Guassian Distribution Forecast [prediction intervals]The Indicator
The Indicator combines volatility and frequency distributions to forecast an area of possible price expansion with an approximate confidence interval / level and level of significance (significance level).
The Script Formula
Additional comments
To alter the models forecasting precision to reflect a given confidence interval, e.g the 90% confidence level (C.L.), use the 1.64 multiplier (toggle value in "Standard normal distribution sd" setting), to use a specific C.L., e.g. the 85th percentile either search for this on google, or calculate it yourself using a Standard Normal Distribution Probability table. Additionaly volatility may be changed by toggling the lookback period setting, this can be thought of as widening the distribution tails.
The look forward parameter is currently fixed at 20, this is because it does not currently work correctly with higher integers, I will try resolve this problem and any other bugs as soon as possible
Zmienność
Value At RiskThe Value at Risk Channel (VaR Channel) is a trading indicator designed to assist traders in managing their risk exposure effectively. By allowing users to select a specific time period and a probability value, this indicator generates upper and lower limits that the price might potentially attain within the chosen timeframe and probability range.
CONCEPTS
This indicator employs the concept of Value at Risk (VaR) calculation, a crucial metric in risk management. VaR quantifies the potential financial loss within a position, portfolio, or company over a defined time period. Financial institutions like banks and investment firms use VaR to estimate the extent and likelihood of potential losses in their portfolios.
The "historical method" is utilized to compute VaR within the indicator. This method analyzes the historical performance of returns and constructs a histogram representing the statistical distribution of past returns. Assuming returns adhere to a normal distribution, probabilities are assigned to different return values based on their position in the distribution percentile.
HOW TO USE
Suppose you wish to plot upper and lower price limits for a 4-hour period with a 5% probability. Access the indicator's Settings tab and set the Timeframe parameter to "4 hours" while configuring the Probability parameter to 5.0.
The indicator serves as a tool to determine appropriate Stop-Loss levels triggering with low probability. Additionally, it helps gauge the likelihood of triggering such levels.
Likewise, you can assess the probability of your desired Take-Profit level being reached within a specified time frame. For instance, if you anticipate your target to be achieved within a week, set the Timeframe parameter to "1 week" and adjust the Probability parameter to align the VaR channel's limits with your Take-Profit level. The resulting Probability parameter value reflects the likelihood of your target being met within the expected time frame.
This indicator proves valuable for evaluating and managing risk, as well as refining trading strategies. If you discover other applications for this indicator, feel free to share them in the comments!
SETTINGS
Timeframe: Designates the time period within which the price might touch the VaR channel's upper or lower boundary, considering the specified Probability parameter.
Probability: Defines the likelihood of the price reaching the VaR channel's upper or lower limit during the timeframe determined by the Timeframe parameter.
Window: Establishes the historical period (number of past bars) utilized for VaR calculation.
[OKX Signal Bot] Indicator Script Set Up TemplateDiscover the power of the Turtle Trade Channels Indicator (TUTCI), an innovative tool that integrates the time-tested principles of the legendary Turtle Trade system. This groundbreaking system shattered the belief that successful traders are born, not made, by transforming ordinary individuals into profitable traders.
The Turtle Trade Experiment, which achieved a remarkable 80% annual return over four years and amassed a staggering $150 million, showcased the immense potential of this trend-following strategy. Unlike the conventional "buy low and sell high" approach, the Turtle Trade system embraces a different philosophy—one of capturing substantial profits by following prevailing trends.
At the heart of the Turtle Trade Channels Indicator lies the concept of Donchian Channels, a powerful technical indicator developed by Richard Donchian. Building upon this foundation, the main rule of TUTCI is to identify 20-day breakouts and capitalize on them, while simultaneously utilizing a profit-taking strategy based on breaching 10-day highs or lows.
For long trades, the indicator signals a buying opportunity when the price breaks above the 20-day high. Conversely, for short trades, a selling opportunity arises when the price falls below the 20-day low. This systematic approach allows traders to align themselves with the prevailing momentum, capturing significant price movements.
To further enhance trading precision, TUTCI incorporates two key lines. The red line represents the trading line, indicating the direction of the trend. Price bars above the trend line suggest an uptrend, while those below indicate a downtrend. The dotted blue line serves as the exit line, guiding traders to close their positions when price action breaches the 10-day high or low. This rule safeguards profits and helps traders avoid potential trend reversals.
The Turtle Trade Channels Indicator (TUTCI) is a versatile tool applicable to various financial markets, including stocks, commodities, and forex. By harnessing the power of breakouts and integrating profit-taking rules, this indicator empowers traders to capitalize on favorable trading opportunities while managing risk effectively.
As with any trading strategy, it is crucial to conduct thorough backtesting and evaluation of the TUTCI system before implementing it in live trading. Traders can customize the indicator's parameters to align with their trading preferences and adapt to changing market conditions. Employing sound risk management techniques, such as position sizing and stop-loss orders, is paramount to protect capital and minimize potential losses.
Experience the transformational potential of the Turtle Trade Channels Indicator (TUTCI) and embark on a journey of trend following, capturing significant profits, and achieving trading success.
These scripts are only functioning as sample script templates to support okx alert standards. It is not intended to provide any investment, tax, or legal advice, nor should it be considered an offer to purchase, sell, hold or offer any services relating to digital assets. Digital assets, including stablecoins, involve a high degree of risk, can fluctuate greatly, and can even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition and risk tolerance. OKX does not provide investment or asset recommendations. You are solely responsible for your investment decisions, and OKX is not responsible for any potential losses. Past performance is not indicative of future results. Please consult your legal/tax/investment professional for questions about your specific circumstances.
[TTI] Jon Tr3ndy ATR Label📜 ––––HISTORY & CREDITS––––
The Jon Tr3ndy ATR Label is another creation inspired by Tr3ndy Jon (Jonathan McKeever,) and his Supply and Demand System. Building on the legacy of our premium scripts Tr3ndy Bands, Tr3ndy Edges, Tr3ndy LIS and the Tr3ndy PMZ, this script brings the power of the Average True Range (ATR) to your fingertips, but with a Tr3ndy twist.
🦄 ––––CALCULATIONS––––
The indicator uses different calculations methods to determine (Average True Range) ATR for the stock. The available calculation are:
👉 Exponential Moving Average EMA,
👉 Simple Moving Average SMA,
👉 Relative Moving Average RMA,
👉 Weighted Moving Average WMA.
The available timeframes are:
👉 Daily D
👉 Weekly W
👉 Monthly M
When you hoover with the mouse above the label, you will see what type of calculation you have chosen.
🎯 ––––WHAT IT DOES––––
The Jon Tr3ndy ATR Label is designed to dynamically calculate and display the Average True Range (ATR) of the asset directly on your chart for any of the chosen timeframes (e.g. show Weekly ATR on a Daily chart).
