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+ Magic Carpet BandsFun name for an indicator, eh? Well, it is true, I think; they look like magic carpets. They're actually pretty simple actually. They're Keltner Channels smoothed with a moving average. If you go down to the lookback period for the bands and set it to 1, you'll recognize them immediately.
Digging a bit deeper you see there are four magic carpets on the chart. The inner ones are set to a multiplier of 2, and the outer to a multiplier of 4. Each "carpet" is composed of two smoothed upper or lower Keltner Channels bounds, both with an optional offset, one of which is set to 13, and the other to 0 by default; and an optional color fill between these. There is also a color fill between the outer and inner carpets which gives them an interesting 3-dimensional aspect at times. They can look a bit like tunnels by default.
My thinking around the idea of using an offset with the bands is that if we assume these things to provide a dynamic support and resistance, and previous support and resistance maintains status as support and resistance until proven otherwise, then by putting an offset to past data we are creating a more obvious visual indication of that support or resistance in the present. The default offset is set to 13 bars back, so if price found resistance at some point around 13 bars ago, and price is currently revisiting it we assume it is still resistance, and that offset band is there to give us a strong visual aid. Obviously it's not foolproof, but nothing is.
Beyond that most interesting part of the indicator you have a nice selection of moving averages which the bands are calculated off of. By default it's set to my UMA. The bands themselves also have a selection of moving averages for how the keltner channels are smoothed. And a note: because the UMA and RDMA are averages of different length MAs, they can not be adjusted other than via the multiplier that sets the distance from the moving average.
The indicator is multi-timeframe, and the moving average can be colored based on a higher timeframe as well.
I popped in the divergence indicator here too. You can choose from RSI and OBV, and the divergences will be plotted on the chart. Working on finding a way to be able to have the bands/MA set to a higher timeframe while plotting the divergences on the chart timeframe, but don't have an answer to that yet.
Alerts for moving average crosses, band touches, and divergences.
I like this one a lot. Enjoy!
Pictures below.
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One interesting thing about this indicator is that band twists often occur at areas of support or resistance. Simply drawing horizontal lines from previous twisted points can provide places from which you may look for strength or weakness to enter into a trade, or which you might use as targets for taking profits. The vertical lines are just showing the point on the chart when the cross occurred.
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Above is a Jurik MA with a bunch of adjustments made to the bands, and the moving average itself. Everything is super adjustable, so you can play around and have fun with them quite a bit.
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Just a different MA and bands.
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Stochastic + Keltner Channels for ScalpingSimple arrow indicator, indicating the direction go the next slight movement. This indicator will work on any time frame or market.
How does this indicator work?
It will use Stochastic and Keltner Channels to detect potential reversals depending on the frequency you choose in the indicator's settings. The higher the frequency, the fewer candles will be used in the calculation.
When to use this indicator?
It will work better in higher time frames for low volatility indicators. You can mix with other indicators like RSI or ADX. This way, you will be able to check if the time selected frame has enough volatility to move the price enough to cover the spreads and fees of your broker.
When to exit the trade after the signal from this indicator?
A good target would be for 1x ATR value and stop-loss 2x the ATR value. Doing trailing stop will reduce your risk and secure some profits, but make sure to use values for possible fakeouts
Can this indicator be used alone as the main source of entry signal for the trades?
You can use it alone, but I recommend mixing with other trend-based indicators, like Moving Averages, so you get the best results. Since it's for scalping purposes, small moments, and reversals, it doesn't have the trend filter, but it can work trading in favor of a significant trend as well
this is a better version of my other script Scalping Arrows Indicador
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Keltner Center Of Gravity Channel ( KeltCOG )I have the ambition to create a ‘landscape’ which enables the user to see the ‘mood’ of the market about the price of an instrument, simply by looking where the candles go. Prices are a simple phenomenon , they go up or down or stay the same. This is represented quite well for the short term by a candle. I recommend to study candle patterns. Prices not only fluctuate but also trend up, down or go sideways. The user should analyze this by determining the COG (Center Of Gravity) and the ‘normal’ current range by using the historical data in a lookback period.
As a COG the center line of a Donchian Channel is often used. I.m.o. a COG should be a zone, in this channel I use the gray zone of my Donchian Fibonacci Channel, The ‘normal’ range is a multiple of Average True Range, as used in a Keltner Channel. Combining the two can give a cumbersome result, as one can see in my Keltner Fibonacci Channel. In this KeltCOG channel I solved this by not using all Fibonacci levels and by making the Keltner lines strictly parallel to the nearest COG line. To do this, I use the fact that the COG lines have horizontal stretches, there I make the Keltner lines horizontal too. Only where the COG lines change value, the Keltner lines are recalculated. This way the channel gets a very regular shape with three clear zones.
