OPEN-SOURCE SCRIPT
Cloud Trend by luis [LB]
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1. purpose and originality
the [lb] cloud vol-trend ultra v6 isn't a basic moving average crossover or rsi mashup. its standout feature is the adaptive volatility compression (avc) logic.
most trend indicators flop in low-liquidity times (sundays, holidays) by tracking price alone. this script fixes that by normalizing trend strength against historical volatility (hv).
2. how it works (the math behind it)
the script follows a three-step process:
core trend: compares heikin-ashi smoothed closes over a lookback period to spot the dominant market direction.
volatility normalization: computes annualized historical volatility
hv=100×σ×t^0.5
quality score (elite multiplier): the magic is the acceleration ratio. it divides trend count by a factor from current volatility vs. its 4-period momentum. formula: score = count / (relative volatility * sqrt(volatility accel)). a 2.0 score in high vol beats one in a flat market hands down.
3. how to use it
elite signals (scores < 4.0): these flag institutional "igniting bars." solid green or pink labels mean high-probability breakouts.
perfect gradient: track candle colors. fading to gray shows dropping volatility-to-price ratio—your early exit cue, even if price keeps moving.
settings: bump 'lookback' to 80-100 for swings; drop to 20-40 for scalps.
1. purpose and originality
the [lb] cloud vol-trend ultra v6 isn't a basic moving average crossover or rsi mashup. its standout feature is the adaptive volatility compression (avc) logic.
most trend indicators flop in low-liquidity times (sundays, holidays) by tracking price alone. this script fixes that by normalizing trend strength against historical volatility (hv).
2. how it works (the math behind it)
the script follows a three-step process:
core trend: compares heikin-ashi smoothed closes over a lookback period to spot the dominant market direction.
volatility normalization: computes annualized historical volatility
hv=100×σ×t^0.5
quality score (elite multiplier): the magic is the acceleration ratio. it divides trend count by a factor from current volatility vs. its 4-period momentum. formula: score = count / (relative volatility * sqrt(volatility accel)). a 2.0 score in high vol beats one in a flat market hands down.
3. how to use it
elite signals (scores < 4.0): these flag institutional "igniting bars." solid green or pink labels mean high-probability breakouts.
perfect gradient: track candle colors. fading to gray shows dropping volatility-to-price ratio—your early exit cue, even if price keeps moving.
settings: bump 'lookback' to 80-100 for swings; drop to 20-40 for scalps.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.