[blackcat] L3 Banker Fund SentimentLevel: 3
Background
If you like my banker fund series indicators, this may be another helpful one which describe banker fund sentiment with price and volume infomation.
c.
Function
Use price (major EMAs and SMAs) and volume infomation to model banker fund in a sensitive way which can be called banker fund sentiment. This was realized by a form of oscillator and 0 axis is an important boundary to define bull and bear senmtiments. I use different kind colors of columns to distinguish them.
I summarize how to use it in 1D timeframe:
1. When a fuchsia column appears below the 0 axis, start paying attention and watch for a bullish reversval around.
2. When a red column appears on the first day above the 0 axis, it is a signal of confirmed bullish trend.
3. There is a retraced in the middle and start doing T+0 trading to reduce costs.
4. When the pile of columns ( banker fund energy) breaks through the previous high in the late stage of the retracement, start to increase the bullish position, and be a short-term bullish relay, this is the best buying point!
5. Wait for 3-4 days to start reducing or flatting positions, and make your own decisions according to your personal risk preferences!
Remarks
When the pile of column breaks through the previous high point in the late stage of the retracement, and if the stock is a recent hot sector or concept stock,
Then increase your position and wait for the main force to pump! This indicator may not work alone, you should consider to combine your knowledge of other skills, e.g. candle pattern, news analysis etc.
B: long entry, green
S: short entry, red
column color
bullish trend: red color
confirmed bullish trend: maroon color
bullish retracement: blue color
bearish trend: green color
bearish retracement: fuchsia color
Feedbacks are appreciated.
Blackcat1402
[blackcat] L3 Super Best Cost LineLevel: 3
Background
As suggested by @hedan1, he made a suggestion: this indicator can be further optimized to develop a dull line to filter the overall direction, and then use the sensitive line as a confirmation signal to enter.
One of my favourite tool to see fast trends which is simple but powerful. It runs under below market logic.
Function
With @hedan1's idea, the 1st thing i come up with is a two-layer structure: the inner sensitive part is the best cost line indicator, the outer layer is a supertrend indicator to control the overall trend direction.
Best cost line is a tool to model the people's mood and preference in the market. I define a typical price as wcx, when wcx is above the best cost line, which means traders are willing to use higher price to buy, then if you long, you are following the trend and make profit. On the other hand, if wcx is below the best cost line, which means traders are NOT willing to pursue higher price (maybe due to continous stop loss or sth other), then you should at least not long or if you are agressive in style, you may consider short.
That is it. Do you think it is simple and powerful enough?
Remarks
L: long entry, yellow
XL: close long, fuchsia
S: short entry, green
XS: close short, red
inner bullish: yellow color
inner bearish: fuchsia color
outer bullish: green color
outer bearish: red color
inner indicator : the best cost line
outer indicator : supertrend
also, i improved the display fucntinon remove some blur lines with linebr feature.
Feedbacks are appreciated.
[blackcat] L1 Chop ZonesLevel: 1
Background
I was inspired by NILX's "Tool: Chop & Trade Zones". This can used as an element for trading system control.
Function
I use my own customized algorithm to replace that core of NILX one, which is targetting to provide smoother and trend for chop and trend judgement.
Since it is quite differnt now but an oscillator within range of 0~100. The pro is it can use the contstant threshold values for all time frames and all trading pairs now.
Remarks
Feedbacks are appreciated.
[blackcat] L3 RSIVWAPLevel: 3
Background
This ia a very interesting low timeframe (TF) RSIVWAP indicator.
Function
RSI VWAP combination usually bring good results under low TF. Here is my private version of RSIVWAP with strength color indications.
The RSI shows different signals on different time frames.For example, In 5 minutes there is a buy signal. In the daily chart it shows a sell signal. Now tell me which one is right? RSI or other indicators are pretty less effective and not 100% reliable when it comes to intraday trading. So, combo of both is my intention to improve the situation. BTW, divergence indicators are added also, though they are not so reliable udner some case. However, you can turn them off in settings.
