.
- A Signal Line is applied to the Smoothed EMA, providing actionable signals when crossovers occur.
Visualization
The Combined EMA Value is visualized as:
Histogram Bars: Represent the raw Combined EMA Value, highlighting positive or negative market alignment.
Smoothed Line: Tracks longer-term trends by smoothing the combined value.
Signal Line: Marks potential shifts in market sentiment when it crosses the Smoothed Line.
Customization and Settings
The settings menu allows full control over the EMA calculation:
Enable/Disable Module: Toggle the entire EMA of Indicators functionality.
Adjust EMA Period: Define the responsiveness of the individual indicator EMAs.
Set Smoothing Period: Control the degree of smoothing applied to the combined score.
Signal Line Period: Fine-tune the signal line's sensitivity for detecting trend shifts.
Tooltips accompany each parameter, ensuring that users understand their impact on the final visualization.
Applications in Market Analysis
1. Market Health Overview:
Use the Combined EMA Value as a quick snapshot of overall market sentiment based on all 13 indicators.
2. Trend Confirmation:
Analyze crossovers between the Smoothed EMA and Signal Line to confirm market trends or reversals.
3. Flexible Strategy Development:
Adjust EMA and smoothing periods to align the module with short-term or long-term trading strategies.
From EMA Scoring to Divergence-Weighted Insights
While the EMA scoring system provides insights into individual indicators and their trends, the Divergence-Weighted Volatility Adjusted Score takes this analysis further by combining and comparing all 13 indicators into a unified metric.
The Divergence-Weighted Volatility Adjusted Score
This score evaluates how the EMA scores of the 13 indicators interact and diverge, adding a layer of context and collective behavior analysis to the raw hierarchy scores.
1. Normalization:
All EMA scores are scaled to a common range, ensuring comparability regardless of the magnitude of individual indicators.
2. Divergence Analysis:
The system calculates the average score of the 13 indicators and evaluates the deviation (or divergence) of each individual score from this average.
Indicators with significant divergence are highlighted, as they often signal critical market dynamics.
3. Dynamic Weighting:
Indicators with greater divergence are assigned higher weights in the combined score. This ensures that outliers with meaningful signals are emphasized.
4. Volatility Adjustment:
The combined score is adjusted based on market volatility (calculated as the standard deviation of the score over a defined lookback period). This stabilizes the output, making it reliable even during turbulent market conditions.
Visualization and Customization
The Divergence-Weighted Volatility Adjusted Score is plotted as a dynamic line chart, offering a clear visual summary of the collective behavior of all indicators. The chart includes:
Smoothed Score Line: Filters out noise and emphasizes longer-term trends.
Signal Line: Helps identify potential trend shifts by tracking smoothed score crossovers.
Settings:
Lookback Period: Defines the time frame for volatility calculation.
Smoothing Period: Controls the degree of noise reduction in the smoothed score line.
Signal Line Period: Adjusts the responsiveness of the signal line.
These settings are fully adjustable, with tooltips guiding users to understand their impact.
Applications
The Divergence-Weighted Volatility Adjusted Score has several practical applications:
1. Cross-Indicator Alignment:
Detect when multiple indicators align or diverge, signaling potential opportunities or risks.
2. Dynamic Market Insights:
Adapt to changing conditions with the volatility-adjusted scoring.
3. Trend Confirmation:
Use smoothed and signal lines to validate trends identified by individual indicators.
Conclusion
The Volume and Price, EMA Hierarchy Scoring Indicator redefines how traders analyze financial markets. By combining 13 widely used technical tools with a structured scoring system based on Exponential Moving Averages (EMAs) and prime-numbered periods, this indicator brings depth and context to market analysis.
Key features include:
Independent Analysis: Evaluate individual indicators with precise EMA hierarchy scoring to assess their alignment with market trends.
Dynamic Combinations: Explore the relationships between indicators through over 8,000 combinations to uncover nuanced interactions and patterns.
Divergence-Weighted Scoring: Compare the collective behavior of indicators using a divergence-weighted system, providing a holistic market perspective adjusted for volatility.
Customization: Enable or disable modules, adjust smoothing and signal periods, and fine-tune settings to align the indicator with specific trading strategies.
User-Friendly Visualizations: Intuitive histograms, smoothed lines, and signal lines help traders identify trends, reversals, and market alignment at a glance.
This indicator empowers traders to move beyond isolated analysis by creating meaning and context between known tools. Whether you’re a scalper seeking short-term trends or a swing trader analyzing broader market movements, the Volume and Price, EMA Hierarchy Scoring Indicator offers insights tailored to your strategy.
Disclaimer
The Volume and Price, EMA Hierarchy Scoring Indicator is a tool for technical analysis and market evaluation. While it provides structured insights into market behavior, no indicator can guarantee success or eliminate the inherent risks of trading. Market conditions are complex, and multiple factors influence price movements.
Users are advised to:
Combine this indicator with other analysis methods, such as fundamental analysis or risk management strategies.
Make informed decisions based on their own analysis, trading goals, and risk tolerance.
Trading involves significant risk, and past performance does not guarantee future results. Always consult with a financial advisor or professional before making trading decisions.
NYSE, Euronext, and Shanghai Stock Exchange Hours IndicatorNYSE, Euronext, and Shanghai Stock Exchange Hours Indicator
This script is designed to enhance your trading experience by visually marking the opening and closing hours of major global stock exchanges: the New York Stock Exchange (NYSE), Euronext, and Shanghai Stock Exchange. By adding vertical lines and background fills during trading sessions, it helps traders quickly identify these critical periods, potentially informing better trading decisions.
Features of This Indicator:
NYSE, Euronext, and Shanghai Stock Exchange Hours: Displays vertical lines at market open and close times for these three exchanges. You can easily switch between showing or hiding the different exchanges to customize the indicator for your needs.
