+ ALMA Trend Detector

Hi, again. Here I have a nice moving average script designed to get you into trends and keep you in trends until the opportune moment comes to exit. And, as with any indicator, or suite of indicators, designed to get one into trends and keep him/her in a trend, they do not do so well in chop/ranging/mean reversion conditions, though I would say this one is better than most, otherwise I wouldn’t be fitting it into my trading system.

This is a huge improvement, in my opinion, over an indicator I found recently, and like quite a bit by samsmilesam, which you can find here:

In this adaptation of his script I changed a bunch of things, but kept the spirit of the indicator true.

This indicator utilizes three different length Arnaud Legoux moving averages, known for being extremely low lag, and incredibly adjustable (though I find the original authors settings excellent).

While he has buy and sell signals triggering regardless of the fast and slow ma’s position to the trending ma, I actually take the trending ma into account. Furthermore, I wouldn’t say I coded in signals indicating buying and selling, but that I coded in signs that answer the question “what kind of trend are we in?” as well as possible ideal trade exits (which couuuuuld also be taken as entries, but aren’t necessarily meant to).

So, the deets on this:

1) 5 period, 20 period, and 70 period ALMAs . Fast, slow and trend. All customizable independent of each other (unlike the sam’s). All three also change color based on their own individual trends.

2) Uptrends are identified when price is closing above the Trend ma, and both Fast and Slow ma’s are above the Trend ma, and vice versa for downtrends. There are in-between points when a trend is not identified, and this is when price closes above or below the Trend ma, but the other two ma’s have not crossed it. Background color is used to identify the trend.

3) Trade exits are based on closing price and Fast and Slow ma’s relative to the Trend ma, once again. To signal exiting an uptrend price must close below both Fast and Slow ma’s and both Fast and Slow ma’s must be above the Trend ma; and vice versa for exiting a down trend. Obviously there may be false signals, but there are fewer signals, and I think it’s a better strategy than most. I prefer to filter out as much noise as possible. There’s little worse in my opinion than an indicator that gives too many false signals, but obviously it’s impossible to remove them all. Some discretion is necessary on the part of the trader.

4) So what does this mean for trade entries? Well, you can certainly enter a trade on a signal for an exit (go long on a short exit signal) if the chart looks good for that. Or you can wait for trend confirmation with the background color, entering on a pullback to the ma’s perhaps. Or you can enter in the “no man’s land” in between trends. If you’ve exited and price continues on trending your best bet would be to wait for a pullback into the ma’s or a s/r level , or look for the next candle that closes beyond the Fast and Slow ma’s. These are just thoughts of mine.

5) Lastly, there are alert conditions set for uptrends, downtrends and both long and short exits!

Enjoy the indicator! I think with some sort of bands or channels for those times when the market is rangebound or in chop, you could really crush it with this.
Phát hành các Ghi chú: A fresh, and imo, much needed update.

Added inputs for turning background color on and off.
Added inputs for turning off both types of exit symbols.
Fudged around with how the indicator determines an exit, and decided to create a second type, so now there is an early exit sign (which shows more frequently, and symbols for those who might want different confirmation to exit (if you're using this script by itself).
I changed some of the default settings for the moving averages, as I like these a bit more.
Also, made the floats for sigma and offset adjustable in smaller increments, so the little arrows are actually useful for adjusting these numbers now. Also makes it a lot easier to fine tune the MA's to your desired preference.
Added a "Quick" MA before I realized I could use price close as an input for crossover/under strategies. Decided to leave it in case you the user might want to use it. It is set to a 1 period, and is not visible by default.

That's all! Hope you like!
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Bình luận

thanks brother
Phản hồi
Thanks for the update. very Good. Liked MA.
Phản hồi
Thanks for sharing this indicator!
Especially, the background colour which helps to locate choppy market without looking to ADX or Choppiness Index..
Phản hồi
Thanks for the share, the background colours are great to keep us out of trouble!
Phản hồi
@croto, Thanks for the positive feedback! Background colors are nice too because they're contingent upon what the specific moving averages are doing, so if you want a cleaner chart, but still want to know what the trend is according to the indicator, you can leave the background on and turn off the MAs.
Phản hồi
cool strategy
Phản hồi
sweet and simple
Phản hồi
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