Remarks
Feedbacks are appreciated.
[blackcat] L1 Volume DynamicsLevel: 1
Background
Use the difference of Jurik MA and SMA equivalent (ALMA) to observe something new for volume.
Function
Trading volume is an important technical indicator that is not easy to see the law. I try to match the trading volume with the deduction theory, and the deduction double-average theory is matched with the measurement capacity. I will compare the two moving averages of ultra-short-term, short-term, medium-term and long-term. The faster moving average I choose is Jurik MA (JMA), because it is faster than EMA under the same parameters, and the smoothing effect is very good. In addition to the slow moving average, I use ALMA to benchmark SMA. Because the smoothing properties of ALMA are better. A law is used here, that is, the equivalent relationship between ALMA and SMA is approximately a Fibonacci sequence. I can dynamically apply this amount to the Bitcoin market and see some interesting phenomena.
What is double average volume? According to normal circumstances, JMA will follow the transaction volume faster than SMA. The transaction volume is normally rising above the double average volume, and the transaction volume is normally falling below the double average volume. When the SMA follows the trading volume faster than the JMA, it is abnormal (usually occurs in the divergence segment), that is, the JMA is above the SMA, but the trading volume is below the SMA (the bottom divergence volume pile), the top divergence volume pile is the opposite process. The trading volume is between the double average volume, which is the finishing volume energy. It can be used in the breakthrough of the box and the bottom of the pot. By comparing the strength of the current trading volume with the strength of the trading volume on the upper edge of the box or bottom structure, it can improve the success rate of predicting the breakthrough, especially for the observation effect of large funds latent.
Remarks
Feedbacks are appreciated.
[blackcat] L3 Jurik MACDLevel: 3
Background
Use Jurik MA to build MACD and many people need to judge the market trend against the main candlestick chart when using MACD .
Function
First of all, the MACD function is built with Jurik MA and ALMA for better performance.
Second, the principle of MACD is the difference between EMA's long-term and short-term values. So, I wonder if it is possible to use EMA to construct a set of candle charts that are similar in proportion to MACD values for overlapping comparisons? Because this can greatly facilitate traders to make quick trend judgments. So I used the 3-8 lines of EMA to simulate the KD of KDJ, constructed a set of candle charts, and generated buying and selling points through conditional constraints. Do you like this MACD + Candlestick chart?
Key Signal
Traditional Jurik MACD output signal
Candlesticks
Near Top --> Top is reached and reversal may happen soon. (fuchsia labels)
Near Bottom --> Bottom is reached and reversal may happen soon. (yellow labels)
Remarks
Feedbacks are appreciated.
[blackcat] L3 SupertrendX MTFLevel: 3
Background
A supertrend is a trend-following indicator, similar to moving averages. It is plotted against price and the current trend can be determined simply by its placement against price. It is a very simple indicator and is constructed with only two parameters - period and multiplier.
Function
This is my private version of supertrend, so I named it supertrend X. My intention was improving the inherent lag issue of supertrend indicator. It may be improved under some scenarios and may be the same as TradingView official supertrend with the same set of parameters.
Remarks
I use different color to scoring trend strength with scores ranging from 0 to 100.
0 exhibits blue color
25 exhibits green color
50 exhibits yellow color
75 exhibits red color
100 exhibits fuchsia color
others exhibit gradient color
Feedbacks are appreciated.
[blackcat] L1 True Range Adjusted EMA (TRAdj EMA) Level: 1
Background
In Traders’ Tips in January 2023, Vitali Apirine published an article in the January 2023 issue, “True Range Adjusted Exponential Moving Average (TRAdj EMA)”.
I use pine v4 to script it.