Background Fill: Highlights the trading hours of these exchanges using faint background colors, making it easy to spot when markets are in session. This feature is crucial for timing trades around overlapping trading hours and volume peaks.
Customizable Visuals: Adjust the color, line style (solid, dotted, dashed), and line width to match your preferences, making the indicator both functional and visually aligned with your chart's aesthetics.
How to Use the Indicator:
Add the Indicator to Your Chart: Add the script to your chart from the TradingView script library. Once added, the indicator will automatically plot vertical lines at the opening and closing times of the NYSE, Euronext, and Shanghai Stock Exchange.
Customize Display Settings: Choose which exchanges to display by enabling or disabling the NYSE, Euronext, or Shanghai sessions in the indicator settings. This allows you to focus only on the exchanges that are relevant to your trading strategy.
Adjust Visual Properties: Customize the appearance of the vertical lines and background fill through the settings. Modify the color of each exchange, adjust the line style (solid, dotted, dashed), and control the line thickness to suit your chart preferences. The background fill can also be customized to clearly highlight active trading sessions.
Identify Key Market Hours: Use the vertical lines and background fills to identify the market open and close times. This is particularly useful for understanding how price action changes during specific trading hours or for finding high liquidity periods when multiple markets are open simultaneously.
Adapt Trading Strategies: By knowing when major stock exchanges are open, you can adapt your trading strategy to take advantage of potential price movements, increased volatility, or volume. This can help you avoid low-liquidity times and capitalize on more active trading periods.
This indicator is especially valuable for traders focusing on cross-market dynamics or those interested in understanding how different sessions influence market liquidity and price action. With this tool, you can gain insight into market conditions and adapt your trading strategies accordingly. The clean visual separation of session times helps you maintain context, whether you're trading Forex, stocks, or cryptocurrencies.
Disclaimer: This script is intended for informational and educational purposes only. It does not constitute financial advice or a recommendation to buy or sell any financial instrument. Always conduct your own research and consult with a licensed financial advisor before making any trading decisions. Trading involves risk, and past performance is not indicative of future results.
Bullseye NYSE 1st5mThis script, "BullseyeNYSE1st5m," is a TradingView indicator designed to highlight the high and low price levels during the first 5 minutes of the NYSE trading session. It works as follows:
1. **Identify NYSE Trading Hours**: The script identifies bars that fall within NYSE trading hours, specifically focusing on the first five minutes after the market opens.
2. **Calculate First 5-Minute High and Low**: During the first five minutes of the trading day, the script captures and updates the high and low prices, storing these values for the remainder of the session.
3. **Plot High and Low Levels**: The high and low values from the first five minutes are plotted as lines on the chart in yellow. This helps traders quickly identify the initial range set by the market.
4. **Fill the Area Between High and Low**: The area between the high and low levels is filled with a translucent yellow color to visually emphasize the first five-minute range.
5. **Alerts for Breakouts**: Alerts are set to notify the user when the price closes above or below the first five-minute range. This helps traders stay informed of potential breakout opportunities beyond this key opening range.
This indicator is useful for day traders looking to leverage the first few minutes of NYSE trading to identify early support and resistance levels and to spot breakout opportunities.
Breadth Indicators NYSE Percent Above Moving AverageBreadth Indicators NYSE - transmits the processed data from the Barchart provider
NYSE - Breadth Indicators
S&P 500 - Breadth Indicators
DOW - Breadth Indicators
RUSSEL 1000 - Breadth Indicators
RUSSEL 2000 - Breadth Indicators
RUSSEL 3000 - Breadth Indicators
Moving Average - 5, 20, 50, 100, 150, 200
The "Percentage above 50-day SMA" indicator measures the percentage of stocks in the index trading above their 50-day moving average. It is a useful tool for assessing the general state of the market and identifying overbought and oversold conditions.
One way to use the "Percentage above 50-day SMA" indicator in a trading strategy is to combine it with a long-term moving average to determine whether the trend is bullish or bearish. Another way to use it is to combine it with a short-term moving average to identify pullbacks and rebounds within the overall trend.
The purpose of using the "Percentage above 50-day SMA" indicator is to participate in a larger trend with a better risk-reward ratio. By using this indicator to identify pullbacks and bounces, you can reduce the risk of entering trades at the wrong time.
Bull Signal Recap:
150-day EMA of $SPXA50R crosses above 52.5 and remains above 47.50 to set the bullish tone.
5-day EMA of $SPXA50R moves below 40 to signal a pullback
5-day EMA of $SPXA50R moves above 50 to signal an upturn
Bear Signal Recap:
150-day EMA of $SPXA50R crosses below 47.50 and remains below 52.50 to set the bearish tone.
5-day EMA of $SPXA50R moves above 60 to signal a bounce
5-day EMA of $SPXA50R moves below 50 to signal a downturn
Tweaking
There are numerous ways to tweak a trading system, but chartists should avoid over-optimizing the indicator settings. In other words, don't attempt to find the perfect moving average period or crossover level. Perfection is unattainable when developing a system or trading the markets. It is important to keep the system logical and focus tweaks on other aspects, such as the actual price chart of the underlying security.
What do levels above and below 50% signify in the long-term moving average?
A move above 52.5% is deemed bullish, and below 47.5% is deemed bearish. These levels help to reduce whipsaws by using buffers for bullish and bearish thresholds.
How does the short-term moving average work to identify pullbacks or bounces?
When using a 5-day EMA, a move below 40 signals a pullback, and a move above 60 signals a bounce.
How is the reversal of pullback or bounce identified?
A move back above 50 after a pullback or below 50 after a bounce signals that the respective trend may be resuming.
How can you ensure that the uptrend has resumed?