It can be used on equities, forex, crypto and many more. ATR is a volatility indicator that measures the degree of price volatility. This script allows users to select between daily, weekly, or monthly ATR calculations and offers a choice of four averaging methods: EMA, SMA, RMA, and WMA. The resulting ATR value is then presented as an easily readable label on your chart, ensuring you're always informed about the market's volatility.
🛠️ ––––HOW TO USE IT––––
ATR Length : Set the desired period for the ATR calculation.
Average Type : Choose your preferred averaging method from EMA, SMA, RMA, or WMA.
Day Period : Select the desired time frame for the ATR calculation: Daily (D), Weekly (W), or Monthly (M).
Label Position : Adjust the position of the ATR label on your chart using the 'Panel Position' and 'Text Size' options.
Banner : Toggle the 'Banner' option to display the ATR label as a banner on your chart.
Interpreting the ATR Label : A higher ATR value indicates greater volatility, while a lower ATR suggests less volatility. Use this information in conjunction with other indicators and analysis techniques to make informed trading decisions.
TrapZone ProThis script combines the concepts of Price Action, Trend and Momentum to identify Price Zones (Red and Green filled areas) and Price Bars (Red, Green and Gray) where traders can get trapped in the Market.
It will clearly mark the bars which favor the prevailing Trend and those bars which just don't have the momentum anymore. TrapZone moves with the market trend and will often provide it support. As the TrapZone changes direction & its color, traders can change their trade bias.
Features:
Identify strong & weak price action - By leveraging a regression calculation of price movement on Y axis against the x axis, we identify the strength of current bars. Increasing relative strength of bars indicate Bullish (Green Bars) & Bearish (Red Bars) price movement, respectively. As the relative strength starts to decrease in Bullish or Bearish price action, the indicator immediately changes the color of these bars to Gray (by default). We call these TrapBars .
Current price trend - By using the highs and lows of price in multiple periods, we are calculating the trend of the price. The Bullish trend is shown by the Green zone and Bearish trend is shown by the Red zone. These zones are the shaded areas which are plotted on the chart. If the price is in these Zones, Longs or Short trades are not advised as that price action is weak. We call these TrapZones .
Strength of the Momentum - the thickness of the TrapZone shows the strength of the current Bullish or Bearish trend. That means the wider the shaded area grows the stronger is the current market momentum. A Flat TrapZone indicates sideways price action.
Knowing when NOT to Trade is as important as when to Trade. While this indicator is designed to avoid taking bad trades such as FOMO, Catching a Falling Knife or Fighting The Trend , it successfully reveals the good trade setups!
How these features of this indicator helps Traders avoids common mistakes:
FOMO or Fear of Missing Out - If a Trader Sees TrapBars in a Bullish or Bearish Trend, they will avoid entry as the price action is weak at that time. This will avoid late entries.
Catching a Falling Knife (a.k.a. Picking a Bottom) - When Red TrapZone is being plotted, Traders can avoid taking Long Entries hoping for a price reversal.
Fighting The Trend (a.k.a Picking a Top) - When Green TrapZone is being plotted, Traders can avoid taking Short entries hoping for a price reversal.
TrapZone Pro does all this in a single panel of the chart irrespective of the market or timeframe.
How to use TrapZone Pro indicator for trading [
A. Market Analysis
Green TrapZone is Bullish and traders should not take Shorts. If Green TrapZone is moving higher, Market is Strong
Red TrapZone is Bearish and traders should not take Longs. If Red TrapZone is moving Lower, Market is Strong
No trades when TrapBars are forming
No trades inside the TrapZone
B. Trade Guidance System
Establish Market Bias - Bullish or Bearish using the TrapZone Color
Only Enter Long in Long Color Bars i.e. Green by default
Only Enter Short in Short Color Bars i.e. Red by default
3 Classes of Trades are Possible Class A, B & C. A being the best Reward : Risk ratio and C being the least rewarding. So use trade size accordingly.
Class A - Best bars are always the first & Second, close to the TrapZone
Class B - Long Bar or Short Bar Forming after TrapBar away from the TrapZone in a Strong Market
Class C - Long Bar or Short Bar Forming after TrapBar close to the TrapZone in a Flat Market (identified by Flat TrapZone )
Take profits when Price moves away from the TrapZone & TrapBars start forming OR Your Target is hit !
See a few examples of Trade Classes & Entries/ Exits for a better understanding
Recommendations
Select Session to “Electronic Trading Hours” in chart settings so you can see the Post & Pre Market trading as well. You can change the color of these sessions to the same color as chart background, so it is not distracting.
Start by Trading in the Hourly or Daily time frame to get used to the new indicator and its Trade Guidance System .
Position Size is the best form of Risk Management. Have a fixed dollar loss per trade pre-determined and adjust the size based on market volatility.
Even though this indicator is designed to work on any market or timeframe, trade the markets that you are familiar with and timeframe that matches your lifestyle. Your understanding of the instrument's behavior and knowledge of what makes it move is valuable.
Basic Set-Up
Add the Indicator to the chart
Open Chart Settings and in Symbol Section
Switch off “ Borders ”
Switch off “ Wick ” or Change the colors to a same non-distracting color like Black or Gray
Open TrapZone Pro Settings
Set the colors for the “ Long Bars ”, “ Short Bars ” & “ No Entry Bars ” if you wish to change the default colors
Change “ TrapZone ” colors to your Taste or leave the defaults
Green for “Color 0” that represents Bullish Price Action
Red for “Color 1” that represents Bearish Price Action
Important Advice & Disclaimer: This indicator does not guarantee that you will make money. It is a tool that performs market analysis for you and presents it in a easy to consume fashion. Markets are truly random and can change direction on a dime. You must use prudent risk and money management strategy based on your investor profile, investment objectives and risk appetite.
To Get Access - See Author’s instructions below
Trade size calculatorThis script will calculate recommended Trade Size based on your Risk appetite, Trading style and Current market volatility. Once you input “ RiskPerTrade ” amount, It automatically adjusts recommended Trade Size for changes in markets behavior. You have an option to select “ Long Term ”, “ Short Term ” & “ Intraday ” as your Trade Type. Your Rec Size (Trade Size) will be calculated and printed on you chart.
How it works:
It calculates recommended trade size using your accepted risk ( RiskPerTrade input) and instruments current average price range.
It uses different multipliers to adjust the trade size based on your Trade Type .
Intraday trades are assumed to be closed within the same trading session and therefore will have the highest recommended size.
Short Term trades assume the overnight risk added to the positions and recommend a lower size.
Long Term trades assume overnight & weekend risk added to the position and therefore recommend the smallest size.
