Gann's square of 9 overextended indicator

This indicator is inspired by the book “The Definitive Guide to Forecasting Using W.D. Gann’s Square of Nine”. It’s designed to identify overextended price levels in the market.

The indicator uses the concept of Gann’s Square of 9, which is a method for forecasting price movements by observing geometric relationships between price and time. It calculates the square root of the price, then subtracts the square root of a simple moving average of the price. The difference is then converted to degrees to create the indicator values.

The indicator plots four horizontal lines, representing two upper and two lower thresholds. When the indicator crosses these lines, it suggests that the price may be overextended and a reversal could be imminent.

Please note that the Price Multiplier parameter needs to be adjusted for each timeframe and security to ensure accurate results. This is because different securities and timeframes can have different price scales, and the multiplier helps to normalize the price data for the calculation.

The indicator also includes a Moving Average Size parameter, which determines the length of the simple moving average used in the calculation.

This indicator can be a useful tool for traders looking to identify potential reversal points in the market. However, like all indicators, it should be used in conjunction with other forms of analysis and it’s not recommended to rely solely on this indicator for trading decisions.