ID004 VIX Fear Timing Indicator

This script is an overlay indicator, not a strategy. It uses: * indicator(..., overlay=true) * plotshape() for Buy, DCA1, and DCA2 labels * bgcolor() for VIX percentile background * alertcondition() for monitoring alerts It does not use: * strategy.entry() * strategy.exit() * strategy.close() * automated order placement * position management logic The originality of the script is in how the components are connected. The script does not simply display RSI, Bollinger Bands, MACD, VIX, and moving averages as separate tools. Instead, those components are used inside a staged recovery framework. The integration works through: 1. A state machine that controls the sequence. 2. Price-drop requirements before a stage can qualify. 3. Recovery confirmation after weakness appears. 4. Quality scores that combine several technical clues. 5. Higher-timeframe danger filters. 6. Crash filters to avoid fast breakdowns. 7. VIX fear filters that change by stage. 8. Adaptive timing windows for DCA1 and DCA2. 9. Armed-zone logic before DCA confirmation. 10. Reset logic so old stages do not stay active forever. The state model is central: state = 0 means no active sequence. state = 1 means Buy has triggered. state = 2 means DCA1 has triggered. state = 3 means DCA2 has triggered. This is why DCA labels cannot appear randomly. DCA1 requires Buy first. DCA2 requires DCA1 first. The script stores important stage references: buyPrice d1Price d2Price buyBar d1Bar d2Bar These values are then used to calculate deeper zones, timing windows, basket average, and reset conditions.

The Buy stage is the first recovery stage. It requires a meaningful pullback and early recovery evidence. The script calculates a recent lookback high: lookbackHigh = ta.highest(high, lookbackBars) Then it calculates the percentage drop from that high: dropFromLookbackHighPct = (lookbackHigh - close) / lookbackHigh * 100 The Buy drop threshold is adjusted by the selected Signal preset: Aggressive = lower required drop Balanced = default required drop Conservative = higher required drop The effective Buy drop is: effBuyDropPct = buyDropPct * dropMult The core Buy setup uses: meaningfulDrop wasOversold momentumRecovery priceRecovery meaningfulDrop: Price must fall enough from the recent lookback high. wasOversold: The script checks whether RSI was recently weak: ta.lowest(rsi, 10) < 35 momentumRecovery: The script checks whether RSI is improving and recovering from weak conditions. priceRecovery: The script checks whether price is showing local recovery by closing above the fast EMA or above the previous bar high. The script also builds a Buy quality score. The score can include: * meaningful drop * recent oversold behavior * RSI improvement * price recovery * oversold reclaim * Bollinger Band reclaim * support reclaim * bullish divergence * strong lower wick * MACD histogram improvement * structure shift * volume confirmation * strong VIX stress * rare VIX event * VIX fear cooling The final Buy signal requires all major gates: state == 0 cooldownOk buyRegimeOk crashOk vixBuyOk buySetup buyQualityOk This means Buy is more selective than a simple RSI oversold label. It needs price weakness first, then recovery behavior, then context and quality confirmation.

DCA1 and DCA2 are staged deeper recovery zones. They depend on previously stored stage prices. DCA1 uses the Buy price: d1ZonePct = buyPrice * (1.0 - effD1DropPct / 100.0) DCA2 uses the DCA1 price: d2ZonePct = d1Price * (1.0 - effD2DropPct / 100.0) In this version, the internal drop validation is set to "Percent only", so percentage-based validation is the active method. DCA1 logic: DCA1 requires state == 1. This means Buy must already exist. DCA1 must happen inside its timing window: barsSinceBuy >= adaptiveD1Min barsSinceBuy <= adaptiveD1Max The DCA1 zone becomes armed when: * state is 1 * price is below the Buy price * price reaches the DCA1 zone * the DCA1 timing window is valid After the zone is armed, the script waits for a confirmation delay: d1ConfirmDelay DCA1 technical confirmation can come from: B1 = bullish divergence and RSI improvement B2 = Bollinger Band reclaim plus wick, candle, or MACD improvement B3 = support reclaim or strong lower wick plus RSI or volume confirmation Bscore = weighted recovery score DCA1 also uses VIX score components: * basic VIX stress * strong VIX stress * rare VIX event * VIX fear cooling The final DCA1 signal requires: state == 1 d1Armed d1ArmedLongEnough inD1Window recoveryCandleD1 dcaRegimeOk crashOk d1VixOk d1TechnicalOk d1QualityOk DCA2 logic: DCA2 requires state == 2. This means Buy and DCA1 must already exist. DCA2 must happen inside its timing window: barsSinceD1 >= adaptiveD2Min barsSinceD1 <= adaptiveD2Max DCA2 also checks price against basket average: basketAvg = average of active staged prices The DCA2 zone becomes armed when: * state is 2 * price reaches the DCA2 zone * price is below basket average * the DCA2 timing window is valid DCA2 technical confirmation is stricter and can include: C1 = higher-timeframe RSI or MACD improvement plus local recovery C2 = capitulation-style volume spike, strong lower wick, and large range C3 = structure shift plus RSI improvement Cscore = weighted score using higher-timeframe improvement, capitulation evidence, structure shift, wick rejection, bullish engulfing, volume spike, and higher-timeframe MACD improvement The final DCA2 signal requires: state == 2 d2Armed d2ArmedLongEnough inD2Window recoveryCandleD2 dcaRegimeOk crashOk d2VixOk d2TechnicalOk d2QualityOk This explains why DCA1 and DCA2 are not only lower-price signals. A zone must be reached first, then recovery evidence must appear before confirmation.

