Economic Growth Index (XLY/XLP)Keeping an eye on the macroeconomic environment is an essential part of a successful investing and trading strategy. Piecing together and analysing its complex patterns are important to detect probable changing trends. This may seem complicated, or even better left to experts and gurus, but it’s made a whole lot easier by this indicator, the Economic Growth Index (EGI).
Common sense shows that in an expanding economy, consumers have access to cash and credit in the form of disposable income, and spend it on all sorts of goods, but mainly crap they don’t need (consumer discretionary items). Companies making these goods do well in this phase of the economy, and can charge well for their products.
Conversely, in a contracting economy, disposable income and credit dry up, so demand for consumer discretionary products slows, because people have no choice but to spend what they have on essential goods. Now, companies making staple goods do well, and keep their pricing power.
These dynamics are represented in EGI, which plots the Rate of Change of the Consumer Discretionary ETF (XLY) in relation to the Consumer Staples ETF (XLP). Put simply, green is an expanding phase of the economy, and red shrinking. The signal line is the market, a smoothed RSI of the S&P500. Run this on a Daily timeframe or higher. Check it occasionally to see where the smart money is heading.
Psychology
Mason’s Line IndicatorThe Macon Strategy is an idea conceived by Didier Darcet , co-founder of Gavekal Intelligence Software. Inspired by the Water Level, an instrument used by masons to check the horizontality or verticality of a wall. This method aims to measure the psychology of financial markets and determine if the market is balanced or tilting towards an unfavorable side, focusing on the behavioral risk of markets rather than economic or political factors.
The strategy examines the satisfaction and frustration of investors based on the distance between the low and high points of the market over a period of one year. Investor satisfaction is influenced by the current price of the index and the path taken to reach that price. The distance to the low point provides satisfaction, while the distance to the high point generates frustration. The balance between the two dictates investors’ desire to hold or sell their positions.
To refine the strategy, it is important to consider the opinion of a group of investors rather than just one individual. The members of a hypothetical investor club invest successively throughout the past year. The overall satisfaction of the market on a given day is a democratic expression of all participants.
If the overall satisfaction is below 50%, investors are frustrated and sell their positions. If it is above, they are satisfied and hold their positions. The position of the group of investors relative to the high and low points represents the position of the air bubble in the water level. Market performance is measured day by day based on participant satisfaction or dissatisfaction.
In conclusion, memory, emotions, and decision-making ability are closely linked, and their interaction influences investment decisions. The Macon Strategy highlights the importance of the behavioral dimension in understanding financial market dynamics. By studying investor behavior through this strategy, it is possible to better anticipate market trends and make more informed investment decisions.
Presentation of the Mason’s Line Indicator:
The main strategy of this indicator is to measure the average satisfaction of investors based on the position of an imaginary air bubble in a tube delimited by the market’s highs and lows over a given period. After calculating the satisfaction level, it is then normalized between 0 and 1, and a moving average can be used to visualize trends.
Key features:
Calculation of highs and lows over a user-defined period.
Determination of the position of the air bubble in the tube based on the closing price.
Calculation of the average satisfaction of investors over a selected period.
Normalization of the average satisfaction between 0 and 1.
Visualization of normalized or non-normalized average satisfaction levels, as well as their corresponding moving averages.
User parameters:
Period for min and max (days) : Sets the period over which highs and lows will be calculated (1 to 365 days).
Period for average satisfaction (days) : Determines the period over which the average satisfaction of investors will be calculated (1 to 365 days).
Period for SMA : Sets the period of the simple moving average used to smooth the data (1 to 1000 days).
Bubble_value : Adjustment of the air bubble value, ranging from 0 to 1, in increments of 0.025.
Normalized average satisfaction : Option to choose whether to display the normalized or non-normalized average satisfaction.
Please note that the Mason’s Line Indicator is not a guarantee of future market performance and should be used in conjunction with proper risk management. Always ensure that you have a thorough understanding of the indicator’s methodology and its limitations before making any investment decisions. Additionally, past performance is not indicative of future results.
Psychology: Active SharesPrice moved up either by volume (Number of trades/ News/ Buy call) or itself (Operator/ Profitability/ Future).
Every companies issued fixed number of shares. But have you figured about...
How many shares are being trades actively per day? How many shares are holding tight by shareholders for long term?