Function
Vitali Apirine's article True Range Adjusted Exponential Moving Average (TRAdj EMA) presents how a security's True Range, which measures volatility, can be integrated into a traditional exponential moving average. The trend following indicator called True Range Adjusted Exponential Moving Average (TRAdj EMA) applied with different lengths can help define turning points and filter price movements. By comparing the indicator to an exponential moving average of the same length, the trader can gain insight into the overall trend.
Remarks
Feedbacks are appreciated.
[blackcat] L3 Best Cost LineLevel: 3
Background
One of my favourite tool to see fast trends which is simple but powerful. It runs under below market logic.
Function
Best cose line is a tool to model the people's mood and preference in the market. I define a typical price as wcx, when wcx is above the best cost line, which means traders are willing to use higher price to buy, then if you long, you are following the trend and make profit. On the other hand, if wcx is below the best cost line, which means traders are NOT willing to pursue higher price (maybe due to continous stop loss or sth other), then you should at least not long or if you are agressive in style, you may consider short.
That is it. Do you think it is simple and powerful enough?
Remarks
Feedbacks are appreciated.
[blackcat] L2 Auto MTF Pivot Forecast Level 2
Background
A algo for pivot points forecast for each bar of automatic multiple timeframe (MTF) data.
Function
In financial markets, a pivot point is a price level that is used by traders as an indicator of market movement. Pivot points are averaged from important prices (highest, lowest, closing) based on the market performance of the previous time period. There are many ways to calculate the pivot point. The pivot point is calculated using the highest price (H), the lowest price (L) and the closing price (C) of the previous time period, and sometimes the opening price of the current time period Valence (O) was added to it.
S1 yellow
S2 white
R1 Orange
R2 fuchsia
The smoothing parameter default to 55
The pivot point indicator can be used in two ways. First, the pivot point can be used as a price trend confirmation. It is generally believed that if the price is above the pivot point in the latter period of time, the market is considered to be in a bull market sentiment, otherwise it is considered to be in a bear market sentiment. Second, support and resistance levels are mainly used as exit positions. For example, R1 and R2 can be used as trade targets if the market price breaks above a pivot point. If the market effectively breaks R1 and R2, traders may consider adding to their long positions.
Remarks
Feedbacks are appreciated.
[blackcat] L2 Low TF Pivot Forecast Level 2
Background
A algo for pivot points forecast for each bar and its low tf data.
Function
In financial markets, a pivot point is a price level that is used by traders as an indicator of market movement. Pivot points are averaged from important prices (highest, lowest, closing) based on the market performance of the previous time period. There are many ways to calculate the pivot point. The pivot point is calculated using the highest price (H), the lowest price (L) and the closing price (C) of the previous time period, and sometimes the opening price of the current time period Valence (O) was added to it.
S1 yellow
S2 white
R1 Orange
R2 fuchsia
The smoothing parameter default to 55
The pivot point indicator can be used in two ways. First, the pivot point can be used as a price trend confirmation. It is generally believed that if the price is above the pivot point in the latter period of time, the market is considered to be in a bull market sentiment, otherwise it is considered to be in a bear market sentiment. Second, support and resistance levels are mainly used as exit positions. For example, R1 and R2 can be used as trade targets if the market price breaks above a pivot point. If the market effectively breaks R1 and R2, traders may consider adding to their long positions.
Remarks
Feedbacks are appreciated.
[blackcat] L3 Low TF ScalperLevel 3
Background
Low time scapling is a challenge, I am always working on developping better scalper for low timeframe (TF)
Function
Lower time frame trading is known as scalping. It is often considered as a risky strategy as you have a small margin to make a mistake. In fact, you have to get the best trading accounts for the scalp. Choosing a faulty account and trying to earn money with the low-end tools will result in big losses.
This is a simple but powerful scalper which may need you to set up reference look back period e.g. "3D" == 3 days, or "5D" == 5 days,high of high and low of low as basic resistance and support levels. Because if you set up proper look back parameter as a string of resolution , it is simple but valid levels for your to judge whether price is in oversold or overbought status.
