Trend Strength Meter

The Trend Strength Meter (TSM) is a powerful and versatile indicator designed to help traders identify market trends, measure their strength, and detect potential reversals with ease. This indicator combines the power of moving averages, divergence detection, and a clean, customizable dashboard to provide actionable insights for traders of all levels.

How It Works

Trend Strength Calculation:

1. The TSM calculates the trend strength using the difference between two Exponential Moving Averages (EMAs): a fast EMA (default: 20) and a slow EMA (default: 50).

2. The difference is expressed as a percentage of the slow EMA, providing a clear measure of the trend's strength and direction.

Histogram Visualization:

1. A color-coded histogram visually represents the trend strength:
Green: Bullish trend
Red: Bearish trend
Gray: Neutral or no significant trend
2. A smoothed trend strength line (SMA of the trend strength) is also plotted for better clarity.

Divergence Detection:

1. The indicator detects bullish and bearish divergences using the RSI (Relative Strength Index) and price action.
2. Bullish Divergence: Price makes a lower low, but RSI makes a higher low, signaling potential upward momentum.
3. Bearish Divergence: Price makes a higher high, but RSI makes a lower high, signaling potential downward momentum.

=> Divergences are marked with arrows on the chart:
Green Arrow: Bullish divergence
Red Arrow: Bearish divergence

Dashboard:

1. A clean and informative dashboard displays key information:
Trend Strength Value: The current strength of the trend
Trend Direction: Bullish, Bearish, or Neutral
Last Signal: Buy, Sell, or None (based on divergence signals)

The dashboard is fully customizable and can be positioned anywhere on the chart (e.g., top-right, bottom-left, center, etc.).

Key Features

1. Trend Strength Measurement: Quickly identify the strength and direction of the trend.

2. Divergence Detection: Spot potential reversals before they occur with bullish and bearish divergence signals.

3. Customizable Dashboard: Move the dashboard to your preferred location on the chart for better visibility.

4. User-Friendly Design: Clean visuals and intuitive color coding make it easy to interpret market conditions.

5. Actionable Signals: Provides clear Buy/Sell signals based on divergence, helping traders make informed decisions.

How to Use

1. Trend Confirmation:

Use the histogram and trend strength value to confirm the current market trend.
Green bars indicate a bullish trend, while red bars indicate a bearish trend.

2. Divergence Signals:

Look for divergence arrows (green for bullish, red for bearish) to anticipate potential reversals.

Combine divergence signals with other technical analysis tools for higher accuracy.

3. Dashboard Insights:

Monitor the dashboard for real-time updates on trend strength, direction, and the latest signal.
Use the "Last Signal" (Buy/Sell) to validate your trading decisions.

4. Custom Settings:

Adjust the EMA lengths and divergence lookback period to suit your trading style and timeframe.
Position the dashboard anywhere on the chart for convenience.

Best Practices

1. Use the TSM in conjunction with other indicators or price action analysis for confirmation.
2. Test the indicator on different timeframes to find the one that works best for your strategy.
3. Always practice proper risk management when trading.

Disclaimer

This indicator is a tool to assist in technical analysis and should not be used as a standalone trading strategy. Past performance is not indicative of future results. Always conduct your own research and consult with a financial advisor before making trading decisions.