Your Trade Size is the key to Risk Management. This Indicator is simple but powerful when used with a good Portfolio Management Strategy. Just add the indicator to your chart and configure its inputs as per your trade plan.
How to configure the Indicator
Input 1 - Add RiskPerTrade amount
Input 2 - Select your Trade Type
Input 3 - Add a negative number in BarsRight to position the label in the desired location of your screen.
Important Display Setting - “ BarsRight ” Input - If you CAN'T SEE the Yellow Label on the chart after you added the indicator, set this number to a large negative no. for example -200 and then adjust the number to get the label positioned where you would like. This happens due to various screen formats and resolutions.
Please note: This indicator is designed for Equities, Stocks or ETFs only. For users in markets not priced in US dollar, make sure your instrument’s price and your RiskPerTrade amount are in the same currency.
Bollinger Band Percentile SuiteThe Bollinger Band Percentile Suite (𝐵𝐵𝒫𝒸𝓉 𝒮𝓊𝒾𝓉𝑒) is a comprehensive and customizable toolkit built upon the foundation of the %B indicator. The methodology behind this toolkit remains consistent with the original %B indicator, while introducing a host of powerful features to enhance its functionality and adaptability.
Key Features and Customization:
The 𝐵𝐵𝒫𝒸𝓉 offers a wide array of customizable options to suit your trading preferences and strategies. It includes a variety of 14 moving average types that can be chosen as the basis for the Bollinger Band calculation. Additionally, traders have the flexibility to set their upper and lower boundaries for mean reversion detection, allowing for analysis tailored to the user's preference.
Deviation Calculation:
The toolkit provides an option to choose between standard and weighted deviation calculation methods. This added customization ensures that the indicator's behavior aligns with your unique trading style and preferences.
Signals and Reversals:
The 𝐵𝐵𝒫𝒸𝓉 excels in identifying potential overbought and oversold market conditions. It highlights these levels on the chart and marks potential reversal signals with small circles positioned either at the top or bottom of the indicator pane, providing traders with actionable insights.
Trend and Color Coding:
Incorporating a color-coded approach, the BBpct Suite enhances your understanding of market dynamics. It offers bar coloring options based on trend, allowing traders to identify bullish or bearish market conditions as the percentile goes above or below the midline.
Extremities and Reversions:
Recognizing extreme market conditions is crucial for traders. The 𝐵𝐵𝒫𝒸𝓉 includes color-coded indicators for extremities, indicating when the percentile ventures above or below the predefined thresholds. Moreover, it promptly identifies reversions by marking the moment the percentile crosses under the upper threshold (overbought) or over the lower threshold (oversold).
The Bollinger Band Percentile Suite equips traders with a versatile toolkit to gain valuable insights into market overbought and oversold conditions, and potential reversal signals. Its extensive customization options and array of features empower traders to make well-informed decisions based on their unique trading strategies and risk tolerance.
Please note that while the BBpct Suite provides robust analysis, it is advisable to combine its insights with other technical indicators and tools for a comprehensive trading approach.
Example Chart:
Magic LevelsPS MODS : This indicator calculate the levels based on IndiaVIX, volumes on FnO, cofficient and factor to reach on the level. Hope this can help you to understand the functionality of this Indicator
This indicator is used for draw levels or "Magic Levels/Lines" for Nifty, Bank Nifty and FnO futures, based on volatility (indiavix) calculations. This powerful tool is designed to provide insights into market volatility and assist traders and investors in making informed decisions in the Indian stock market.
As of now the indicator draws levels only on Bank Nifty and Nifty. Soon we'll publish the next update supporting all FnO Futures and stocks.
The India VIX, often referred to as the "Fear Index," is a popular measure of market volatility and investor sentiment. It quantifies the market's expectations of near-term volatility by calculating the implied volatility of NIFTY options. The VIX Levels Indicator utilizes these calculations to draw key levels on price charts, enhancing traders' understanding of potential market movements.
The indicator's main function is to identify critical support and resistance levels derived from IndiaVIX data. We considered to volatility of all the FnO instruments and calculated the mean value keeping the day into consideration while performing the calculations. These levels serve as significant reference points that can help traders gauge potential price reversals, breakouts, and trends. By integrating the Magic Levels Indicator into their analysis, traders can gain a comprehensive view of market dynamics and improve their timing for entering or exiting positions.
Traders can customize the VIX Levels Indicator to suit their preferences, adjusting parameters such as time period where the default is 1 day. This flexibility allows traders to adapt the indicator to different trading strategies and timeframes. Whether a trader focuses on intraday scalping or swing trading, the Magic Levels Indicator can be a valuable addition to their technical analysis toolkit.
Greedy DCA█ OVERVIEW
Detect price crashes in volatile conditions. This is an indicator for a greedy dollar cost average (DCA) strategy. That is, for people who want to repeatedly buy an asset over time when its price is crashing.
█ CONCEPTS
Price crashes are indicated if the price falls below one or more of the 4 lower Bollinger Bands which are calculated with increasing multipliers for the standard deviation.
In these conditions, the price is far below the average. Therefore they are considered good buying opportunities.
No buy signals are emitted if the Bollinger Bands are tight, i.e. if the bandwidth (upper -lower band) is below the value of the moving average multiplied with a threshold factor. This ensures that signals are only emitted if the conditions are highly volatile.
The Bollinger Bands are calculated based on the daily candles, irrespective the chart time frame. This allows to check the strategy on lower time frames
Floor and Roof IndicatorThe Floor and Roof indicator is a tool developed to help traders identify potential areas of support and resistance both for trend following and for mean reversal trading decisions.
The indicator plots the "Roof" which is the main level of resistance, and the "Floor" which is the main level of support. These lines are calculated on the "Lenght" parameter and smoothed by the "Smooth" parameter, and they use both the volatility and the main market structure as calculation methods.
Additionally, this indicator plots an area that can be modified by the "Zone width" parameter and two other lines, called "Second floor" and "Second roof" respectively, which are plotted only whenever they are significant to the price current level.
This indicator can be used in several ways:
- In a clear trend, you could wait for a break of the second floor or roof as an indication of a change in the market direction
- As the price goes out of the reversal zones, this can be an indication of a reversal
- In a clear trend, you can wait for the price to bounce on the second floor or roof lines to enter a trade
GKD-C Dollar Pile [Loxx]The Giga Kaleidoscope GKD-C Dollar Pile is a confirmation module included in Loxx's "Giga Kaleidoscope Modularized Trading System."
█ GKD-C Dollar Pile
Dollar Pile applies a custom strategy using Bollinger Bands, calculated from an asset's closing price. Based on the closing price's position relative to the bands, trading signals are produced. The bands can be further adjusted based on these signals. The outcome is visualized as a histogram, colored either green or red, representing the trading signal's direction.