It’s important to wait for the surge above 50 to ensure the uptrend has resumed, signaling improved breadth.
Can the system be tweaked to optimize indicator settings?
While there are various ways to tweak the system, seeking perfection through over-optimizing settings is advised against. It's crucial to keep the system logical and focus tweaks on the price chart of the underlying security.
RUSSIAN \ Русская версия.
Индикатор "Процент выше 50-дневной скользящей средней" измеряет процент акций, торгующихся в индексе выше их 50-дневной скользящей средней. Это полезный инструмент для оценки общего состояния рынка и выявления условий перекупленности и перепроданности.
Один из способов использования индикатора "Процент выше 50-дневной скользящей средней" в торговой стратегии - это объединить его с долгосрочной скользящей средней, чтобы определить, является ли тренд бычьим или медвежьим. Другой способ использовать его - объединить с краткосрочной скользящей средней, чтобы выявить откаты и отскоки в рамках общего тренда.
Цель использования индикатора "Процент выше 50-дневной скользящей средней" - участвовать в более широком тренде с лучшим соотношением риска и прибыли. Используя этот индикатор для выявления откатов и отскоков, вы можете снизить риск входа в сделки в неподходящее время.
Краткое описание бычьего сигнала:
150-дневная ЕМА на уровне $SPXA50R пересекает отметку 52,5 и остается выше 47,50, что задает бычий настрой.
5-дневная ЕМА на уровне $SPXA50R опускается ниже 40, сигнализируя об откате
5-дневная ЕМА на уровне $SPXA50R поднимается выше 50, сигнализируя о росте
Обзор медвежьих сигналов:
150-дневная ЕМА на уровне $SPXA50R пересекает уровень ниже 47,50 и остается ниже 52,50, что указывает на медвежий настрой.
5-дневная ЕМА на уровне $SPXA50R поднимается выше 60, сигнализируя о отскоке
5-дневная ЕМА на уровне $SPXA50 опускается ниже 50, что сигнализирует о спаде
Корректировка
Существует множество способов настроить торговую систему, но графологам следует избегать чрезмерной оптимизации настроек индикатора. Другими словами, не пытайтесь найти идеальный период скользящей средней или уровень пересечения. Совершенство недостижимо при разработке системы или торговле на рынках. Важно поддерживать логику системы и уделять особое внимание другим аспектам, таким как график фактической цены базовой ценной бумаги.
Что означают уровни выше и ниже 50% в долгосрочной скользящей средней?
Движение выше 52,5% считается бычьим, а ниже 47,5% - медвежьим. Эти уровни помогают снизить риски, используя буферы для бычьих и медвежьих порогов.
Как краткосрочная скользящая средняя помогает идентифицировать откаты или отскоки?
При использовании 5-дневной ЕМА движение ниже 40 указывает на откат, а движение выше 60 указывает на отскок.
Как определяется разворот отката или отскока?
Движение выше 50 после отката или ниже 50 после отскока сигнализирует о возможном возобновлении соответствующего тренда.
Как вы можете гарантировать, что восходящий тренд возобновился?
Важно дождаться скачка выше 50, чтобы убедиться в возобновлении восходящего тренда, сигнализирующего о расширении диапазона.
Можно ли настроить систему для оптимизации настроек индикатора?
Хотя существуют различные способы настройки системы, не рекомендуется стремиться к совершенству с помощью чрезмерной оптимизации настроек. Крайне важно сохранить логичность системы и сфокусировать изменения на ценовом графике базовой ценной бумаги.
NYSE TickThe NYSE Tick indicator is a market breadth indicator used to determine short-term bullish or bearish market sentiment. The NYSE Tick index compares the number of stocks on the New York Stock Exchange that are ticking up to the number of stocks ticking down at a specific moment in time. When the NYSE Tick is hovering around the zero line, roughly the same number of stocks are ticking up as are ticking down. When the overall market is rising it will usually present on the NYSE Tick as a rise in value that will generally stay mostly above the zero line for a period of time. The opposite is true when the general market is falling and can be seen as the NYSE Tick staying mostly below the zero line. This information can be very helpful for a short-term day trader who trades a market that also follows many of these same stocks, like the E-Mini S&P 500 Futures (ES), for example. While the index can theoretically rise or fall to over ±2,000 if all stocks on the NYSE are ticking up or down at the same time, it’s generally considered an extreme movement if the NYSE Tick is ±1,000. For this reason, the indicator has default reference lines at ±1,000 and halfway marks at ±500. In order to partially smooth out the movement and make movement trends more easily read, the indicator plots the values using Heikin Ashi candles instead of the standard bars or candlesticks. The price-line value displayed is an accurate live value, however, rather than the OHLC average value of a standard Heikin Ashi candle. Since the standard hours for the NYSE are Monday – Friday, 09:30 – 16:00 EST, the indicator only plots bars during this time.
Enhanced McClellan Summation Index
The Enhanced McClellan Summation Index (MSI) is a comprehensive tool that transforms the MSI indicator with Heikin-Ashi visualization, offering improved trend analysis and momentum insights. This indicator includes MACD and it's histogram calculations to refine trend signals, minimize false positives and offer additional momentum analysis.
