Custom setting for the Oversold and Overbought Levels
Replaced B and S with arrows
Cleaned up the code and finalized the indicator.
*Unless there is a real need, this indicator will not be revised further.
study(title="UCS_DMI Stochastic Extreme_V2", shorttitle="DMI-Sto-E_V2", overlay=false) // Wells Wilders MA wwma(l,p) => wwma = (nz(wwma) * (l - 1) + p) / l // Inputs DMIlength = input(10, title = "DMI Length") Stolength = input(3, title = "DMI Stochastic Length") os = input (10, title = "Oversold") ob = input (90, title = "Overbought") // DMI Osc Calc hiDiff = high - high loDiff = low - low plusDM = (hiDiff > loDiff) and (hiDiff > 0) ? hiDiff : 0 minusDM = (loDiff > hiDiff) and (loDiff > 0) ? loDiff : 0 ATR = wwma(DMIlength, tr) PlusDI = 100 * wwma(DMIlength,plusDM) / ATR MinusDI = 100 * wwma(DMIlength,minusDM) / ATR osc = PlusDI - MinusDI // DMI Stochastic Calc hi = highest(osc, Stolength) lo = lowest(osc, Stolength) Stoch = sum((osc-lo),Stolength) / sum((hi-lo),Stolength) *100 plot(Stoch, color = blue, title = 'Stochastic', linewidth = 2, style = line) crossUp = Stoch < os and Stoch > os ? 1 : 0 crossDo = Stoch > ob and Stoch < ob ? 1 : 0 plot (ob, color = gray, linewidth = 1, title = 'Over Bought') plot (os, color = gray, linewidth = 1, title = 'Over Sold') plotchar(crossUp, title="Crossing Up Signal", char='⇑', location=location.bottom, color=green, transp=0) plotchar(crossDo, title="Crossing Down Signal",char='⇓', location=location.top, color=red, transp=0)
Theory is find stocks in extreme oversold while the long term is Bullish and vice versa. I would ignore the first buy trigger. And would like ignore the last buy trigger, which can be predicted to an extent, but not 100%. Keep your risk intact and play it with caution.
Simple strategy ideal for any beginner, who is willing to play oversold / overbought. In my books, a single timeframe oversold / overbought does not make sense, unless such happens against the trend.