█ Giga Kaleidoscope Modularized Trading System
Core components of an NNFX algorithmic trading strategy
The NNFX algorithm is built on the principles of trend, momentum, and volatility. There are six core components in the NNFX trading algorithm:
1. Volatility - price volatility; e.g., Average True Range, True Range Double, Close-to-Close, etc.
2. Baseline - a moving average to identify price trend
3. Confirmation 1 - a technical indicator used to identify trends
4. Confirmation 2 - a technical indicator used to identify trends
5. Continuation - a technical indicator used to identify trends
6. Volatility/Volume - a technical indicator used to identify volatility/volume breakouts/breakdown
7. Exit - a technical indicator used to determine when a trend is exhausted
8. Metamorphosis - a technical indicator that produces a compound signal from the combination of other GKD indicators*
*(not part of the NNFX algorithm)
What is Volatility in the NNFX trading system?
In the NNFX (No Nonsense Forex) trading system, ATR (Average True Range) is typically used to measure the volatility of an asset. It is used as a part of the system to help determine the appropriate stop loss and take profit levels for a trade. ATR is calculated by taking the average of the true range values over a specified period.
True range is calculated as the maximum of the following values:
-Current high minus the current low
-Absolute value of the current high minus the previous close
-Absolute value of the current low minus the previous close
ATR is a dynamic indicator that changes with changes in volatility. As volatility increases, the value of ATR increases, and as volatility decreases, the value of ATR decreases. By using ATR in NNFX system, traders can adjust their stop loss and take profit levels according to the volatility of the asset being traded. This helps to ensure that the trade is given enough room to move, while also minimizing potential losses.
Other types of volatility include True Range Double (TRD), Close-to-Close, and Garman-Klass
What is a Baseline indicator?
The baseline is essentially a moving average, and is used to determine the overall direction of the market.
The baseline in the NNFX system is used to filter out trades that are not in line with the long-term trend of the market. The baseline is plotted on the chart along with other indicators, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR).
Trades are only taken when the price is in the same direction as the baseline. For example, if the baseline is sloping upwards, only long trades are taken, and if the baseline is sloping downwards, only short trades are taken. This approach helps to ensure that trades are in line with the overall trend of the market, and reduces the risk of entering trades that are likely to fail.
By using a baseline in the NNFX system, traders can have a clear reference point for determining the overall trend of the market, and can make more informed trading decisions. The baseline helps to filter out noise and false signals, and ensures that trades are taken in the direction of the long-term trend.
What is a Confirmation indicator?
Confirmation indicators are technical indicators that are used to confirm the signals generated by primary indicators. Primary indicators are the core indicators used in the NNFX system, such as the Average True Range (ATR), the Moving Average (MA), and the Relative Strength Index (RSI).
The purpose of the confirmation indicators is to reduce false signals and improve the accuracy of the trading system. They are designed to confirm the signals generated by the primary indicators by providing additional information about the strength and direction of the trend.
Some examples of confirmation indicators that may be used in the NNFX system include the Bollinger Bands, the MACD (Moving Average Convergence Divergence), and the MACD Oscillator. These indicators can provide information about the volatility, momentum, and trend strength of the market, and can be used to confirm the signals generated by the primary indicators.
In the NNFX system, confirmation indicators are used in combination with primary indicators and other filters to create a trading system that is robust and reliable. By using multiple indicators to confirm trading signals, the system aims to reduce the risk of false signals and improve the overall profitability of the trades.
What is a Continuation indicator?
In the NNFX (No Nonsense Forex) trading system, a continuation indicator is a technical indicator that is used to confirm a current trend and predict that the trend is likely to continue in the same direction. A continuation indicator is typically used in conjunction with other indicators in the system, such as a baseline indicator, to provide a comprehensive trading strategy.
What is a Volatility/Volume indicator?
Volume indicators, such as the On Balance Volume (OBV), the Chaikin Money Flow (CMF), or the Volume Price Trend (VPT), are used to measure the amount of buying and selling activity in a market. They are based on the trading volume of the market, and can provide information about the strength of the trend. In the NNFX system, volume indicators are used to confirm trading signals generated by the Moving Average and the Relative Strength Index. Volatility indicators include Average Direction Index, Waddah Attar, and Volatility Ratio. In the NNFX trading system, volatility is a proxy for volume and vice versa.
By using volume indicators as confirmation tools, the NNFX trading system aims to reduce the risk of false signals and improve the overall profitability of trades. These indicators can provide additional information about the market that is not captured by the primary indicators, and can help traders to make more informed trading decisions. In addition, volume indicators can be used to identify potential changes in market trends and to confirm the strength of price movements.
What is an Exit indicator?
The exit indicator is used in conjunction with other indicators in the system, such as the Moving Average (MA), the Relative Strength Index (RSI), and the Average True Range (ATR), to provide a comprehensive trading strategy.
The exit indicator in the NNFX system can be any technical indicator that is deemed effective at identifying optimal exit points. Examples of exit indicators that are commonly used include the Parabolic SAR, the Average Directional Index (ADX), and the Chandelier Exit.
The purpose of the exit indicator is to identify when a trend is likely to reverse or when the market conditions have changed, signaling the need to exit a trade. By using an exit indicator, traders can manage their risk and prevent significant losses.
In the NNFX system, the exit indicator is used in conjunction with a stop loss and a take profit order to maximize profits and minimize losses. The stop loss order is used to limit the amount of loss that can be incurred if the trade goes against the trader, while the take profit order is used to lock in profits when the trade is moving in the trader's favor.
Overall, the use of an exit indicator in the NNFX trading system is an important component of a comprehensive trading strategy. It allows traders to manage their risk effectively and improve the profitability of their trades by exiting at the right time.
What is an Metamorphosis indicator?
The concept of a metamorphosis indicator involves the integration of two or more GKD indicators to generate a compound signal. This is achieved by evaluating the accuracy of each indicator and selecting the signal from the indicator with the highest accuracy. As an illustration, let's consider a scenario where we calculate the accuracy of 10 indicators and choose the signal from the indicator that demonstrates the highest accuracy.
The resulting output from the metamorphosis indicator can then be utilized in a GKD-BT backtest by occupying a slot that aligns with the purpose of the metamorphosis indicator. The slot can be a GKD-B, GKD-C, or GKD-E slot, depending on the specific requirements and objectives of the indicator. This allows for seamless integration and utilization of the compound signal within the GKD-BT framework.
How does Loxx's GKD (Giga Kaleidoscope Modularized Trading System) implement the NNFX algorithm outlined above?
