Forecast by ScanYourStrat
Overview:
This indicator scans historical price data and focus on 3 main characteristics:
1. Momentum of the move
2. Volume changes
3. Proprietary candle scoring system (a scoring based on the candles open and close, wicks and color of the candle)
After it analyzes the above 3 characteristics, it will find the pattern most closely to each one and will make an average Forecast which is the result you see on the chart. They can be all 3 in the same area or across historical data. The length of the price range that you want to analyze is user dependent, based on the Bar calculation length (see below on settings), and then will take the price movements that followed each of the 3 characteristics and It will project it into the future to provide potential price actions as an average forecast. As we all know, certain patterns and sequences, do repeat in the market. From these patterns we can try to forecast what will be the response based on previous data. The closer the past values to the historical data, the more likely the price will continue to move according to the same rules.
How it works:
Once you have set the Bar calculation length and the Forecast length, it will find the closest pattern that fulfills all 3 characteristics as above (either together or separate). Meaning, if you want to look at the last 10 candle bars on the current timeframe, the algorithm will find the pattern that resembles closest in momentum, volume, and candles scores to bring the forecast based on the movement that happened after those 10 candles (average of all 3). For the length of the forecast, you can choose how far into the future you want to look for.
Calculations:
The indicator works by scanning historical price data for the 3 characteristics above, and then forecast based on previous patterns. It uses mainly Pearson correlation calculation, but also, we have included Spearmen and cosine similarity equations to calculate different ways depending on the style of the trader. Essentially, the indicator takes the historical price moves that followed the pattern to forecast what might happen next. It will be an average of all 3 characteristics.
Potential Pitfalls:
This comes with certain problems, choose a pattern to small and you will have too many variables, choose a pattern too long and could limit the results that may not be statistically significant. Each person is encouraged to test depending on the timeframe that you trade. As you change the number of candles and calculations, it will change the forecast path.
How to use:
Each new candle will give you a forecast that may be new or consistent with previous candles. You cannot rely solely on this indicator as no indicator is 100%. Best strategy to work, is to already have some type of zone for demand or supply, or expansion zones or liquidity zones and use this indicator in conjunction to it. This indicator has been tested mainly on the 1 hour but will work on any timeframe. Best settings so far are with Pearson calculation and a length of 12 bars. The forecast line should not be used as an exact replica but more as a trend whether going up or down. The targets although sometimes close, the trader is not encouraged to use the line targets as their entry or stops but more using the above zones to help for those. In addition, the trader can use the option to average the last few candles forecast to see if the movement is consistent as well.
Settings:
-Bar calculation length: will be the X number of candles that the script will look in historical data that resembles the most. (Example chose 3 candles or 10, or 20)
-Forecast length: how many X number of candles that the script will look forward (forecast).
-Average forecast color: you can change the color of the forecast line.
-Multi bar forecast: is a way to bring the previous forecast lines from past candles to see if there is a pattern without having to use the bar replay, the more you candles you choose, the more lines will be available but at the same time making it harder to see.
-Average all on end bar: if you want to average all the forecast lines into one. You can choose the amount of candles that you want to average based on the multi bar forecast.
Disclaimer:
This is still an indicator that is being tested and in no way should be used alone. Currently will be in closed beta to find bugs and to work on accuracy.
The information contained in this script does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts are only for educational purposes!
This indicator scans historical price data and focus on 3 main characteristics:
1. Momentum of the move
2. Volume changes
3. Proprietary candle scoring system (a scoring based on the candles open and close, wicks and color of the candle)
After it analyzes the above 3 characteristics, it will find the pattern most closely to each one and will make an average Forecast which is the result you see on the chart. They can be all 3 in the same area or across historical data. The length of the price range that you want to analyze is user dependent, based on the Bar calculation length (see below on settings), and then will take the price movements that followed each of the 3 characteristics and It will project it into the future to provide potential price actions as an average forecast. As we all know, certain patterns and sequences, do repeat in the market. From these patterns we can try to forecast what will be the response based on previous data. The closer the past values to the historical data, the more likely the price will continue to move according to the same rules.
How it works:
Once you have set the Bar calculation length and the Forecast length, it will find the closest pattern that fulfills all 3 characteristics as above (either together or separate). Meaning, if you want to look at the last 10 candle bars on the current timeframe, the algorithm will find the pattern that resembles closest in momentum, volume, and candles scores to bring the forecast based on the movement that happened after those 10 candles (average of all 3). For the length of the forecast, you can choose how far into the future you want to look for.
Calculations:
The indicator works by scanning historical price data for the 3 characteristics above, and then forecast based on previous patterns. It uses mainly Pearson correlation calculation, but also, we have included Spearmen and cosine similarity equations to calculate different ways depending on the style of the trader. Essentially, the indicator takes the historical price moves that followed the pattern to forecast what might happen next. It will be an average of all 3 characteristics.
Potential Pitfalls:
This comes with certain problems, choose a pattern to small and you will have too many variables, choose a pattern too long and could limit the results that may not be statistically significant. Each person is encouraged to test depending on the timeframe that you trade. As you change the number of candles and calculations, it will change the forecast path.
How to use:
Each new candle will give you a forecast that may be new or consistent with previous candles. You cannot rely solely on this indicator as no indicator is 100%. Best strategy to work, is to already have some type of zone for demand or supply, or expansion zones or liquidity zones and use this indicator in conjunction to it. This indicator has been tested mainly on the 1 hour but will work on any timeframe. Best settings so far are with Pearson calculation and a length of 12 bars. The forecast line should not be used as an exact replica but more as a trend whether going up or down. The targets although sometimes close, the trader is not encouraged to use the line targets as their entry or stops but more using the above zones to help for those. In addition, the trader can use the option to average the last few candles forecast to see if the movement is consistent as well.
Settings:
-Bar calculation length: will be the X number of candles that the script will look in historical data that resembles the most. (Example chose 3 candles or 10, or 20)
-Forecast length: how many X number of candles that the script will look forward (forecast).
-Average forecast color: you can change the color of the forecast line.
-Multi bar forecast: is a way to bring the previous forecast lines from past candles to see if there is a pattern without having to use the bar replay, the more you candles you choose, the more lines will be available but at the same time making it harder to see.
-Average all on end bar: if you want to average all the forecast lines into one. You can choose the amount of candles that you want to average based on the multi bar forecast.
Disclaimer:
This is still an indicator that is being tested and in no way should be used alone. Currently will be in closed beta to find bugs and to work on accuracy.
The information contained in this script does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts are only for educational purposes!
Notes de version:
Update 2.0
In this update, the average all on end bar forecast when combined with the multibar option will allow the forecast to start on the candle that the average starts from and not on the last candle.
In this update, the average all on end bar forecast when combined with the multibar option will allow the forecast to start on the candle that the average starts from and not on the last candle.
Notes de version:
In this update, added ATR box that separates ATR daily and weekly % filled. It will help with knowing if there is still potential movement or not. It separated in %. For example, the ATR of the security is 2$, if it has moved 1$ then it would say 50% filled. The ATR can be calculated daily and weekly on the options. It also adds an option to add ATR on the forecast line. This has the potential to make bigger movements and should be taken with care as it can affect the original forecast line. But does add more options to experiment with.