SMA brainautotech

3 ngày trước

Overview
The SMA Strategy is a robust trend-following tool designed for versatile application across various timeframes and markets, including stocks, forex, futures and cryptocurrencies. It works on the cross over of sma line with a green confirmation candle. It provides traders with "buy ( LE )" ‘’DLE’’ ‘’DSE’’and "sell ( SE )" signals, take profit (TP) signals, stop loss ( SL ) and volume spike indications. This indicator aims to help traders identify potential trading opportunities through trends, reversals and price exhaustion.

Key Features
Buy( LE ) and Sell( SE ) Signals: SMA Strategy generates green "LE" and red "SE" signals based on a trend strength score derived from an aggregation of components.

Take Profit (TP) Signals: The indicator plots black "TP" signals at areas of price exhaustion.

Volume Spike Indicators: The indicator colors candles to signify high volume spikes—light green for high bullish volume and light red for high bearish volume.



How it works:
Trend Strength: This score is calculated using a proprietary formula that assesses the magnitude and direction of market movement with standard deviation and regression analysis.
SMA computes the average price over a specified period and then calculates the standard deviation of prices from this average. A linear regression is performed on the closing prices over a specified period. The slope of the regression line is used to identify the trend direction, and the standard deviation is used to assess trend stability and filter out noise, working together to clearly identify direction and robustness. Bull/Bear signals are produced based on trend strength reaching specific thresholds, configurable in the settings.

Overbought/Oversold Strength: This strength identifies price exhaustion using a unique formula that aggregates values from indicators as SMA line. SMA captures price trends providing a comprehensive view of market conditions. Take profit signals are plotted at points of high price exhaustion, indicating optimal exit prices.

Volume Analysis: Volume spikes are identified and highlighted with colored candles using an ATR calculation that pinpoints outliers in volume. This is calculated using the math.abs function, identifying volume spikes in crossover of 0 line. Volume spike candle size can be configured in settings to the user's liking.






Utility
This tool provides traders with valuable information for trend-following and reversal strategies across different timeframes. It helps traders by:


-Generating "le" and "se" signals to indicate potential long, short and exit points. The precise calculation methods and statistical components used in deriving the trend strength score are designed to filter out market noise and provide a clear indication of prevailing market trends.
-Providing "TP" signals at areas of price exhaustion, areas where taking profit is optimal. These also serve as potential reversal points in the market as they incorporate reversion analysis techniques.
-Highlighting high volume spikes with colored candles to indicate significant market activity. These volatile candles can indicate a significant and rapid surge in price.
-Offering visual insights through Bollinger Band clouds, which help traders assess overbought and oversold conditions on a broad scale. These aid in visualizing potential reversals in the market.


Rationale and Benefits of Component Combination
The combination of trend strength, overbought/oversold strength, volume analysis.
-Trend Strength identifies and confirms the direction and magnitude of market trends, offering clear buy and sell signals. A trend score is calculated to clearly identify where price is strongly trending and where it is quite weak. This customizable feature allows traders to configure this indicator to their liking by only plotting signals when the trend reaches a desired threshold.
-Overbought/Oversold Strength pinpoints areas of price exhaustion, providing crucial take profit and reversal conditions in the market. I combine sma line to provide a more robust reversion score. My rationale for this is to leverage data from multiple indicators, to ensure a comprehensive assessment of price exhaustion rather than relying on a single source.
-Volume Analysis highlights significant market activity, giving traders insights into potential price movements. This feature is included to provide users with a visual representation of price pumps/dumps, that can aid in trading decisions in combination with entry and exit signals.


Uniqueness:
This strategy stands out due to its innovative integration of standard deviation and regression analysis, offering traders a unique and comprehensive market analysis tool. By combining sma to measure volatility and filter out noise with regression analysis to identify trend direction and strength, it provides insightful trend signals that help traders make informed decisions. This indicator's versatility is enhanced by its customizable settings, allowing traders to adapt it to their specific needs and trading styles with the trend sensitivity setting. Combining sma line for reversion and exit points is unique as it integrates multiple perspectives on price momentum and volatility, providing a more comprehensive assessment of price exhaustion than using any single indicator.
By integrating these components, it delivers a multifaceted tool that addresses various aspects of market analysis, making it a valuable asset for traders seeking to improve their decision-making process.


Disclaimer
Trading involves substantial risk and is not suitable for every investor. This indicator is designed to assist in decision-making but does not guarantee profits or prevent losses. Always conduct your own research and consider seeking advice from a financial professional.
Jan 01, 2025
Release Notes
Updated code to ensure signals fire on bar close to avoid repainting


Invite-only script
Access to this script is restricted to users authorized by the author and usually requires payment. You can add it to your favorites, but you will only be able to use it after requesting permission and obtaining it from its author. Contact brainautotech for more information, or follow the author's instructions below.
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Author's instructions
″DO NOT request access in the comment's section. Please visit brainautotech.com/ to gain access to this indicator.
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