I use green labels 'B' to indicate oversold buy based on look back period set and red labels "S" inidcating overbought sell based on look back period parameter as well.
Remarks
Free but closed source.
Feedbacks are appreciated.
[blackcat] L2 Handicap Volume for StocksLevel 2
Background
Handicap volume is a way to understand market logic.
Function
I have studied many classic trading textbooks about volume. Most textbooks tell me that the most authentic indicator in the world is the trading volume, because other things can be faked, but the trading volume is real, and the real money is there, so it cannot be faked! But now, almost everyone knows that if you place an order there, and then eat it yourself, and the volume comes out, it does not reflect the real long-short will of the market.
So why is volume still considered the most important technical indicator by many successful traders in the stock market? Here is to distinguish from the duration and intensity of the trading volume, the actions of the main whales. It's like in the sea, small fish and shrimp can only create ripples, while whales can set off huge waves. When you need to fish, you must go to the sea with both ripples and huge waves. If the volume of a stock or a currency can fluctuate evenly or pulse ECG, the price will move unnaturally, and it will also be small fluctuations or ECG. This corresponds to a group of small fish and shrimp retail investors gathering, or stocks or altcoins with high control of whales, these two cannot participate. Otherwise, either your money will be wasted there, or you will be taken over by the unscrupulous project party with high control area.
This technical indicator is the handicap trading volume and turnover rate indicators. You can see clearly the type of funds operating on this target in a suitable time period, and thus determine whether this target is in line with your trading style and whether you want to participate Among them and so on.
My technical indicator is mainly to clearly see whether there are main whales participating in the stock by distinguishing the trading volume and the enlarged turnover rate. Its main purpose is to judge the character of the stock, that is, the nature of the stock. And in the yellow and purple positions with high turnover rates, it prompts the behavior of the main whales. This is just a reminder. As for whether the main whale will attack or retreat, you need to conduct an in-depth analysis based on market logic. This analysis data has gone beyond the scope of ordinary candle chart analysis, and requires additional dimensions of information to assist judgment.
Remarks
Feedbacks are appreciated.
[blackcat] L3 YACD38Level 3
Background
"3/8 moving average" golden cross enters, and dead cross exits.
Function
This set of methods is an improved moving average usage - "38 moving average usage", we need to use three moving averages:
3-day, 8-day and 21-day moving averages.
Why is it the 3-day, 8-day, and 21-day moving averages? Most of my friends may not be clear. 3, 8, and 21 are all Fibonacci numbers, also known as the golden section numbers. The Fibonacci number is a basic pattern of nature, which exists in all things. If you don’t understand it, you can go to a certain degree to understand it. In short, it is a very magical existence.
Keep in mind the principle of only doing uptrends and not downtrends. Then we have to use our 21-day moving average skillfully. The 21-day moving average happens to be the average price line for one month. We take it as the decision-making line. When the decision-making line goes down or goes flat, we mainly wait and see; , the operation success rate is higher!
Let's directly share the technical points of "38 moving average usage":
1. Entry point: the 3-day line crosses the 8-day line to form a golden cross, or both the 3-day and 8-day line cross the 21-day moving average; the position of the golden cross must be above the 21-day moving average, and it is invalid if it is below;
2. Basis for holding shares: After entering the market, the moving averages are arranged in a long position, and the K-line rises along the 3-day and 8-day moving averages, hold it patiently, and sell for whatever reason you buy!
3. Exit point: When the 3-day moving average crosses the 8-day moving average to form a dead cross, or the 3-day and 8-day moving averages break below the 21-day moving average, then decisively leave the market;
Note: "38 moving average usage" only needs to refer to the moving average, and the other most reference quantities can be changed. As long as the above conditions are met, you can boldly intervene, and after the intervention, you will rise to the top! Don't underestimate the usage of this set of moving averages, carefully comprehend and memorize them by heart, and be able to achieve the unity of knowledge and action, and you will be able to stand up and be the master from now on!