Loxx's GKD v2.0 system has five types of modules (indicators/strategies). These modules are:
1. GKD-BT - Backtesting module (Volatility, Number 1 in the NNFX algorithm)
2. GKD-B - Baseline module (Baseline and Volatility/Volume, Numbers 1 and 2 in the NNFX algorithm)
3. GKD-C - Confirmation 1/2 and Continuation module (Confirmation 1/2 and Continuation, Numbers 3, 4, and 5 in the NNFX algorithm)
4. GKD-V - Volatility/Volume module (Confirmation 1/2, Number 6 in the NNFX algorithm)
5. GKD-E - Exit module (Exit, Number 7 in the NNFX algorithm)
6. GKD-M - Metamorphosis module (Metamorphosis, Number 8 in the NNFX algorithm, but not part of the NNFX algorithm)
(additional module types will added in future releases)
Each module interacts with every module by passing data to A backtest module wherein the various components of the GKD system are combined to create a trading signal.
That is, the Baseline indicator passes its data to Volatility/Volume. The Volatility/Volume indicator passes its values to the Confirmation 1 indicator. The Confirmation 1 indicator passes its values to the Confirmation 2 indicator. The Confirmation 2 indicator passes its values to the Continuation indicator. The Continuation indicator passes its values to the Exit indicator, and finally, the Exit indicator passes its values to the Backtest strategy.
This chaining of indicators requires that each module conform to Loxx's GKD protocol, therefore allowing for the testing of every possible combination of technical indicators that make up the six components of the NNFX algorithm.
What does the application of the GKD trading system look like?
Example trading system:
Backtest: Multi-Ticker CC Backtest
Baseline: Hull Moving Average
Volatility/Volume: Hurst Exponent
Confirmation 1: Dollar Pile as shown on the chart above
Confirmation 2: uf2018
Continuation: Coppock Curve
Exit: Rex Oscillator
Metamorphosis: Baseline Optimizer
Each GKD indicator is denoted with a module identifier of either: GKD-BT, GKD-B, GKD-C, GKD-V, GKD-M, or GKD-E. This allows traders to understand to which module each indicator belongs and where each indicator fits into the GKD system.
█ Giga Kaleidoscope Modularized Trading System Signals
Standard Entry
1. GKD-C Confirmation gives signal
2. Baseline agrees
3. Price inside Goldie Locks Zone Minimum
4. Price inside Goldie Locks Zone Maximum
5. Confirmation 2 agrees
6. Volatility/Volume agrees
1-Candle Standard Entry
1a. GKD-C Confirmation gives signal
2a. Baseline agrees
3a. Price inside Goldie Locks Zone Minimum
4a. Price inside Goldie Locks Zone Maximum
Next Candle
1b. Price retraced
2b. Baseline agrees
3b. Confirmation 1 agrees
4b. Confirmation 2 agrees
5b. Volatility/Volume agrees
Baseline Entry
1. GKD-B Baseline gives signal
2. Confirmation 1 agrees
3. Price inside Goldie Locks Zone Minimum
4. Price inside Goldie Locks Zone Maximum
5. Confirmation 2 agrees
6. Volatility/Volume agrees
7. Confirmation 1 signal was less than 'Maximum Allowable PSBC Bars Back' prior
1-Candle Baseline Entry
1a. GKD-B Baseline gives signal
2a. Confirmation 1 agrees
3a. Price inside Goldie Locks Zone Minimum
4a. Price inside Goldie Locks Zone Maximum
5a. Confirmation 1 signal was less than 'Maximum Allowable PSBC Bars Back' prior
Next Candle
1b. Price retraced
2b. Baseline agrees
3b. Confirmation 1 agrees
4b. Confirmation 2 agrees
5b. Volatility/Volume agrees
Volatility/Volume Entry
1. GKD-V Volatility/Volume gives signal
2. Confirmation 1 agrees
3. Price inside Goldie Locks Zone Minimum
4. Price inside Goldie Locks Zone Maximum
5. Confirmation 2 agrees
6. Baseline agrees
7. Confirmation 1 signal was less than 7 candles prior
1-Candle Volatility/Volume Entry
1a. GKD-V Volatility/Volume gives signal
2a. Confirmation 1 agrees
3a. Price inside Goldie Locks Zone Minimum
4a. Price inside Goldie Locks Zone Maximum
5a. Confirmation 1 signal was less than 'Maximum Allowable PSVVC Bars Back' prior
Next Candle
1b. Price retraced
2b. Volatility/Volume agrees
3b. Confirmation 1 agrees
4b. Confirmation 2 agrees
5b. Baseline agrees
Confirmation 2 Entry
1. GKD-C Confirmation 2 gives signal
2. Confirmation 1 agrees
3. Price inside Goldie Locks Zone Minimum
4. Price inside Goldie Locks Zone Maximum
5. Volatility/Volume agrees
6. Baseline agrees
7. Confirmation 1 signal was less than 7 candles prior
1-Candle Confirmation 2 Entry
1a. GKD-C Confirmation 2 gives signal
2a. Confirmation 1 agrees
3a. Price inside Goldie Locks Zone Minimum
4a. Price inside Goldie Locks Zone Maximum
5a. Confirmation 1 signal was less than 'Maximum Allowable PSC2C Bars Back' prior
Next Candle
1b. Price retraced
2b. Confirmation 2 agrees
3b. Confirmation 1 agrees
4b. Volatility/Volume agrees
5b. Baseline agrees
PullBack Entry
1a. GKD-B Baseline gives signal
2a. Confirmation 1 agrees
3a. Price is beyond 1.0x Volatility of Baseline
Next Candle
1b. Price inside Goldie Locks Zone Minimum
2b. Price inside Goldie Locks Zone Maximum
3b. Confirmation 1 agrees
4b. Confirmation 2 agrees
5b. Volatility/Volume agrees
Continuation Entry
1. Standard Entry, 1-Candle Standard Entry, Baseline Entry, 1-Candle Baseline Entry, Volatility/Volume Entry, 1-Candle Volatility/Volume Entry, Confirmation 2 Entry, 1-Candle Confirmation 2 Entry, or Pullback entry triggered previously
2. Baseline hasn't crossed since entry signal trigger
4. Confirmation 1 agrees
5. Baseline agrees
6. Confirmation 2 agrees
MAD Volatility PercentileMean Absolute Deviation (MAD) is a statistical measure that tells you how spread out or variable a set of data points is. It calculates the average distance of each data point from the mean (average) of the data set. MAD helps you understand how much individual values differ from the average value. It's a way to measure the overall "average distance" of the data points from the center point.
Indicator Overview:
This indicator measures market volatility using Mean Absolute Deviation of returns. The MAD Volatility Percentile Indicator calculates and represents market volatility as a percentile. The lower the percentile, the lower the volatility, and the higher the percentile value is, the higher the volatility is.
Understanding Volatility:
Lower percentiles signify a lower volatility market environment, reflecting reduced volatility, while higher percentiles indicate increased volatility and significant price movements. The indicator also comes with an SMA to see when the burst of higher volatility occur. You can also change the sample length on the indicators option. You can consider a big move occurring when the percentile value is above the SMA.
