The tunnels are made by fetching the previous highest high and previous lowest low.
If current CROSS OVER the higher band and above zero line, we have a signal.
If current CROSS UNDER the lower band and below zero line, we have a signal.
The colors define the trend strength and define if current is below zero line or above zero line.
GREEN: Strong up trend.
LIGHT GREEN: Weakening up trend. (Might indicate an up reversal)
RED: Strong down trend.
Light Red: Weakening down trend. (Might indicate a down reversal)
The Trick is that trend continues until the other way signal triggers, than we change color.
Bars are not colored by default.
From a few tests it seems to work better on higher time frames - 1 hour and above.
Each asset can have its own rhythm, adjust 'Tunnels look back' period in settings to meet the asset rhythm.
Quote which i like: “Minimizing downside risk while maximizing the upside is a powerful concept.” – Mohnish Pabrai
Enjoy and like if you like. :)
Follow for up coming indicators: https://www.tradingview.com/u/dman103/#p...
Premium Pivot Points Algo Indicator: https://www.tradingview.com/script/LFBaHNuA-Pivot-Points-Algo/
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.