Wyckoff Trading Strategy XAU/USD (Gold) Ver 2.0 By KAIZVIETNAM
1. Main Indicators Used
RSI (Relative Strength Index):
Measures the strength and momentum of price using the rsiPeriod (default 14). This value is also used to calculate the Stochastic RSI for identifying overbought/oversold conditions.
Stochastic RSI:
Measures the RSI relative to its range over the stochPeriod (default 14).
Above 80: Overbought condition.
Below 20: Oversold condition.
ATR (Average True Range):
Measures market volatility over 14 periods.
Average Volume:
Uses a Simple Moving Average (SMA) of the volume over the RSI period to identify unusual volume spikes.
MACD:
Used to detect trend reversals based on signal crossovers:
MACD crosses above the Signal Line: Bullish reversal.
MACD crosses below the Signal Line: Bearish reversal.
2. Market Stage Detection
The market stage is determined based on the moving averages, ATR, and MACD:
Uptrend: SMA 50 > SMA 200.
Downtrend: SMA 50 < SMA 200.
Consolidation: Tight price range, determined using ATR.
Reversal: Triggered when MACD shows a crossover (up or down).
Sideway: The default stage when no clear trend exists.
Background Colors for Market Stages:
Purple: Reversal.
Green: Uptrend.
Red: Downtrend.
Blue: Consolidation.
Gray: Sideway.
3. Buy and Sell Signals
Buy Signal:
Triggered when:
Key Support Points are detected:
Preliminary Support: Price forms a temporary low with increased volume.
Selling Climax: A strong down move with high volume.
Last Point of Support: Price is above SMA 14 with low volume.
Stochastic RSI crosses above 20 (oversold condition).
Sell Signal:
Triggered when:
Key Supply Points are detected:
Preliminary Supply: Temporary high with increased volume.
Buying Climax: A strong upward move with high volume.
Sign of Weakness: Price breaks below previous lows with high volume.
Stochastic RSI crosses below 80 (overbought condition).
4. Conclusion
This indicator combines the Wyckoff Trading Strategy with RSI Stochastic and additional tools like volume analysis, ATR, and MACD to:
Identify key market stages (Uptrend, Downtrend, Consolidation, Reversal).
Highlight significant support and supply points (e.g., Preliminary Support, Buying Climax).
Generate clear Buy and Sell signals based on volume, RSI, and Stochastic RSI conditions.
The script is designed for XAU/USD (Gold) but can be adapted for other instruments or markets.
RSI (Relative Strength Index):
Measures the strength and momentum of price using the rsiPeriod (default 14). This value is also used to calculate the Stochastic RSI for identifying overbought/oversold conditions.
Stochastic RSI:
Measures the RSI relative to its range over the stochPeriod (default 14).
Above 80: Overbought condition.
Below 20: Oversold condition.
ATR (Average True Range):
Measures market volatility over 14 periods.
Average Volume:
Uses a Simple Moving Average (SMA) of the volume over the RSI period to identify unusual volume spikes.
MACD:
Used to detect trend reversals based on signal crossovers:
MACD crosses above the Signal Line: Bullish reversal.
MACD crosses below the Signal Line: Bearish reversal.
2. Market Stage Detection
The market stage is determined based on the moving averages, ATR, and MACD:
Uptrend: SMA 50 > SMA 200.
Downtrend: SMA 50 < SMA 200.
Consolidation: Tight price range, determined using ATR.
Reversal: Triggered when MACD shows a crossover (up or down).
Sideway: The default stage when no clear trend exists.
Background Colors for Market Stages:
Purple: Reversal.
Green: Uptrend.
Red: Downtrend.
Blue: Consolidation.
Gray: Sideway.
3. Buy and Sell Signals
Buy Signal:
Triggered when:
Key Support Points are detected:
Preliminary Support: Price forms a temporary low with increased volume.
Selling Climax: A strong down move with high volume.
Last Point of Support: Price is above SMA 14 with low volume.
Stochastic RSI crosses above 20 (oversold condition).
Sell Signal:
Triggered when:
Key Supply Points are detected:
Preliminary Supply: Temporary high with increased volume.
Buying Climax: A strong upward move with high volume.
Sign of Weakness: Price breaks below previous lows with high volume.
Stochastic RSI crosses below 80 (overbought condition).
4. Conclusion
This indicator combines the Wyckoff Trading Strategy with RSI Stochastic and additional tools like volume analysis, ATR, and MACD to:
Identify key market stages (Uptrend, Downtrend, Consolidation, Reversal).
Highlight significant support and supply points (e.g., Preliminary Support, Buying Climax).
Generate clear Buy and Sell signals based on volume, RSI, and Stochastic RSI conditions.
The script is designed for XAU/USD (Gold) but can be adapted for other instruments or markets.
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