Application
Generally when the Mean Absolute Deviation Volatility Percentile is low, then this means that the volatility is low and a expansion could happen soon, which means a big move will occur soon. This indicator can also protect you from entering a trade that will not have any significant moves for a while.
This indicator is not a directional indicator but it can be applied with directional indicators, and is extremely versatile. For example you can use it with momentum indicators and if there is low volatility and bullish momentum then this can be a signal to potentially place a long position.
Features:
The percentile length sets the lookback of the percentile which calculates the percentile of the Mean Absolute Deviation of returns.
Sample length: Gets the volatility sample (returns)
SMA Length: The SMA of the percentile. Used to find when a move can be considered as an "expansion"
Alerts: You can also enable color alerts that flash when the volatility is at extremely low levels which can signify that a big move could happen soon.
This is an example of the alerts that the indicator comes with.
CPR (Central Pivot Range)Central Pivot Range is a trend and volatility forecasting tool. It is calculated from previous session's (day, week, or month) high, low, close values. It works on the idea that every trading session must be the result of its previous trading session.
Pivot, top pivot and bottom pivot values form the CPR. If the CPR for each trading session is getting higher (and also the price is trading above it) then it denotes bullish bias and vice versa for bearish. And the width of the CPR (i.e., distance between top and bottom pivot) denotes the volatility of the session.
If the CPR width is narrow, we can expect a trending or volatile trading session. If it's wide, then we can expect a range bound or sideways trading session.
Support and Resistance levels can be used as a profit booking zone or to add/reduce position sizing.
In this Indicator you have the following:
1. CPR with traditional support and resistance levels (S1-S5 & R1-R5).
2. Developing CPR for next trading day, week, and month.
3. Customizable lookback period, line width.
4. Option to show/hide labels, prices, SR levels, developing CPR.
Average Range LinesThis Average Range Lines indicator identifies high and low price levels based on a chosen time period (day, week, month, etc.) and then uses a simple moving average over the length of the lookback period chosen to project support and resistance levels, otherwise referred to as average range. The calculation of these levels are slightly different than Average True Range and I have found this to be more accurate for intraday price bounces.
Lines are plotted and labeled on the chart based on the following methodology:
+3.0: 3x the average high over the chosen timeframe and lookback period.
+2.5: 2.5x the average high over the chosen timeframe and lookback period.
+2.0: 2x the average high over the chosen timeframe and lookback period.
+1.5: 1.5x the average high over the chosen timeframe and lookback period.
+1.0: The average high over the chosen timeframe and lookback period.
+0.5: One-half the average high over the chosen timeframe and lookback period.
Open: Opening price for the chosen time period.
-0.5: One-half the average low over the chosen timeframe and lookback period.
-1.0: The average low over the chosen timeframe and lookback period.
-1.5: 1.5x the average low over the chosen timeframe and lookback period.
-2.0: 2x the average low over the chosen timeframe and lookback period.
-2.5: 2.5x the average low over the chosen timeframe and lookback period.
-3.0: 3x the average low over the chosen timeframe and lookback period.
Look for price to find support or resistance at these levels for either entries or to take profit. When price crosses the +/- 2.0 or beyond, the likelihood of a reversal is very high, especially if set to weekly and monthly levels.
This indicator can be used/viewed on any timeframe. For intraday trading and viewing on a 15 minute or less timeframe, I recommend using the 4 hour, 1 day, and/or 1 week levels. For swing trading and viewing on a 30 minute or higher timeframe, I recommend using the 1 week, 1 month, or longer timeframes. I don’t believe this would be useful on a 1 hour or less timeframe, but let me know if the comments if you find otherwise.
Based on my testing, recommended lookback periods by timeframe include:
Timeframe: 4 hour; Lookback period: 60 (recommend viewing on a 5 minute or less timeframe)
Timeframe: 1 day; Lookback period: 10 (also check out 25 if your chart doesn’t show good support/resistance at 10 days lookback – I have found 25 to be useful on charts like SPX)
Timeframe: 1 week; Lookback period: 14
Timeframe: 1 month; Lookback period: 10
The line style and colors are all editable. You can apply a global coloring scheme in the event you want to add this indicator to your chart multiple times with different time frames like I do for the weekly and monthly.
I appreciate your comments/feedback on this indicator to improve. Also let me know if you find this useful, and what settings/ticker you find it works best with!
Also check out my profile for more indicators!
Koalafied Donchian Channel WidthDonchian Channel Width indicator with average channel width value and Standard Deviations shown.
Experimental gauge of volatility. Channel Width greater than average over lookback period shows higher levels of volatility, whereas channel width below average is correlated to low historical volatility. Extensions of width over user selected standard deviations show peaks in volatility.
Unique as average channel width is taken from array of value changes updating only when prior high/lows are breached instead of bar by bar like similar indicators.
Size of array (lookback) is user adjustable.
Volume Bars - Leviathan x Tradingriot This script is a collaboration with Tradingriot. It improves the regular volume indicator by coloring the bars based on different criteria to provide additional insights into market activity.
Coloring conditions are calculated using a combination of relative volume (current trading volume relative to past trading volume) and price movements (candle high-low range):
1. **High Volume**: This is represented by bars that exceed a user-defined relative volume (RVOL) or are the highest volume over a certain lookback period. They often signal a start or the end of a price move.
2. **Low Volume**: These are bars where volume is lower than a certain RVOL or is the lowest volume over a certain lookback period. Low Volume bars often act as weak spots that later get filled.
3. **Churn Bars**: Churn bars represent periods where there is a lot of volume, but little price movement. They often signal a start or the end of a price move.
nVPSA - Normalized Volume-Price Spread AnalysisNormalized volume-price spread analysis indicator can be helpfully tool in Tom's William metodology - VSA.
The indicator use normalized data by y/x(max) operation, where x(max) is the biggest value in range. Indicator separate spread to four levels - standard divation is separator.
The indicator graphically shows:
- normalized volume, visualized by wide column,
- normalized price spread, visualized by narrow column,
- linear regression calculated from normalized volume, visualised by crosses,
- linear regression from normalized price spread, visualized by circles.
Columns are marked by five colors according to standard deviation:
- blue xsecond deviation, xfourth deviation,
- gold when volume or price spread achive new maximum in analysis range.
Linear regression uses three colors:
- green when volume/spread is up bar by bar,
- red when volume/spread is down bar by bar,
- black when volume/spread is down two times bar by bar.
Additionally, it is posible to use alarm on Golden Bar. Colors and range values are editable from indicator settings.