The script requests VIX data from the selected VIX symbol: vixSymbol = input.symbol("CBOE:VIX", "VIX symbol") VIX uses the active chart timeframe: vixTf = timeframe.period The VIX function returns: * VIX close * VIX percentile * VIX percentile jump * whether VIX is falling * whether VIX percentile is falling The script builds several VIX conditions: vixAbsoluteOk: VIX close is above an internal stress level. vixHighPercentileOk: VIX percentile is above the selected stress percentile. vixJumpOk: VIX percentile jumped sharply. vixRareEvent: VIX percentile or absolute VIX level is extremely high. vixStressBasic: Basic fear condition is active. vixStressStrong: Stronger fear condition is active. vixFearCooling: Fear is elevated and VIX or VIX percentile is falling. For DCA2, the script uses a special cooling model: vixRecentPeakPercentile = recent highest VIX percentile vixWasTooHighRecently = VIX percentile was very high recently vixCooledFromPeak = VIX percentile cooled by the selected cooling amount vixCoolingButStillElevated = VIX is still high but falling DCA2 can pass VIX cooling when: * VIX cooled enough from a recent high peak * a rare VIX event is active and fear is cooling * VIX is still elevated but percentile is falling The stage-specific VIX design is important: Buy can use basic VIX stress or fear cooling. DCA1 requires stricter stress confirmation. DCA2 requires recent high fear followed by cooling. The script also adapts to chart profiles: 15 minutes 30 minutes 1 hour 4 hours 1 day The profile affects: * price lookback * VIX lookback * DCA timing windows * confirmation delays * higher-timeframe reference * crash detection window Higher-timeframe regime logic checks: * higher-timeframe close * higher-timeframe EMA 50 * higher-timeframe EMA 200 * higher-timeframe RSI * higher-timeframe RSI direction * higher-timeframe MACD histogram improvement The danger regime blocks normal recovery signals when higher-timeframe trend and momentum are too weak, unless rare fear and local recovery behavior justify an exception. The crash filter checks for fast, high-volume selloffs and helps avoid triggering recovery labels during active breakdown pressure.

The script uses 10 visible inputs to keep the user interface focused: 1. Signal preset Controls strictness: Aggressive, Balanced, Conservative 2. Buy drop from recent high % Controls the minimum pullback before Buy can qualify. 3. DCA1 drop below Buy % Controls how far price must move below Buy before DCA1 can arm. 4. DCA2 drop below DCA1 % Controls how far price must move below DCA1 before DCA2 can arm. 5. Rejection wick % Controls the minimum lower-wick rejection requirement. 6. VIX mode Off, Conservative, Very Strict 7. VIX symbol Default VIX source is CBOE:VIX. 8. VIX stress percentile Main percentile threshold for elevated fear. 9. DCA2 VIX cooling drop Required cooling from the recent VIX percentile peak. 10. Low VIX color percentile Defines unusually low VIX percentile conditions. Hidden internal defaults include: * RSI length * fast EMA length * ATR length * Bollinger Band length and multiplier * volume average length * swing length * cooldown bars * profile-based lookbacks * adaptive timing sample rules * VIX rare-event thresholds * VIX background transparency * reset timing Alerts: The script includes seven alert conditions: 1. Buy confirmed 2. DCA1 zone armed 3. DCA1 confirmed 4. DCA2 zone armed 5. DCA2 confirmed 6. VIX cooled after high 7. VIX too low percentile Alert meaning: * Armed alerts mean price reached a DCA zone, but confirmation is not complete. * Confirmed alerts mean the full stage logic is complete. * VIX alerts describe fear-regime behavior. Background: The script calculates high and low VIX percentile background conditions. In the current plotted version, the visible green background marks very high VIX percentile. This means elevated fear or volatility stress, not automatic bullishness. Reset logic: The script resets the active sequence when: * DCA2 has completed and enough bars have passed. * DCA1 did not appear inside the valid window after Buy. * DCA2 did not appear inside the valid window after DCA1. This prevents old signals from staying active forever and helps each staged sequence remain connected to the original recovery setup. Publication note: This description is written so users can understand the script without reading Pine code. It explains what the script does, why the components are combined, how the staged logic works, and how traders can use it responsibly.