Interpretation of a chart by using the KeltCOG channel.
Overbought: If the candles go higher then the blue zone, the market is hyper enthusiast, creating an overbought situation. This is often followed by a reversion to the COG.
Uptrend: If the candles form in the blue zone, the market is enthusiast and willing to pay more.
Hopeful: If the candles form in or near the upper uncolored zone, the market is hopeful and is thinking about paying more. Sometimes prices go a little up.
Content: If the candles form in the gray zone, which represents COG, the market is happy with the current prices, so these move sideways
Disappointed: If the candles form in or near the lower uncolored zone, the market is disappointed and contemplates paying less, sometimes prices go a little down.
Downtrend: If the candles form in red zone, the market doesn’t like the instrument at all, rejects the current price and is only prepared to pay less.
Oversold: If the candles form below the red zone, the market overdoes its disgust, creating an oversold situation, often followed by a reversion to the COG.
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Dual Mean Reversion Channel (adjusted lower band)This is a public and open-source lighter version compared to the "Overextended Price Channel" which is provided complimentaty to the Trend Insight System.
Introduction :
Channels are very useful tools to assess overextended price, volatility and upcoming retracement or impulsive moves (such as Bollinger Band squeezes). It is an indispensable addition to any trader using Mean Reversion theory for a scalp-trade or swing-trade.
This script contains :
- 2 channels Keltner-style, using the True Range for volatility
- customizable volatility (channel width) and smoothing period
- a standard selection of moving average ; SMA, EMA, VWMA
- an embedded readjustment of the lower bands to avoid the drop on a logarithmic scale (see explanation below)
Why another channel indicator ?
I have found most conventional channels to be either not based on "proper" volatility (e.g. standard deviation of price action for Bollinger Band), or the bottom channel to be ill adapted to the logarithmic scale and plunges to 0 on some high volatility periods, messing with readability on logarithmic auto-scaled chart.
Also, I find the channels to be most useful when superimposed with another one of longer length; especially a pair of channels with a 50 and 200 period moving average respectively. Mean Reversion traders that mostly trade the 50 and 200 SMA/EMA know what I am talking about as having a channel helps to have a better visual for a proper of entry and exit point.
Disclaimer :
This indicator was originally intended to be used along with the Trend Insight System to improve performance, and the default configuration mostly backtested on BTCUSD.
Please use with caution, proper risk management and along with your favorite oscillator, candlestick reading and signals system.
Some explanation :
Based on Mean Reversion paradigm, everything has a tendency to revert back to the mean :
- when the price enters the upper channel, it is supposed to be (or start getting) overbought as the market is getting overheated, thus prone to correction,
- on the other hand, when the price enters the lower channel, it is supposed to be (or getting) oversold and the market looks favorable for a buy-in.
Depending on the trading style used, a trader will usually either wait until the price leaves the channel towards the mean before taking action (conservative style) or you will set limit orders inside the channel as you expect a reversion to the mean (more agressive/risky style).
With two channels, more complex (and maybe precise) rules can be built to optimize one's trading strategy.
Important notes :
In the end, sticking with 50/200 length and a single setting on volatility might be wiser, be wary of overoptimization which is risky at best and counter productive at worst (according to legendary traders such as Mark Douglas). Even if, needless to say, the volatility needs to be adjusted between a nascent and volatile market (such as crypto) compared to standard call markets that are much less volatile.
End notes :
It will always be considered a work in progress to help bring out the best of trading with channels, any comment and suggestion are welcomed. Indicador
Squeeze Momentum [Plus]The "Momentum" in this indicator is smoothed out using linear regression. The Momentum is what is displayed on the indicator as a histogram, its purpose is obvious (to show momentum).
What is a Squeeze? A squeeze occurs when Bollinger Bands tighten up enough to slip inside of Keltner Channels .
This is interpreted as price is compressing and building up energy before releasing it and making a big move.
Traditionally, John Carter's version uses 20 period SMAs as the basis lines on both the BB and the KC.
In this version, I've given the freedom to change this and try out different types of moving averages.
The original squeeze indicator had only one Squeeze setting, though this new one has three.
The gray dot Squeeze, call it a "low squeeze" or an "early squeeze" - this is the easiest Squeeze to form based on its settings.
The orange dot Squeeze is the original from the first Squeeze indicator.
And finally, the yellow dot squeeze, call it a "high squeeze" or "power squeeze" - is the most difficult to form and suggests price is under extreme levels of compression.
Now to explain the parameters:
Squeeze Input - This is just the source for the Squeeze to use, default value is closing price.