THEORY
This could be used to estimate from the percentage of number of trades per day over total number of shares company issued.
If percentage is high indicates shares are actively traded and vice versa. So we can know how many percentage of shares are hold by shareholders and not being traded.*
But Why? Why they do not trade?
1. Is it because of mass number of shares are holding by director/ institutes or
2. Most of the individual shareholders expect very high in increasing of shares price in coming future and want to hold it tight or
3. Individual shareholders are stuck in the highest price which they not willing to cut loss making number shares are paused in trades.
INTERPRETATION
High percentage of this indicator tells:
1. High active shares
2. Many people trades
Low percentage of this indicator tells:
1. Low active shares
2. More people holding the shares instead of trades
IN CONDITION:
When price is increasing, indicator shows high percentage, which mean shares are actively trades, traders can effectively moving up the price as photo below. === "GOOD TO TRADE"
When price is increasing, indicator shows low percentage, which mean operator is moving up the price with low active shares as photo below. === "GOOD TO TRADE" and "GOOD TO INVEST" if stock price is undervalue
If price do not increase, even in high percentage, which mean operator is holding the price from moving up.
If price do not increase, and percentage is low, of course stock price is not going to move.
If price decreases, percentage is high, something may wrong with profitability/ future of company. Operator is holding from moving up but lower down the price.
If price decreases, percentage is low, the same, something may wrong with profitability/ future of company. The operator moving down the price.
*it does not account for retailer trades many time per day which may double / triple up the volume making data slightly bias.
Just For Sharing ^^
Momentum Adjusted EMA TrendThe script draws a moving average which responds to trend changes extraordinary fast!
It's calculated using Momentum, Acceleration and Probability (Psychological Effect) by interfering the Golden Ratio!
I got the idea thanks to Tradingview user DGT (dgtrd) and his/her excellent descriptions.
The indicator is simplified for users and the default settings work great, so use it as you like specially as a trend indicator.
BSTtrend (and a quick note on trading psychology)Hi again :)
Script #2 for tonight, more to come :)
This one is a Pine transcription of a FXCM/LUA script called BSTrend
I used it years ago to trade index on very low timeframes with it. I'm always looking for oscillators that are more reactive than the traditional MACD. And even more reactive than the MACD Zero Lag
This is a proof of concept that Pinescript is my favorite trading programming language vs MT4/LUA/PRT. I just find it easier and the Pinescript community is helping a lot
With the BSTrend you can win but also lose. I see a lot of scripts out there but there is not a better or worst indicator. The key is HOW to use it.
In other words the key is your PSYCHOLOGY, without a rock-solid psychology, you'll end up committing a mistake even with G. himself whispering "BUY NOW", "SELL NOW" to your ears. (wait..... Do you mean this is happening only to me ????)
However, indicators help immensely in reducing the psychology pressure that we have to endure ... sometimes for days..... But better not to overcharge with dozens of indicators per chart and have a tool to detect whenever there is a confluence/convergence of your favorite indicators :) #algorithm #builder
I'll publish an educational post about next week
Those are the exact words that my mentor traders told me 6 years ago when I started trading
PS
____________________________________________________________
Be sure to hit the thumbs up as it shows me that I'm not doing this for nothing and will motivate to deliver more quality content in the future.
- I'm an officially approved PineEditor/LUA/MT4 approved mentor on codementor. You can request a coaching with me if you want and I'll teach you how to build kick-ass indicators and strategies
Jump on a 1 to 1 coaching with me
- You can also hire for a custom dev of your indicator/strategy/bot/chrome extension/python
Foreign Currency Psychological ResistanceThought it would be interesting to look into psychological barriers (round numbers) denominated in foreign currencies and see where those barriers show up on a USD chart.
I did a couple of quick and superficial Internet searches to get an idea of which USD pairs are being used the most to trade Bitcoin. My conclusion is that the most relevant currencies are the Chinese Renminbi and the Brazilian Real.
Based on that, I wrote this little indicator that uses the exchange rate from the USD pairs (USDCNY, USDBLR) and the round number targets to come up with the corresponding USD price levels.
Bitfinex Longs/Shorts [m59]This indicator diplays the total value of long positions and short positions for an asset on Bitfinex. For example, for the Bitfinex BTCUSD symbol, a value of 30000 longs means the total value of all margin long contracts on Bitfinex is 30000 BTC.