Methodology:
McClellan Summation Index (MSI) -
The MSI begins by calculating the ratio between advancing and declining issues in the specified index.
float decl = 𝘐𝘯𝘥𝘪𝘤𝘦 𝘥𝘦𝘤𝘭𝘪𝘯𝘪𝘯𝘨 𝘪𝘴𝘴𝘶𝘦𝘴
float adv = 𝘐𝘯𝘥𝘪𝘤𝘦 𝘢𝘥𝘷𝘢𝘯𝘤𝘪𝘯𝘨 𝘪𝘴𝘴𝘶𝘦𝘴
float ratio = (adv - decl) / (adv + decl)
It then computes a cumulative sum of the MACD (the difference between a 19-period EMA and a 39-period EMA) of this ratio. The result is a smoothed indicator reflecting market breadth and momentum.
macd(float r) =>
ta.ema(r, 19) - ta.ema(r, 39)
float msi = ta.cum(macd(ratio))
Heikin-Ashi Transformation -
Heikin-Ashi is a technique that uses a modified candlestick formula to create a smoother representation of price action. It averages the open, close, high, and low prices of the current and previous periods. This transformation reduces noise and provides a clearer view of trends.
type bar
float o = open
float h = high
float l = low
float c = close
bar b = bar.new()
float ha_close = math.avg(b.o, b.h, b.l, b.c)
MACD and Histogram -
The Enhanced MSI incorporates MACD and histogram calculations to provide additional momentum analysis and refine trend signals. The MACD represents the difference between the 12-period EMA and the 26-period EMA of the MSI. The histogram is the visual representation of the difference between the MACD and its signal line.
Options:
Index Selection - Choose from TVC:NYA , NASDAQ:NDX , or TVC:XAX to tailor the MSI-HA to the desired market index.
MACD Settings - Adjust the parameters for the MACD calculation to fine-tune the indicator's responsiveness.
Ratio Multiplier - Apply scaling to the MSI to suit different market conditions and indices.
Benefits of Heikin-Ashi -
Smoothed Trends - Heikin-Ashi reduces market noise, providing a more apparent and smoothed representation of trends.
Clearer Patterns - Candlestick patterns are more distinct, aiding in the identification of trend reversals and continuations.
Utility and Use Cases:
Trend & Momentum Analysis - Utilize the tool's Heikin-Ashi visualization for clearer trend identification in confluence with it's MACD and histogram to gain additional insights into the strength and direction of trends, while filtering out potential false positives.
Breadth Analysis - Explore market breadth through the MSI's cumulative breadth indicator, gauging the overall health and strength of the underlying market.
- Alerts Setup Guide -
The Enhanced MSI is a robust indicator that combines the breadth analysis of the McClellan Summation Index with the clarity of Heikin-Ashi visualization and additional momentum insights from MACD and histogram calculations. Its customization options make it adaptable to various indices and market conditions, offering traders a comprehensive tool for trend and momentum analysis.
Tick Weighted Average Price %BTick Weighted Average Price %B
"TiWAP %B" is an indicator that tracks the NYSE TICK by default and plots price location in relation to the tick weighted average price based only off of extreme TICK movement. NASDAQ TICK is also supported and future updates may add others if they provide value, or if requested.
This utilizes same calculation as TiWAP indicator already published, but removes the need to have it overlaying price to keep things tidy :)
What makes this different?
Quite simply there isn't another indicator that plots weighted average price based on TICK movement as done here, this is showing the correlation between the entire markets volatile price movement and the charted security. It provides a sense of established fair value given the entire NYSE/NASDAQ, given the automated nature of the markets there's a strong correlation between highly liquid ETFs/Indexes and the whole market.
How to use
As price is affected by NYSE the study will reveal location of price as it relates to TiWAP, use location to find reversals from rejections or bounces of standard deviations.
As price is affected by market volatility look to see the weighted price adjust to actual price and combine with other trading strategies to take advantage of the data. Rejections and bounces near standard deviations as well as the weighted average price line can provide excellent trade setups, or they could be utilized in advanced options strategies such as straddles, strangles, iron condors, etc.
Anchor points can be utilized to track how the market is adjusting broad value for the week, month, quarter, etc. The higher timeframe based anchor points will need higher periods for the chart or a max bars lookback error may occur.
Sensitivity should be adjusted as changes in TICK occur, this is commonly correlated with NYSE adjustments but the tooltip provides some guidance on value selection based on current conventional wisdom.
Show Target Level Relation
Turn on "Show Target Level Relation" to observe how current price is moving in relation to previous TiWAP range. For example if %B is configured for session, enabling this feature will reveal price rejecting and reclaim aspects of previous session %B range, works on any anchorage selected so long as resolution permits.
Fill %B As Cloud
By special request, this will render %B as a sentiment cloud which will aid in quick review of price to TiWAP relation being in buy side or sell side ranges, use this to easily spot exhaustion or continuation.
Markets
TICK tracks the entire market and as such whatever the entire market is doing will most likely apply to any individual security charted so give this a shot with anything you trade and let me know your results :)
Usage Conditions
Currently I'm finding the most success with this weighted average price on various intra-day timeframes, but anchored on weekly or higher and utilizing other timeframes may net some interesting swing trading opportunities.
Special thanks to MrChach for the original idea as well as discussions and debugging sessions :)
Short Term IndeXThe Short-Term Index (STIX) is a simple market indicator designed to assess short-term overbought or oversold conditions in the stock market. Leveraging a combination of advancing and declining issues, STIX provides valuable insights into market sentiment and potential reversals. To enhance its interpretability and reveal the underlying trend with greater clarity, STIX has been refined through a Heiken-Ashi transformation, ensuring a smoother representation of market dynamics.
Calculation and Methodology:
stix = ta.ema(adv / (adv + dec) * 100, len)
STIX is calculated by dividing the difference between the sum of advancing issues (ADV) by the total number of issues traded (ADV + DEC). This quotient is multiplied by 100 to express the result as a percentage. The STIX index ranges from 0 to 100, where extreme values indicate potential overbought (mainly above 60) or oversold (mainly below 40) market conditions.
Heiken-Ashi Transformation:
By applying a Heiken-Ashi transformation to STIX, the indicator gains improved visual clarity and noise reduction. This transformation enhances the ability to identify trend shifts and potential reversal points, making it an even more valuable tool for traders and investors.