Length - This is the length of time used to calculate the Bollinger Bands and Keltner Channels .
Bollinger Bands Calculation Type - Selects the type of moving average used to create the Bollinger Bands .
Keltner Channel Calculation Type - Selects the type of moving average used to create the Keltner Channel.
Color Format - you to choose one of 5 different color schemes.
Draw Divergence - Self explanatory here, this will auto-draw divergence on the indicator.
Gray Background for Dark Mode - to make them more visually appealing.
Added ADX (Average Directional Index) that measure a trend’s strength. The higher the ADX value, the stronger the trend. The ADX line is white when it has a positive slope, otherwise it is gray. When the ADX has a very large dispersion with respect to the momentum histogram, increase the scale number.
Added "H (Hull Moving Average) Signal". Hull is a extremely responsive and smooth moving average created by Alan Hull in 2005. Have option to chose between 3 Hull variations.
Added "Williams Vix Fix" signal. The Vix is one of the most reliable indicators in history for finding market bottoms. The Williams Vix Fix is simply a code from Larry Williams creating almost identical results for creating the same ability the Vix has to all assets.
The VIX has always been much better at signaling bottoms than tops. Simple reason is when market falls retail traders panic and increase volatility, and professionals come in and capitalize on the situation. At market tops there is no one panicking... just liquidity drying up.
The FE green triangles are "Filtered Entries"
The AE green triangles are "Aggressive Filtered Entries" Indicador
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Inverse BandsThis was the result of quite some time spent examining how much information could be gleamed by studying the interactions between Keltner Channels, STARC Bands and Bollinger Bands. I was surprised by the results.
First of all, there are four fills that are black. Set the transparency of those to 0 and you'll see this indicator the way that it's meant to be seen. Those fills belong to unused sections of the Bollinger Bands.
There are two clouds which represent STARC Bands and the Keltner Channel. There is some delay when they flip from bullish (green) to bearish (red), but they are indicative of the trend. The space between them is black and the narrower that space is, the greater volatility is. Because of this, we don't need the exterior Bollinger Bands.
The Bollinger Bands remain visible as the yellow interior clouds on the top cloud and the blue interior clouds on the bottom cloud. Often, the thicker the yellow or blue cloud is, the less severe a throwback from a given trend reversal will be. Often the thinner that yellow or blue cloud is, the more severe the trend reversal will be. If price is rising into a thin interior yellow cloud, the following dip will be substantial. If price action dips towards a thicker interior blue cloud, often the pump following that dump will be less enthusiastic.
We preserve the Keltner Channel and STARC bands as our cloud because the way that they interact with the three basis lines yields a lot of information.
The yellow Bollinger basis line tells us about trend strength. The closer the BB basis line is to the top of the top cloud or the bottom of the bottom cloud, the stronger the trend is. When it enters the cloud very close to the bottom of the bottom cloud, you know you're looking at a strong pump, and vice versa when it's close to the top of the top cloud.
The purple Keltner Channel basis line and orange STARC Band basis line can forecast short term trend changes one candlestick in advance by contacting any line in either cloud. The moment either basis line touches or crosses any boundary of the clouds, you know that the next candle will change directions. In an uptrend, a touch or cross means the next candle will have a lower high point. In a downtrend, a cross or touch means the next candle will have a higher high point. This is most useful in scalping.
It'd be pretty easy to slap some crossover alerts on to this and useful considering that they come a candle in advance. Feel free to further explore and develop this. Indicador
Keltner FibzonesKeltner Channel with Fibonacci Zones which uses properties of a Donchian Channel.
This script is a variation of the Fibonacci Zone script and the Donchian Fibonacci Trading Tool which I published earlier. A Keltner Channel gives more useful information to the trader than a Donchian Channel, because it provides a depiction of “normal range” and shows “outside normalcy” situations. Fibonacci lines provide a way to see if the market is trending up or down, while moving inside the channel, because in cases where the Fibonacci lines function as resistance, the trend is down, whereas when these turn out to be supports the trend is up.
Example of use:
If after a rally up - in which candles moves outside the channel - these return into the channel, this means a “new normal”. If the fibs turn out to give support, one may assume that this is a temporary sideways movement in which a flag is formed, after which following rally up may happen. With rally down the opposite is true. Top and bottom situations show a change in the way the market uses the fiblines.
The middle line of the Donchian Channel is used as the middle line of the Keltner channel, in stead of the sma in the classic channel. Default for calculation is 2 x Average True Range above and below this line. Default for the periods of the channel is 20 periods, because this allows the candles to go outside the channel. If you shorten this, all happens inside the channel.
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