"resolve_error" is normal and expected, depending on how you're using the indicator. I use it on the BitMEX XBTUSD chart for BTC, which required the "Symbol Selection Method" option to be set to "Manual".
If there is Bitfinex long/short data available on tradingview for the symbol of your chart and you're on a Bitfinex chart or a chart with a matching symbol, "Auto" will work. Otherwise, you need to enter the symbol manually.
You can search for "Longs" or "Shorts" in the TradingView symbols to see what is available.
See the options for various ways to render this indicator to get the view you're looking for. You may also want to click the indicator's title with the downward triangle/arrow and select "Merge Up" to overlay the indicator with the price.
PRINTED VALUES
Longs Value (green) | Shorts Value (red) | Longs Percent (green) | Shorts Percent (red)
OPTIONS
- Symbol Selection Method:
- Auto: Use the current chart's symbol. Only works for pairs that have margin data available on TradingView, and only on Bitfinex charts or charts with the same pair names, i.e. ZRXETH, XMRBTC, etc)
- Manual: Enter the Bitfinex pair/symbol manually
- Manual Symbol Choice: The Bitfinex pair/symbol to use when Symbol Selection Method" is set to "Manual"
- Render Longs / Render Shorts: Rendering both longs and shorts at the same time causes both to be indiscernible due to scaling.
I suggest adding the indicator to your chart twice, then toggle off "Render Shorts" on one and toggle off "Render Longs" on the other one.
- Display Type:
- Absolute: Render the regular, absolute values of the positions.
- Percent: Render the percentage of longs and shorts of the total value of both. Higher resolution charts offer better views of this.
- Highlight Extremes: Change the background color when longs or shorts are considerably unbalanced (see "Extreme Theshold" and "Interpretation").
- Extreme Threshold: The percentage value at which longs or shorts are considered extreme. 60% longs can signify overbought and 60% shorts can signify oversold.
INTERPRETATION
See the excellent material by Bitcoin Trading Challenge on YouTube: www.youtube.com
- Background (unless "Highlight Extremes" option is disabled):
- Green: The percentage of shorts is equal to or greater than the extreme threshold.
- Red: The percentage of longs is equal to or greater than the extreme threshold.
Bitfinex Bitcoin BullishnessBased on contrary opinion in futures, I've adjusted this to Bitcoin, more thoroughly Bitfinex margin longs & shorts. Those unfamiliar with the concept, contrary opinion illustrates the psychological sentiment in the market by determining the degree of bullishness or bearishness among participants in the market.
The principle holds that when the majority of people agree on anything, they are generally wrong, so following the principle you would analyse and look to take the other side of the trades.
Consider this, once the market is extremely bullish, all bulls have already entered the market to an extent that one can't commit any more funds to the position. Even though Bitfinex margin positions are not like future trading, that every short must have someone taking the long side, one should understand that the majority of people do not make money on the market, so whenever this indicator goes too low or too high, one should look for a trend reversal.
This indicator is in the range of 0 to 1 and the neutral position for a "healthy" market is 0.55ish. Some adjustments should probably be made according to the cryptocurrency markets and I might add this in the future updates, but as of now it's a good indicator for forecasts and to get a bigger picture on a timeframe of 1 DAY or longer charts.
The base of the indicator is simple, amount of longs divided by the sum of shorts and longs.
Also you can see, how only now, 10th of April, we are hitting new lows in the bearishness of the market.
Psychological line Psychological line (PSY), as an indicator, is the ratio of the number of
rising periods over the total number of periods. It reflects the buying
power in relation to the selling power.
If PSY is above 50%, it indicates that buyers are in control. Likewise,
if it is below 50%, it indicates the sellers are in control. If the PSY
moves along the 50% area, it indicates balance between the buyers and
sellers and therefore there is no direction movement for the market.
Gap LineGAP LINE:
Plots the cumulative line of gaps to see extremes in psychology.
Plenty of Gap-UP's where the Open is higher than the previous bar's close get the market excited.
Plenty of Gap-DOWN's where the Open is lower than the previous bar's close get the market scared and depressed.
Look for the Gap Line to peak prior to an important peak in the market and vice versa. Look for a low in the Gap Line prior to an important low in the market.
Simple, but effective.
Tim