Bar Color Long / Short Indicator With Advised SL Rev 1This is the Revised Version of Bar Color Long / Short Indicator With Advised SL with some extra features
Overview
This script is a trading indicator named "Bar Color Long / Short Indicator With Advised SL" designed for the TradingView platform. The indicator's primary purpose is to provide entry signals for long and short positions, based on various technical analysis methods. Additionally, the indicator suggests stop-loss levels for both long and short positions.
User Inputs
The indicator has several user inputs, such as:
Length
Smoothing
Multiplier
Show bar colors (ON/OFF)
When the bar colors are turned off, the alert signals for long and short positions will be displayed instead.
Custom Risk Calculation
The script calculates a custom risk level based on a modified version of the RSI (Relative Strength Index) formula. The custom risk level is divided into three categories: low, medium, and high.
Sentiment Score Calculation
The indicator calculates a sentiment score based on a combination of methods resembling EMA (Exponential Moving Average), MACD (Moving Average Convergence Divergence), and ROC (Rate of Change). The sentiment score is used to determine if the sentiment is positive or negative.
Bollinger Bands Percent and Combined Signal
The Bollinger Bands Percent is calculated, and the custom risk, sentiment score, and Bollinger Bands Percent are combined to generate a new signal. This signal is used in conjunction with EMA10 to determine the bar colors and provide entry signals.
Bar Colors
Based on the combined signal and EMA10, the script determines the bar colors as follows:
Orange: Positive sentiment
Blue: Negative sentiment
Gray: Neutral
Entry Signals and Alerts
When the bar colors are turned off, the indicator displays large green arrow signals for long (buy) positions and red arrow signals for short (sell) positions based on the sentiment and EMA10 conditions. The script also includes alert conditions for long and short signals, which can be used to set up notifications when these signals are triggered in the TradingView platform.
Advised Stop-Loss Levels
The indicator plots stop-loss lines for both long and short positions at the last candle, accompanied by labels showing the advised stop-loss levels in numeric values
Rev 1
added / changed :
SMA50 slope check
EMA20 higher or lower than EMA10
color ON/OFF changed
Signal once Buy and Sell
Sublime Trading | Trailing StoplossWhat kind of traders/investors are we?
We are trend followers. Our scripts are designed to be used on the higher timeframes (weekly/daily) to catch the large moves/trends in the market.
Most have heard of long-term trend following. Few know how to execute the strategy.
Our scripts are designed specifically to identify and invest in long-term market trends.
What does this script do?
The exit from a position is arguably more important than the entry.
Traders/Investors will regularly find themselves in an asset based on some logic, but the exit management is very much an afterthought.
Hence why traders often take profit too early and hold onto losing positions. It is emotionally driven.
The Trailing Stoploss script is designed to remove the guesswork and show you precise levels you will want to consider exiting a position when an asset reverses.
How is the trailing stoploss produced?
The script uses the formula ATR 15 x 4.
We use ATR as it produces a stoploss which is unique to the volatility of the asset. The more volatile the asset, the wider the stoploss.
We use ATR 15 as it brings an average reading across half a month, incorporating days of extreme volatility.
The multiplier 4 works well to avoid positions being stopped out prematurely on pullbacks.
When the trailing stoploss is hit, this is where you will want to consider taking profit.
What is the best timeframe to use the script?
We recommend the daily timeframe as this is where trend followers enter assets to maximise the potential of long-term trends.
The higher timeframes are where traders and investors take fewer positions and hold for longer time periods.
The trailing stoploss follows the price of the asset a distance away to give the trend structure enough space and time to develop.
A trend is ultimately a function of time. If you eliminate time, you eliminate the trend. If you eliminate the trend, you eliminate profit.
The Trailing Stoploss script is necessary for investors who appreciate that profit is accumulated by letting winning positions run and not taking profit too early.
What makes this script unique?
Exit management and knowing when to let go of an asset is one of the main struggles budding investors face. This script has been coded specifically for the daily timeframe to:
Create a trailing stoploss that is unique to the volatility of the asset.
Allow investors to stay in positions for the duration of the trend over many months.
To distinguish between a pullback and a market reversal, allowing for discretion.
This TSL script is designed to manage positions investors take in line with long-term market trends.
Sublime Trading | Donchian Breakout SignalsWhat kind of traders/investors are we?
We are trend followers. Our scripts are designed to be used on the higher timeframes (weekly/daily) to catch the large moves/trends in the market.
Most have heard of long-term trend following. Few know how to execute the strategy.
Our scripts are designed specifically to identify and invest in long-term market trends.
What does this script do?
It produces entry signals in a confirmed bull and bear trend.
The logic is based on Donchian 20, which serves the following two purposes:
1. Confirms end-of-day entry points in a long-term trend
2. Filters out entry points in a sideways market
The signal is produced on a break and close of the Donchian 20 high in a bull trend and a break and close of the Donchian 20 low in a bear trend.
How is the entry price produced?
The entry is based on a percentage value of the range of the breakout bar added to the high of the bar in a bull trend.
In a bear trend, the percentage is subtracted from the low of the bar.
This gives an objective entry when placing a position once the OHLC of a bar is confirmed at the end of the trading day.
How is the stoploss price produced?
The script uses the formula ATR 15 x 4.
We use ATR as it produces a stoploss which is unique to the volatility of the asset. The more volatile the asset, the wider the stoploss.
We use ATR 15 as it brings an average reading across half a month, incorporating days of extreme volatility.
The multiplier 4 works well to avoid positions being stopped out prematurely on pullbacks.
When the stoploss is hit, there is when traders and investors may consider exiting positions.
What is the best timeframe to use the script?
We recommend the daily timeframe as this is where trader and investors identify and enter long-term market trends.
The higher timeframes are where traders and investors take fewer positions but hold for longer time periods.
As a result, trend followers place priority on the quality of the entry rather than quantity.
What makes this script unique?
This script has been coded specifically for the daily timeframe to:
Highlight the start of a potential long-term trends.
Confirm entry points at the end of the trading day, absorbing intraday noise.
Reduce fake breakouts in a trend.
Continue to create entry points as the trend develops to allow for compounding.
Filter out breakouts in a sideways market.
This entry signal script helps traders and investors focus on the quality of a potential position when investing in long-term market trends.
ATR LevelsThe indicator calculates and displays key levels based on the Average True Range (ATR) of an asset's price. The ATR is a measure of market volatility, and this indicator uses it to create trigger levels and ATR target levels. The "ATR Levels" indicator helps traders identify potential entry and exit points based on market volatility, providing valuable information for their trading decisions.
The indicator adds text labels to indicate whether the levels are for "Puts" or "Calls" on the trigger levels, and "Target 1" or "Target 2" on the ATR target levels.
Input Description:
ATR Length: This is an input parameter that allows the user to set the number of periods used to calculate the Average True Range (ATR). The ATR measures the market's volatility, and a higher length value will result in a smoother ATR line.