Remarks
Feedbacks are appreciated.
[blackcat] L3 Bull ChannelLevel 3
Background
This is a bullish channel with spikes for long entries. Optimized for 4H time frame.
Function
This indicator places a fast and smooth lines into a channel for 4H time frame. The channel can work as overbought and oversould threshold for judgement. Also, the fast and smooth (green , red lines) will cross together and you can judge short term momentum with their cross status as golden cross or dead cross status.
For the color definitions:
Output upper_rail = 21-day moving average of the highest price*1.05, draw upper_rail
Output lower_rail = 21-day moving average of the lowest price*0.95, painted yellow
Output smooth_trend = 5-day moving average of the lowest price, painted red
Output fast_trend = 2-day moving average of the closing price, painted green
Output swing_long = If fast_trend wears smooth_trend, return upper_rail*1.05, otherwise return smooth_trend, draw red
Output leader_long = If fast_trend wears upper_rail, return upper_rail*1.10, otherwise return lower_rail, draw orange
Remarks
Feedbacks are appreciated.
[blackcat] L1 N-Shape AttackLevel 1
Background
At the beginning of the stock price rise, the stock form is a buying point in the "N" shape.
Function
This form is the same as the "N" shape. What is pursued is the strength of the skyrocketing rise after the sharp rise and fall. The adjustment time in the middle of the N shape must not exceed 3-4 days! If it is an aggressive Changyang, the total adjustment cycle must not exceed 5 days. A simple summary is: skyrocketing + quick callback + skyrocketing again! There has been a solid sun candle in the early stage, and a real sun candle appeared again after a few days of adjustment.
Key points of the N-shaped attack pattern:
1. The shorter the adjustment time, the better, indicating that individual stocks are already quite strong, and the rush to raise funds is quite obvious. It is best to only adjust for 1 day. The most extreme is a big rise and then a big fall and then a big rise. This is the most ideal. Adjust on 2 days and then follow. It is best to adjust the number of days below 5 days. The longer the adjustment time, the less obvious the effect.
2. The smaller the adjustment range, the better, and it is better if the lowest point during the adjustment period does not fall below the lowest point of the previous big rising candle.
3. It is more ideal if the closing price of the latter surge is higher than the highest price of the previous surge, and it is even more ideal if it exceeds the height of the adjustment period.
4. When selecting stocks, try to select stocks whose 20-day and 60-day moving averages have started to rise, preferably in a long-term arrangement.
Market logic of N-shaped attack:
The main force took advantage of the opportunity to pull out the first big positive candle in the early stage, and then took advantage of the profit taking or the index pullback, and there was a rapid 1-3 day downward kill, just returning to the initial position of the previous big positive candle, and then increased the volume again Rising to new highs.
Remarks
The long signal frequency is low.
Feedbacks are appreciated.
[blackcat] L2 Bull-Bear MomentumLevel 2
Background
Momentum effect is generally called "inertia effect". Momentum effect was proposed by Jegadeesh and Titman (1993), which refers to the tendency of the return rate of the stock to continue the original direction of movement, that is, the return rate of the stock with a higher return rate in the past period will still be higher than the return rate in the past low-yielding stocks.
Function
The Bullish and Bearish Momentum Technical Indicator is a strategy for buying and selling by analyzing the strength and weakness of recent price trends. Traders seek to take advantage of the rising or falling trend of stock prices. When this technical indicator indicates that the stock is entering a strong upward trend, the trader will buy the stock; Will choose to short the stock.
In short, momentum trading is trading with the trend. Momentum trading is based on the idea that if there is enough momentum behind the current price action, it will continue to move in the same direction. When an asset reaches a higher price, it usually attracts more investor attention, driving up the market price. The price rise continues until sellers start to enter the market consistently, and once sellers slowly outpace buyers, momentum weakens and the trend may reverse.
I have not marked special tags for this indicator usage. Users are expected to define according to their own understanding. On the whole, the basic usage is to start long positions when the first green column appears; when the first red column appears, close long positions or open short positions.