Utility and Use Cases:
-The Short-Term Index (STIX) offers a range of practical applications-
1. Overbought/Oversold Conditions: STIX provides a clear indication of short-term overbought or oversold conditions, helping traders anticipate potential market reversals.
2. Reversal Points: STIX can help pinpoint potential reversal points in short-term market trends, providing traders with opportunities to enter or exit positions.
3. Trend Analysis: By observing STIX values over time, traders can assess the strength and sustainability of short-term trends, aiding in trend-following strategies.
The Short-Term Index (STIX), enhanced by its Heiken-Ashi transformation, equips traders and investors with a tool for assessing short-term market conditions, confirming price movements, and identifying potential reversal points. Its robust methodology and refined presentation contribute to a more comprehensive understanding of short-term market dynamics, enabling traders to make well-informed trading decisions.
See Also:
- Other Market Breadth Indicators-
Bolton-Tremblay IndexThe Bolton-Tremblay Index (BOLTR) is a dynamic cumulative advance-decline indicator which incorporates the count of unchanged issues as a fundamental element. This index serves as a valuable tool for identifying shifts in market trends and gauging the overall strength or weakness of the market. To enhance its effectiveness and reveal underlying trends, BOLTR has been refined through a Heiken-Ashi transformation, resulting in a smoother and more insightful representation.
Calculation and Methodology:
r = (adv - dec) / unch
var float bt = na
bt := r > 0 ? nz(bt ) + math.sqrt(math.abs(r)) : nz(bt ) - math.sqrt(math.abs(r))
The BOLTR index is derived from a calculation involving three essential components: advancing issues (ADV), declining issues (DEC), and securities with unchanged closing prices (UNC). By formulating the ratio (ADV - DEC) / UNC, BOLTR captures the relationship between market movements and unchanged securities. This ratio then dictates whether the BOLTR index increases or decreases in the following period. If the ratio is positive, the index advances, and if negative, it retreats. This iterative process yields a cumulative index that reflects the evolving dynamics of market trends.
Heiken-Ashi Transformation:
The addition of a Heiken-Ashi transformation imparts a smoothing effect to the BOLTR index, revealing the underlying trend with greater clarity. This transformation diminishes noise and fluctuations, making it easier to identify meaningful shifts in market sentiment and overall market health.
Utility and Use Cases:
-The Bolton-Tremblay Index offers a range of applications that contribute to informed decision-making-
1. Trend Analysis: BOLTR provides insights into the changing trends of the market, helping traders and investors identify potential shifts in market sentiment.
2. Market Strength Assessment: By considering advancing, declining, and unchanged issues, BOLTR offers a comprehensive assessment of market strength and potential weaknesses.
3. Divergences: Traders can use BOLTR to detect divergences between price movements and the cumulative advance-decline dynamics, potentially signaling shifts in market direction.
The Bolton-Tremblay Index offers a versatile toolset for interpreting market trends, evaluating market health, and making better informed trading decisions.
See Also:
- Other Market Breadth Indicators-
Above/Below Average Index US Top 40 [Pt]█ Introduction
Introducing the "Above/Below Average Index US Top 40 ", a comprehensive market sentiment visualization tool. This powerful and easy-to-use indicator allows users to get a direct measure of market sentiment by analyzing the status of a chosen group of stocks (Top 10, Top 20, Top 30, or Top 40) in relation to their chosen moving average. The sum of stocks either above or below their respective moving averages can be an insightful indicator of the market's overall trend and bias.
The power of this tool lies in its ability to measure the net number of these top stocks either above or below their respective moving averages. A positive value, represented by green histogram bars, signifies a bullish bias among the Top 40 stocks, while a negative value, displayed as red histogram bars, suggests a bearish sentiment.
The indicator can be applied to both the NYSE and NASDAQ markets, offering users the flexibility to select their preferred stock exchange. The Top 40 stocks within these markets are customizable, ensuring you have full control over which companies are included in your market sentiment analysis.
The indicator also includes dual moving average lines representing the fast and slow moving averages of the sum of stocks above or below their chosen moving average. These lines serve as an invaluable trend analysis resource, providing a visual representation of short-term and long-term market trends, as well as potential trend reversals
█ Potential Uses
The indicator presents numerous application possibilities. Here are a few ways this tool can be utilized:
► Market Sentiment Gauge: Depending on the number of stocks chosen (Top 10, 20, 30, or 40), this tool can offer a broad or more focused gauge of overall market sentiment. A high positive value suggests strong bullish sentiment, while a high negative value can indicate bearish sentiment.
► Identification of Market Trends: By looking at the colors of the histogram bars and their corresponding values, users can identify whether the overall market trend is bullish (green) or bearish (red).
► Trend Confirmation and Reversal Identification: The dual moving average lines offer a powerful way to confirm market trends and identify potential trend reversals. For instance, a crossover of these lines (when the fast moving average line crosses the slow line) can signal a shift in market momentum, often indicating a possible trend reversal. Also, to confirm a bullish trend, for example, the fast moving average should be above the slow moving average line.
► Comparison of Different Markets: By switching between NYSE and NASDAQ, users can compare market sentiments across the two major stock exchanges. This could potentially highlight divergences or confirm similarities in market behavior.
► Customized Analysis: With the ability to customize the Top 40 stocks used in the calculation, users can refine their analysis to focus on the sectors or industries they are most interested in.
Remember, while this tool provides a visual representation of market sentiment, it is important to use it in conjunction with other forms of analysis to make informed trading decisions.
=====================================================================================================
█ Setting Highlights
Moving Average Type options:
◊ Simple Moving Average (SMA): The SMA is the average stock price over a certain period and gives equal weight to all price points, providing a clear view of overall trends but responding slower to recent price changes.