Trigger Percentage: Another input parameter that determines the percentage above and below the previous day's close at which the trigger levels will be plotted. It allows traders to set the sensitivity of the trigger levels.
Lower Trigger Level Color and Upper Trigger Level Color: These input parameters allow the user to customize the colors of the trigger levels. The indicator will plot two lines representing the lower and upper trigger levels.
Level Size: This input parameter allows the user to adjust the thickness of the trigger level lines.
ATR Target Color: An input parameter that sets the color for the ATR target level lines.
ATR Target Multiplier 1 and ATR Target Multiplier 2: These are input parameters that allow the user to set the multiplier for calculating the ATR target levels. The indicator will plot two ATR target lines above and below the previous day's close, each multiplied by the specified multiplier.
Equity Sessions [vnhilton]Note: Numbers in the chart above, particularly volume, are incorrect as I didn't have extra market data at the time of publication. Default settings are set for US markets.
(OVERVIEW)
This indicator was made specifically for equity markets which have pre-market and after-hours trading, though can be used for any other markets without these sessions, there are many other session indicators better suited for those markets. What makes this indicator different to the hundreds of session indicators out there will be highlighted in bold in the Features section below.
(FEATURES)
- After-Hours session can start earlier if the day ends short and starts after-hours trading earlier due to holidays for example
- Sessions constrained to regular trading hours can also adjust for short days as well
- Show volume for each session and also as a percentage/multiplier of day volume, average day volume with customisable period
- Show range for each session and also as a percentage/multiplier of the daily ATR with customisable period
- Lookback period for the boxes
- Customisable text size, placement, colour, name
- Customisable session lengths and constraints (regular trading hours or all including extending trading hours)
- Customisable border widths, styles and colours, and session background colour
- Toggles to show/hide sessions, volume, day volume, average day volume, session range and day ATR
DTR & ATR
Description
This ATR and DTR label is update of Existing Label provided by © ssksubam
Please See Notes on original Script Here :
Original Code is not mine but I have done few code changes which I believe will help everyone who are looking to add more labels together and save space on the chart
ATR & DTR Script is very helpful for Day Traders as I will explain in detail bellow
Following are changes I have incorporated
Previous Label took more space on the charts with Header and Footer.
I removed the Header and moved both DTR vs ATR descriptions on the same line, saving space on the chart.
I updated the code to remove => signs, which are self-explanatory as I will explain below.
I made the label in 1 single compact line for maximum space efficiency and aesthetics.
These changes improve the content's clarity and conciseness while optimizing space on the charts. If you have any further requests or need additional assistance, feel free to let me know!
What Does DTR Signify?
Stock ATR stands for Average True Range, which is a technical indicator used in trading and investment analysis. The Average True Range measures the volatility of a stock over a given period of time. It provides insights into the price movement and potential price ranges of the stock.
The ATR is calculated as the average of the true ranges over a specific number of periods. The true range is the greatest of the following three values:
The difference between the current high and the current low.
The absolute value of the difference between the current high and the previous close.
The absolute value of the difference between the current low and the previous close.
Traders and investors use ATR to assess the potential risk and reward of a stock. A higher ATR value indicates higher volatility and larger price swings, while a lower ATR value suggests lower volatility and smaller price movements. By understanding the ATR, traders can set appropriate stop-loss levels and make informed decisions about position sizing and risk management.
It's important to note that the ATR is not a directional indicator like moving averages or oscillators. Instead, it provides a measure of volatility, helping traders adapt their strategies to suit the current market conditions.
What Does ATR Signify?
The Average True Range (ATR) signifies the level of volatility or price variability in a particular financial asset, such as a stock, currency pair, or commodity, over a specific period of time. It provides valuable information to traders and investors regarding the potential risk and reward associated with the asset.
Here are the key significances of ATR:
Volatility Measurement: ATR measures the average price range between high and low prices over a specified timeframe. Higher ATR values indicate greater volatility, while lower values suggest lower volatility. Traders use this information to gauge the potential price movements and adjust their strategies accordingly.
Risk Assessment: A higher ATR value implies larger price swings, indicating increased market uncertainty and risk. Traders can use ATR to set appropriate stop-loss levels and manage risk by adjusting position sizes based on the current volatility.
Trend Strength: ATR can also be used to assess the strength of a trend. In an uptrend or downtrend, ATR tends to increase, indicating a more powerful price movement. Conversely, a declining ATR might signify a weakening trend or a consolidation period.
Range-Bound Market Identification: In a range-bound or sideways market, the ATR value tends to be relatively low, reflecting the lack of significant price movements. This information can be helpful for range-trading strategies.
Volatility Breakouts: Traders often use ATR to identify potential breakouts from consolidation patterns. When the ATR value expands significantly, it may indicate the beginning of a new trend or a breakout move.
Comparison between Assets: ATR allows traders to compare the volatility of different
How to use DTR & ATR for Trading
Using Average True Range (ATR) and Daily Trading Range (DTR) can be beneficial for day trading to assess potential price movements, manage risk, and identify trading opportunities. Here's how you can use both indicators effectively:
Calculate ATR and DTR: First, calculate the ATR and DTR values for the asset you are interested in trading. ATR is the average of true ranges over a specified period (e.g., 14 days), while DTR is the difference between the high and low prices of a single trading day.
Assess Volatility: Compare the ATR and DTR values to understand the current volatility of the asset. Higher values indicate increased volatility, while lower values suggest reduced volatility.
Setting Stop-Loss: Use ATR to set appropriate stop-loss levels. For example, you might decide to set your stop-loss a certain number of ATR points away from your entry point. This approach allows you to factor in market volatility when determining your risk tolerance.
Identify Trading Range: Analyze DTR to determine the typical daily price range of the asset. This information can help you identify potential support and resistance levels, which are essential for day trading strategies such as breakout or range trading.
Breakout Strategies: ATR can assist in identifying potential breakout opportunities. When ATR values increase significantly, it suggests an expansion in volatility, which may indicate an upcoming breakout from a trading range. Look for breakouts above resistance or below support levels with higher than usual ATR values.
Scalping Strategies: For scalping strategies, where traders aim to profit from small price movements within a single trading session, knowing the typical DTR can help set reasonable profit targets and stop-loss levels.
Confirming Trend Strength: In day trading, you may encounter short-term trends. Use ATR to assess the strength of these trends. If the ATR is rising, it suggests a strong trend, while a declining ATR may indicate a weakening trend or potential reversal.
Risk Management: Both ATR and DTR can aid in risk management. Determine your position size based on the current ATR value to align it with your risk tolerance. Additionally, understanding the DTR can help you avoid overtrading during periods of low volatility.
Combine with Other Indicators: ATR and DTR work well when used in conjunction with other technical indicators like moving averages, Bollinger Bands, or RSI. Combining multiple indicators can provide a mor