Remarks
Feedbacks are appreciated.
[blackcat] L2 Dragon CloudLevel 2
Background
In addition to characterizing the trend through the special parameter SAR, this dragon cloud indicator also indicates that it is currently in the corresponding stage of the bull and bear market through the cloud layer of the large parameter.
Function
The SAR indicator characterizes short-term trend changes and provides swing buying and selling points. Red crosses and candles represent declines and their strength; green crosses and candles represent rises and their strength. At the same time, this technical indicator can judge which stage the market is currently in through the thickness of the bear cloud and the thickness of the bull cloud. When the blue cloud layer on the main picture is relatively thick, it means that it is in a deep bear market; as the blue cloud becomes thinner, and the red cloud is edited, it means that the bull-bear power game is in the process of transformation. The red cloud indicates the strength of doing more, and when its thickness is greater than the blue cloud, it means that the bull market is coming!
Remarks
Feedbacks are appreciated.
[blackcat] L1 Simple Buy BackLevel 1
Background
This indicator models the situation before banker fund or whales lurking, buying chips, and about to pull up. This is the simplest version of blackcat L1 Buy Back indicator with only single line of core code.
Function
When is the time to buy, even if you know that whales are accumulating, but how long it needs to be lurking, and when it will rise is unknown. This indicator has been conditionally modeled through statistical high probability events, and the main judgment is that it is the key to step back before rising The bit, once the signal appears, will be pulled up.
Remarks
Feedbacks are appreciated.
[blackcat] L3 Golden Buy BackLevel 3
Background
This indicator models the situation before banker fund or whales lurking, buying chips, and about to pull up. This is an improved version of blackcat L1 Buy Back indicator.
Function
When is the time to buy, even if you know that whales are accumulating, but how long it needs to be lurking, and when it will rise is unknown. This indicator has been conditionally modeled through statistical high probability events, and the main judgment is that it is the key to step back before rising The bit, once the signal appears, will be pulled up.
This includes: using a moving average of custom parameters (the parameters of this key moving average need to be found through backtesting for different markets and trading varieties) as the basis for the main characterization of large-capacity trading behavior. Then build a model through the volume-price relationship:
1. There is a feature that the lowest price is lower than the moving average after the downward pressure of large funds.
2. The closing price must effectively stand above the moving average.
3. The ratio of closing prices for two consecutive days is less than the moving average value.
4. The moving average is just above the heavy volume , and the volume ratio meets certain requirements, indicating that it is a feature of heavy volume . (Amplified volume is an important manifestation of banker fund action)
Here I used different background color to section a swing trading period.
1. yellow bgcolor indicates a trigger or start of a bullish swing.
2. red bgcolor indicates a buy back signal after a price retracement.
3. green bgcolor indicates a destroy or end of a bullish swing
4. blue bgcolor indicates a bullish swing period.
Remarks
Feedbacks are appreciated.
[blackcat] L1 Beauty ShoulderLevel 1
Background
A classic candle pattern : beauty shoulder.
Function
Beauty shoulder, as the name suggests, is that the trend of the candle chart is like a beauty shoulder. The most important feature of the beauty shoulder pattern is that after it reaches the shoulder, it does not wash the market through the downward trend of the stock price, but only by slowing down the rising speed to achieve washing out float chips.Therefore, the shape of the beauty shoulder is not rising from beginning to end, but the acceleration of the rise has changed.
Morphological characteristics:
1. Beauty shoulder is a candlestick pattern. It is usually the trace left by the main force opening up positions. This pattern is encountered by dozens every year, and you will always find it if you look for it carefully.
2. The technical characteristics of the beauty shoulder, the 5-day moving average and the 10-day moving average must continue to form a golden fork.
3. The trend in the first half of the candle chart must present an arch, and only in this way can it be called a beauty shoulder.
