I stumbled upon creating this and thought it was cool and worth sharing. If anyone has ever dabbled with the Aroon or Vortex Indicators, there is some similarity to how it can be used visually.
The indicator basically takes two slopes from the trailing time period you indicate- one from the highest point in that time period, and one from the lowest point. It then plots both.
Here are some of the ways I think this indicator can be used--
Crossover This is the most obvious way, visually. If the blue line crosses under the red, an uptrend has ended or is testing support here. The opposite can be used as well. When the blue line crosses above the red an uptrend is starting or it is testing resistance.
Trending or Ranging If the two bands are moving away from each other/increasing the width between them, there is definite trending action going on. If the two are very narrow or keep crossing each other, whatever symbol you're looking at is likely ranging or consolidating. The black "midpoint" line can also be used to help identify-- if this line is moving up, regardless of if the blue or red band is above, the trend has momentum; if it is going down or flat the previous trend is either slowing greatly or we are ranging.
Support & Resistance Crosses can identify meaningful support and resistance. Having both lines kiss or get very close to the black midpoint line but not cross can also indicate S/R or confirm trend strength.
Here are some snippets of examples I outlined-
I purposely kept this indicator as clean and simple as possible for publication. But I already have tinkered around with taking the output and putting it through the likes of RSI, Stoch, etc. and I think the outcomes are pretty intriguing as well for something so simple. I think dropping the length too much makes it too noisy, so 20, 50, 100 look most useful.
Wow so simple but it seems really effective at my first glance. This is a great base for some awesome variations.
pjay
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Interesting! Thanks for sharing
Maximilianned
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Simple but accurate indicator - thank you for sharing it with the community!
Wish I found it a year ago when you released it!
lcastilloe
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Wow very nice! I am trying to come up with a estrategy to enter as soon as VI+/VI- crosses up a predefined value, however, the fact that it is also showing trending which is great, causes the limit values not to be pretty constant neither as it will vary depending on how much uptrend or downtrend was right before the crossover and the eventual VI+/VI- going out of those upper limits. Not sure if I explain myself.
MacChart
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Very interesting, you mentioned some variations with the RSI, could you post those up please.