◊ Exponential Moving Average (EMA): The EMA gives more weight to recent prices and responds quicker to price changes than the SMA, making it more suitable for traders looking to capture short-term trends.
◊ Smoothed Moving Average (SMMA/RMA): The SMMA or RMA minimizes the impact of random price spikes and smoothens out the data, offering a balanced view of long-term and short-term trends.
◊ Weighted Moving Average (WMA): The WMA assigns more weight to recent data points, offering a faster response to recent price changes than SMA but slower than EMA.
◊ Volume Weighted Moving Average (VWMA): The VWMA takes into account both the closing price and volume of the stocks, offering insights into both price movement and trading activity.
◊ Hull Moving Average (HMA): The HMA is designed to reduce lag and improve smoothness, providing faster signals for trend changes, which is ideal for traders looking for quick entry and exit points.
Tick Weighted Average PriceTick Weighted Average Price
"TiWAP" is an indicator that tracks the NYSE TICK by default and plots weighted average price on the charted security based only off of extreme TICK movement. NASDAQ TICK is also supported and future updates may add others if they provide value, or if requested.
What makes this different?
Quite simply there isn't another indicator that plots weighted average price based on TICK movement as done here, this is showing the correlation between the entire markets volatile price movement and the charted security. It provides a sense of established fair value given the entire NYSE/NASDAQ, given the automated nature of the markets there's a strong correlation between highly liquid ETFs/Indexes and the whole market.
How to use
Using this is similar to volume or time weighted average price, there is the average price line that is only adjusted when TICK movement breaches configured thresholds via sensitivity. Standard deviation bands are calculated and can be enabled up to 3rd deviation as per standard configuration, the further deviations being broken can serve as valuable signals for reversals.
As price is affected by market volatility look to see the weighted price adjust to actual price and combine with other trading strategies to take advantage of the data. Rejections and bounces near standard deviations as well as the weighted average price line can provide excellent trade setups, or they could be utilized in advanced options strategies such as straddles, strangles, iron condors, etc.
Anchor points can be utilized to track how the market is adjusting broad value for the week, month, quarter, etc. The higher timeframe based anchor points will need higher periods for the chart or a max bars lookback error may occur.
Sensitivity should be adjusted as changes in TICK occur, this is commonly correlated with NYSE adjustments but the tooltip provides some guidance on value selection based on current conventional wisdom.
Markets
TICK tracks the entire market and as such whatever the entire market is doing will most likely apply to any individual security charted so give this a shot with anything you trade and let me know your results :)
Usage Conditions
Currently I'm finding the most success with this weighted average price on various intra-day timeframes, but anchored on weekly or higher and utilizing other timeframes may net some interesting swing trading opportunities.
Tick LevelsTick Levels
This indicator is designed to be a companion to "MIT" .
It tracks the NYSE TICK by default and plots key levels on the charted security based off of extreme TICK movement. NASDAQ TICK is also supported and future updates may add others if they provide value, or if requested.
What makes this different?
Quite simply there isn't another indicator that plots levels based on TICK as done here, the signal and proximity sensing features added give context to which levels may provide the best entries, trims and exits for day traders.
How to use
Ensure adjustments are set for TICK, it changes over time but currently I've found the defaults to be best suited for me - your results may vary.
Watch price around the tick levels plotted on the chart to combine with other trading strategies. Use the proximity tolerance setting to ensure multiple TICK movements within the region as other movements are combined to lessen any possible noise, or disable this feature if each individual line is desired, though be warned extremely volatile days may produce noise.
Currently, the tick levels are reset on first new bar on regular sessions, but perhaps a future update will allow past sessions lines to stay with setting adjustment.
Diamonds above or below candles signify extreme highs and lows of TICK respectively, and triangles above or below candles signify extreme closures of TICK - if you're using this indicator in combination with "MIT" it may be redundant and you can disable the signals should you so choose.
Markets
TICK tracks the entire market and as such whatever the entire market is doing will most likely apply to any individual security charted so give this a shot with anything you trade and let me know your results :)
Usage Conditions
Currently I'm finding the most success with these levels on various intra-day timeframes, the more fine grained the more levels you can expect potentially but at key areas.
Market Internal TrendMIT - Market Internal Trend
I've developed what I consider to be the best market internals, market breadth indicator on Trading View to date :)
Market internals (sometimes referred to as Market Breadth) are built-in indicators of the market, there are the following main indicators:
TICK - Uptick or downtick transaction of market (NYSE/NASDAQ)
ADD - Advancing or declining issues/stocks of the market
VOLD - Up volume or down volume of the issues/stocks of the market
TRIN - Trend of market based on ADD and VOLD
VIX - Volatility of the market
PCN - Options market puts vs calls
What makes this different?
This single compact indicator delivers an "eyes on glass" style presentation to detail extreme movements of TICK, sentiment analysis of ADD and VOLD as well as their trends and report when the market is most likely balanced or an in imbalance. No need to study multiple clouds and amassing a ton of different charts all with similar indicator setups and candle analysis in the heat of the moment.
Use this to determine the overall initial trend at open, watching for imbalance and extreme movement on TICK as a signal to prepare for potential trades. The metrics table is useful to see where potential rejections/bounces may occur on the volatility index.
Extreme tick closures (see below) can provide excellent trim or exit signals for existing trades depending on the market structure of the day (trending or ranging).
How To Use
The main histogram represents the highs and lows of TICK, anything within the +/- $500 region is most likely normal movement while anything outside of that will brighten in color and indicates potential larger reactions. Extreme highs and lows will be represented by white diamonds by default, closures are indicated by bright colored crosses at $0. Price levels should be noted on the securities being traded during TICK extreme movement, these usually act as dynamic support and resistance from my observations but your results may vary (please share in comments your experiences!).
