Innovative Market Direction Signal

25 oct.

The indicator is designed to help traders identify moments when price action, volatility, volume and certain time trends are aligned in a way that signals a high probability entry into the market in one direction or another.

General:
The indicator is superimposed on the price chart (overlay=true), which makes it more convenient for visual analysis of trading signals in the context of price levels.
The user can configure the parameters through the built-in interface (for example, "Lookback Period", "Buy Signal Threshold", "Sell Signal Threshold").
Main components and their functionality:
Parameters for the user:

window_size - the number of bars or candles for calculating various metrics.
buy_threshold and sell_threshold - threshold values ​​for determining buy and sell signals.
Momentum Asymmetry:

The code calculates the difference between positive (upMomentum) and negative (downMomentum) price changes within the selected time window.
Using a loop, it adds or updates values ​​to the corresponding arrays, checking whether the price is increasing (positive change) or decreasing (negative change).
After collecting the data, the average positive and negative price change over the period is calculated, their proportion and input into momentum_asymmetry. This is a measure of how much the current price movement deviates from the high of the current period.
Volatility Analysis:

The ta.tr function is used to calculate the true price range.
Then, the standard deviation (ta.stdev) is used to calculate the volatility over the specified period, which reflects the volatility of prices.
Volume Momentum:

The volume and price change are combined to find the volume momentum (current_volume_momentum).
If the volume is associated with a price increase, it is considered positive, otherwise it is considered negative.
Seasonal and cyclical changes:

The seasonal_index is calculated, which reflects the time between the current timestamp and the beginning of the analyzed time window (window_size), divided by the time between the current timestamp and the previous candlestick.
Combined signal:

All calculated components (momentum asymmetry, volume momentum, volatility and seasonal index) are summed up in combined_signal.
Buy signals (buy_signal) and sell signals (sell_signal) are generated depending on the thresholds set by the user.
Visualization:
The plotshape indicator displays green circles (buy signals) above the bar and red circles (sell signals) below the bar.
The plot function outputs the combined_signal line to visualize the combined indicator.