OPEN-SOURCE SCRIPT
Financial Conditions Traffic Light Indicator
Inspired by TomasonMarkets. Today I am publishing my first Indicator on trading view based on Chicago Fed National Financial Conditions Index (NFCI). The NFCI incorporates 105 financial market indicators, helping gauge whether financial conditions are "tightening" (restrictive) or "loosening" (accommodative).
It is nothing too complex:
Negative RoC of NFCI = loosening conditions = more liquidity = Risk-on
Positive ROC of NFCI = tightening conditions = less liquidity = Risk-off
Additionally:
Using the 28-week Exponential Moving Average (EMA) we identify long-term trends:
NFCI above the EMA: Indicates financial conditions are tight (relative to recent trends).
NFCI below the EMA: Indicates financial conditions are loose. (relative to recent trends).
Strategy logic:
🟢 Risk-on trades (bullish Bitcoin and other high beta assets) when the NFCI has a negative slope AND NFCI is below its 28-week EMA.
🔴 Risk-off trades (bearish Bitcoin and other high beta assets) when the NFCI has a negative slope AND NFCI is above its 28-week EMA.
🟡 Neutral: Happens in two scenarios: NFCI has a negative slope but is above its EMA OR NFCI has a positive slope but is below its EMA.
It is nothing too complex:
Negative RoC of NFCI = loosening conditions = more liquidity = Risk-on
Positive ROC of NFCI = tightening conditions = less liquidity = Risk-off
Additionally:
Using the 28-week Exponential Moving Average (EMA) we identify long-term trends:
NFCI above the EMA: Indicates financial conditions are tight (relative to recent trends).
NFCI below the EMA: Indicates financial conditions are loose. (relative to recent trends).
Strategy logic:
🟢 Risk-on trades (bullish Bitcoin and other high beta assets) when the NFCI has a negative slope AND NFCI is below its 28-week EMA.
🔴 Risk-off trades (bearish Bitcoin and other high beta assets) when the NFCI has a negative slope AND NFCI is above its 28-week EMA.
🟡 Neutral: Happens in two scenarios: NFCI has a negative slope but is above its EMA OR NFCI has a positive slope but is below its EMA.
Script open-source
Dans l'esprit de TradingView, le créateur de ce script l'a rendu open-source, afin que les traders puissent examiner et vérifier sa fonctionnalité. Bravo à l'auteur! Vous pouvez l'utiliser gratuitement, mais n'oubliez pas que la republication du code est soumise à nos Règles.
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.
Script open-source
Dans l'esprit de TradingView, le créateur de ce script l'a rendu open-source, afin que les traders puissent examiner et vérifier sa fonctionnalité. Bravo à l'auteur! Vous pouvez l'utiliser gratuitement, mais n'oubliez pas que la republication du code est soumise à nos Règles.
Clause de non-responsabilité
Les informations et les publications ne sont pas destinées à être, et ne constituent pas, des conseils ou des recommandations en matière de finance, d'investissement, de trading ou d'autres types de conseils fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.