There is a smoothed trend line over the histogram, by default it's white in color, and this represents simply a trend of TICK closures - when it's trending down the market should be following in kind and vice versa; adjust the smoothing length in settings to suit your trading style.
The center line will have colored dots, by default yellow for balanced markets or white for imbalanced markets. When the market is in an imbalance that's when trending moves have been observed and balanced markets are usually choppy with sideways price action not suitable for quick scalp type trading styles.
The upper colored band represents the market overall advancing or declining issues/stocks within the market, by default green tones are bullish for a advancing market and red tones represent bearish market - the brighter the tone the strong the sentiment. There are triangles at all times above this band and that represents a smoothed trend status as compared to the current amount of stocks in advance or decline, if the smoothed trend is above then it's potentially a signal of reversal (red triangles over green band would be bearish reversal and vice versa).
The lower colored band works the exact same as the upper band but it tracks the up and down volume of the issues/stocks within the market, it utilizes the same color and triangle logics as the upper band.
Markets
Currently this will present internals data for NYSE and NASDAQ, I'm still researching other markets internals and their particulars.
The signals on this indicator will best apply to SPY, QQQ, ES, NQ or highly liquid ETFs largely affected by NYSE or NASDAQ - individual stocks may have mixed results depending on how they're moving with major indexes so keep that in mind when watching for sympathy moves with the indicator.
Usage Conditions
All of the market internals are fantastic indicators when day trading, I've had great success on 1-15 minute and even higher for scalps or intra-day swings. Observing the middle dots will save those of you that struggle in choppy markets from being too aggressive when opportunities don't exist.
Use the triangles, diamonds, dots and crosses to your advantage to manage your scalps and intra-day swings, or gain an edge in preparation for entering trades!
I hope this indicator is a benefit to all for day trading, provide any feedback or feature requests in the comments.
Market Breadth Ratio+ [Pt]This is a + version of my original Market Breadth Ratio Indicator
DESCRIPTION
The Market Breadth Ratio+ indicator is a tool that can help traders gain a more comprehensive understanding of market breadth by providing a ratio between Up volume (UVOL) and Down volume (DVOL).
While the VOLD indicator provides a straightforward measure of the difference between UVOL and DVOL, it doesn't account for the rate of change. The Market Breadth Ratio+ indicator, on the other hand, takes the rate of change into account, providing a plot line that is easier to interpret and understand.
The Up Volume vs Down Volume Ratios measure the strength of buying versus selling pressure in the market. A ratio greater than 1 indicates that there is more buying pressure, while a ratio less than -1 indicates more selling pressure. The ratio is calculated by dividing the total volume of stocks that closed up on the day by the total volume of stocks that closed down.
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This script includes the following premium unique features.
1) Custom Moving Average line for Breadth Ratio line. There are a few MA type to choose from: SMA, EMA, RMA, WMA, VWMA, HMA
- This feature provide a smoother plot for better interpretation of the market trend
- MA crossovers can also be used as trend reversal signals
2) Breadth Strength Index (BSI)
- This graph shows the relative strength of the Breadth Ratio. This is a momentum based oscillator that measure the rate of change of the Breadth Ratio. It shows the strength and weakness in the Breadth Ratio plot.
- A bar close to 1 means the market is very strong in the Bullish direction, conversely, a bar close to -1 means the market is very weak, but very strong in the Bearish direction
- Above 0 shows Bullish strength
- Below 0 shows Bearish strength
3) Two display modes for Breadth Strength Index
- Histogram
- Line
- These can be combined to show different markets together, such as NYSE and NASDAQ
4) Custom Moving Average can be applied to the BSI
- This will provide smoother graph for easier interpretation
5) Aggregated Market Strength
- This feature combines the BSI of multiple markets, such as NYSE and NASDAQ, to provide a more comprehensive view of the overall US market. Often time, one of these indices will have a stronger 'pull' on the entire market. By observing the dominant color (of your choosing), you can see which index is pulling the market. And by trading the market that has the bigger pull, traders can leverage on the possible higher volatility for greater trade opportunities.
6) Custom Moving Average can be applied to the Aggregated Market Strength
- This will provide smoother graph for easier interpretation
7) Show alternating trend colors on Aggregated Market Strength
- This provides an intuitive view of the market strength that's based on market breadth ratio
Market Breadth Ratio [Pt]The Market Breadth Indicator is a technical analysis tool that provides traders and investors with valuable insights into the overall health of the stock market. This particular version of the indicator plots the Up Volume vs Down Volume Ratios for three major U.S. stock exchanges - NYSE, NASDAQ and AMEX - on a single chart.
The Up Volume vs Down Volume Ratios measure the strength of buying versus selling pressure in the market. A ratio greater than 1 indicates that there is more buying pressure, while a ratio less than -1 indicates more selling pressure. The ratio is calculated by dividing the total volume of stocks that closed up on the day by the total volume of stocks that closed down.
By plotting the Up Volume vs Down Volume Ratios for all three exchanges, the Market Breadth Indicator provides a comprehensive view of the overall market sentiment. If all three ratios are above 1, it indicates that the market is in a bullish trend, while if all three ratios are below -1, it indicates a bearish trend. A divergence between the ratios can also signal potential shifts in market sentiment.
Traders can use the Market Breadth Indicator to confirm the direction of the market and identify potential buying or selling opportunities. For example, if the market is in a bullish trend and the NYSE ratio is consistently higher than the other two ratios, it may indicate that the NYSE is leading the market and traders may want to focus on buying stocks listed on the NYSE.
Overall, the Market Breadth Indicator is a valuable tool for traders and investors to assess the overall market health and make informed trading decisions based on market sentiment.
Bonus feature: there is an option to display data for ADD for the three exchanges as well on the data table.