4. The candle chart must be above the 60-day moving average. It is best to hang it in the air, or a stronger shoulder of the beauty. The candle chart is above the 30-day moving average, so the magnitude of the pull up will become larger.
5. The bottom of the shoulder of the beauty is the part of the consolidation, and the volume must be increased, because the shoulder of the beauty is the result of the main force building a strong position in a short time, so the volume must be increased.
6. The rise of the shoulders of the beauty is very scary, and the increase is usually more than 30%.
Remarks
Feedbacks are appreciated.
[blackcat] L1 Old Duck HeadLevel 1
Background
The old duck head is a classic form formed by a series of behaviors such as bankers opening positions, washing dishes, and pulling over the top of the duck head.
Function
A form of stock candles:
(1) Moving averages using 5, 10 and 60 parameters. When the 5-day and 10-day moving averages crossed the 60-day moving average, a duck neck was formed.
(2) The high point when the stock price fell back formed a duck head.
(3) When the stock price fell back soon, the 5-day and 10-day moving averages again turned up to form a duckbill.
(4) Duck nose refers to the hole formed when the 5-day moving average crosses the 10-day moving average and the two lines cross again.
Market significance:
(1) When the dealer starts to collect chips, the stock price rises slowly, and the 5-day and 10-day moving averages cross the 60-day moving average, forming a duck neck.
(2) When the stock price of the banker shakes the position and starts to pull back, the high point of the stock price forms the top of the duck's head.
(3) When the dealer builds a position again to collect chips, the stock price rises again, forming a duck bill.
Operation method:
(1) Buy when the 5-day and 10-day moving averages cross the 60-day moving average and form a duck neck.
(2) Buy on dips near the sesame point of trading volume near the duckbill.
(3) Intervene when the stock price crosses the top of the duck's head in heavy volume.
The top of the duck’s head should be a little far away from the 60-day moving average, otherwise it means that the dealer is not willing to open a position at this old duck’s head, and the bottom of the old duck’s head must be heavy. Small is better, nothing is the strongest! There must be a lot of sesame dots under the nostrils of the duck, otherwise it means that the dealer has poor control. There must be ventilation under the duck bill, the higher the ventilation, the better!
Remarks
Feedbacks are appreciated.
[blackcat] L3 KAMA Trend Trading SystemLevel: 3
Background
Kaufman’s Adaptive Moving Average ( KAMA ) was developed by American quantitative financial theorist Perry J. Kaufman in 1998.
Function
This is an improved KAMA trading system with my customized algorithm.You can use KAMA like any other trend-following indicator, such as a moving average. You can look for price crosses, directional changes and filtered signals. First, a cross above or below KAMA indicates directional changes in prices. As with any moving average, a simple crossover system will generate lots of signals and lots of whipsaws. Second, You can use the direction of KAMA to define the overall trend for a security. This may require a parameter adjustment to smooth the indicator further. You can change the fastline and slowline parameters to smooth KAMA and look for directional changes. The trend is down as long as KAMA is falling and forging lower lows. The trend is up as long as KAMA is rising and forging higher highs. Finally, You can combine signals and techniques. You can use a longer-term KAMA to define the bigger trend and a shorter-term KAMA for trading signals.
I have included in the indicator an input named "EnableSmooth" that allows you to determine if the KAMA line should be smoothed or not. A "True" as the input value smoothes the calculation. An "False" simply plots the raw KAMA line. When market volatility is low, Kaufman’s Adaptive Moving Average remains near the current market price, but when volatility increases, it will lag behind. What the KAMA indicator aims to do is filter out “market noise” – insignificant, temporary surges in price action. One of the primary weaknesses of traditional moving averages is that when used for trading signals, they tend to generate many false signals. The KAMA indicator seeks to lessen this tendency – generate fewer false signals – by not responding to short-term, insignificant price movements. Traders generally use the moving average indicator to identify market trends and reversals.
Remarks
Feedbacks are appreciated.
