Psychological Line

The Psychological Line (PL) Indicator is a sentiment-based oscillator that measures the market's psychological strength by comparing the number of up-closing bars to the total number of bars over a specified period. It provides insight into market sentiment, helping traders identify overbought or oversold conditions, trend strength, and potential reversals.

Description for Your Public Release (TradingView/NinjaTrader)
Indicator Name: Psychological Line (PL)
Category: Oscillator / Market Sentiment

What It Does:
The Psychological Line calculates the percentage of bars closing higher than the previous bar over a defined period.
It ranges between 0% and 100%, where values above 70% suggest overbought conditions, and values below 30% indicate oversold conditions.
It helps traders identify trend strength and possible reversal points when combined with other indicators like moving averages or volume analysis.
How to Use It:
Overbought & Oversold Levels: A high PL value (e.g., above 70) suggests bullish exhaustion, while a low value (below 30) signals bearish exhaustion.
Trend Confirmation: When PL moves in the direction of price trends, it confirms market momentum.
Divergence Signals: If price makes a new high, but PL does not, it can indicate a weakening trend (bearish divergence) and vice versa for bullish divergence.
Customization:
Adjustable lookback period for sensitivity tuning.
Optional smoothing (e.g., moving average) for noise reduction.
Best Used For:
Short-term intraday trading to identify extreme market conditions.
Swing trading for catching momentum shifts.
Confluence trading when combined with trend-following indicators.