NYSE Market Sentiment Oscillator - Intraday w/ alertsThe ULTIMATE market sentiment indicator that combines the sentiments from the MARKET INTERNALS : $ADD ( NYSE $ADV minus $DECL ), $VOLD ( NYSE $UVOL minus $DVOL ) and $TICK ( NYSE Cumulative tick ). Sentiment is based on calculating the crossovers of moving average pairs for each of the market internals. As a result, 3 corresponding signal lines are generated + 1 combined Market Sentiment Oscillator (aka MSO) signal line.
**Important** This indicator is only meant to be used for intraday 1min-5 min timeframe only *** It may not function at higher timeframes without updating some moving average periods.
WHAT IS IT SHOWING?
Each signal lines represents the trend of the 3 market internals (TICK, ADD, VOLD). If signal line is above zero, it is in a bullish trend; below zero, bearish. The oscillating frequency of these lines are dependent on the length of moving average pairs of your choosing. A combined MSO signal line shows the combined trends of those 3 market internals, hence it represents real time market sentiment of the NYSE.
FEATURES
There are 2 display modes for this indicator:
1) On a separate pane
- in this mode, the signal lines can be toggled to oscillate along the zero line
2) On the price chart
- in this mode, the signal lines can be toggled to oscillate along the OHLC line of the price chart
- comes with Nadaraya-Watson Envelope and ATR bands
BUY/SELL SIGNALS AND STRATEGIES
By default, this indicator comes with two day trading strategies and offers long and short signals with alerts. These strategies attempts to leverage on the oscillating nature of market price movement on major NYSE indices, such as SPY, SPX, QQQ, NAS, all of which have high correlation with the market internals. However, please note that these signals offers no guarantee to profitability, so use at your own risk.
BACKGROUND COLORS SIGNIFYING TRENDS
There are options to display the background colors in 2 colors and shades.
1) Short-term sentiment
- Bright green = ADD / VOLD / TICK all in up trend
- Dimmed green = ADD / VOLD in up trend, but not TICK
- Bright red = ADD / VOLD / TICK all in down trend
- Dimmed red = ADD / VOLD in down trend, but not TICK
2) Trend Convergence
- Green = ADD / VOLD / TICK all bullish
- Red = ADD / VOLD / TICK all bearish
3) MSO
- Green = MSO bullish ( MSO signal line > 0 )
- Red = MSO bearish ( MSO signal line < 0 )
MARKET INTERNALS REAL-TIME DATA TABLE
A data table can be toggled on / off that shows the real-time sentiment and values of the three market internals. It may be useful in making quick trading decisions. The table cells are colored according to their corresponding trends.
Nasdaq or US Composite Total VolumeBecause no NASDAQ composite index or NYSE composite index provide data volume, this script intends to use the NASDAQ Composite total volume index, index ticker : TVOLQ, or the NYSE Composite total volume index, index ticker : TVOL, as a classical volume indicator on chart.
How tu use : in the input tab choose youe prefered SMA lenght and the volume' index ticker you want to display. TVOLQ for the NASDAQ Composite total volume or TVOL for the NYSE Composite total volume.
On chart, choose to display the indicator in a new pane.
Advance/Decline Line [IQ]Advance/Decline Line is a Market Breath indicator.
A/D line calculates a ratio between total number stocks advancing and total number of stocks in one day, providing another way to grasp the market breath at any moment.
We think the indicator covers the whole market, as we use data from the three main exchanges: NYSE, NASDAQ and AMEX.
The New York Stock Exchange (NYSE), nicknamed "The Big Board") is by far the world's largest stock exchange by market capitalization of its listed companies.
The Nasdaq Stock Market (NASDAQ) is ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange.
The American Stock Exchange (AMEX) is the third largest stock exchange in the U.S. after the NYSE and the NASDAQ, and handles approximately 10% of all American trades.
How to interpret it:
Green columns mean more than 50% of NASDAQ stocks are advancing, red columns mean more than 50% of NASDAQ stocks are declining.
Green values above the top band mean correlation to the upside, red values bellow the low band mean correlation to the downside.
Correlation means rising probability of capitulation (to the upside or to the downside) and is market by a white bar (as signal).
Important:
For a better interpretation, the Advance/Decline Line indicator should be used in conjunction with other indicators (volatility, volume, etc.).
Market Breadth RatiosThis indicator provides breadth ratios for various indices/exchanges based on the up/down volume.
Breadth ratios included for NYSE, NASDAQ, AMEX, DJIA, ARCA, and and average.
Very straight forward to use, if the ratios is above 2, stocks should be in uptrend, below -2 stocks should trend down. In between 2 and -2 is going to be a choppy market.
UP & DOWN VOLUMEIndicator draws UP & DOWN VOLUME for both NYSE and NASDAQ - just choose the appropriate exchange in settings.
4C NYSE Market Breadth RatioThe NYSE Market Breadth Ratio is considered by some to be the “king” of market internals. It lets you know instantly how strong current buying or selling pressure is in the broad market, to eliminate guessing or opinion.
This indicator plots the Market Breadth Ratio values for the NYSE and the NASD exchanges in real time.
It also plots the NYSE Market Breadth Ratio in a histogram plot for visual reference.
The indicator dynamically changes colors between green and red depending on whether breadth is currently positive or negative.
This indicator divides the 'Up-Volume' ("UVOL") by 'Down-Volume' ("DVOL"), for each exchange.
It can be added to any chart, but is incredibly useful when added to other sources of market internals like the NYSE Advancers/Decliners Difference (ticker ADD) or with the NYSE UVOL / DVOL Difference (ticker VOLD ).
Credit goes to author=@auron9000 as the bulk of this code was from their Breadth Ratio Bubbles indicator.
---> The changes made to their indicator include: bug fixes where the values werent properly updating; fixed indicator to be a separate plot (not chart overlay), and added the histogram plot.
