This tool is designed to analyze market trends by identifying price boundaries and monitoring "breakouts." Instead of just looking at simple moving averages, it focuses on the extremes of price action over a specific period to determine where the market's momentum is shifting.
Core Logic Overview
The script functions by scanning historical price data to establish a "channel" of activity. It looks at the highest highs and lowest lows within a user-defined timeframe (the Period) to create a dynamic range of movement. Based on these extremes, it calculates specific boundary levels that represent potential support and resistance.
How the Trend is Identified
The logic operates on a binary trend system (Upward or Downward):
- Trend Detection: The script constantly monitors whether the current market price has closed above or below its calculated boundaries from the previous period.
- Breakout Recognition: If the price closes significantly beyond a boundary, the tool identifies a trend shift. For example, a close above the upper boundary triggers an "Upward Trend," while a close below the lower boundary triggers a "Downward Trend."
- Dynamic Adjustment: The boundaries are not static; they adjust based on the direction of the trend to ensure the tool stays relevant as market volatility changes.
Visual and Alert System
The script translates this complex data into visual cues on your chart:
- Trend Lines: It draws specific lines that represent the current "Stop" levels for both upward and downward movements.
- Signals: It generates specific markers (arrows or points) to highlight moments when a trend first confirms or shifts.
- Real-Time Notifications: The logic includes an automated alert system. When a significant trend reversal is detected—such as the market switching from a bearish state to a bullish state—the script can trigger visual alerts on your screen, play an audio notification, or send an email/SMS notification (depending on your settings).
Key User Controls
The behavior of this logic can be refined through several key parameters:
- Channel Period: Determines how much historical data the tool looks at to define the current price range.
- Risk Factor: Adjusts how aggressively the boundaries are calculated relative to the price range.
- Alert Modes: Allows you to toggle whether you want to be notified via sound, pop-up alerts, or email when a trend change occurs.
Price Data Components
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16191-system
//+------------------------------------------------------------------+
//| PriceChannel_Stop_v1.2.mq4 |
//| Copyright © 2006, Forex-TSD.com |
//| Written by IgorAD,igorad2003@yahoo.co.uk |
//| http://finance.groups.yahoo.com/group/TrendLaboratory |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2006, Forex-TSD.com "
#property link "http://www.forex-tsd.com/"
#property indicator_chart_window
#property indicator_buffers 6
#property indicator_color1 Blue
#property indicator_color2 Red
#property indicator_color3 Blue
#property indicator_color4 Red
#property indicator_color5 Blue
#property indicator_color6 Red
//---- input parameters
extern int ChannelPeriod=6.5;
extern double Risk=0.30;
extern int Signal=1;
extern int Line=1;
extern int SoundAlertMode=0;
extern int SMSAlertMode=0;
extern int AlertTimes=1;
extern int Nbars=1000;
//---- indicator buffers
double UpTrendBuffer[];
double DownTrendBuffer[];
double UpTrendSignal[];
double DownTrendSignal[];
double UpTrendLine[];
double DownTrendLine[];
double trend[];
bool UpTrendAlert=false, DownTrendAlert=false;
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
string short_name;
//---- indicator line
IndicatorBuffers(7);
SetIndexBuffer(0,UpTrendBuffer);
SetIndexBuffer(1,DownTrendBuffer);
SetIndexBuffer(2,UpTrendSignal);
SetIndexBuffer(3,DownTrendSignal);
SetIndexBuffer(4,UpTrendLine);
SetIndexBuffer(5,DownTrendLine);
SetIndexBuffer(6,trend);
SetIndexStyle(0,DRAW_ARROW);
SetIndexStyle(1,DRAW_ARROW);
SetIndexStyle(2,DRAW_ARROW);
SetIndexStyle(3,DRAW_ARROW);
SetIndexStyle(4,DRAW_LINE);
SetIndexStyle(5,DRAW_LINE);
SetIndexArrow(0,159);
SetIndexArrow(1,159);
SetIndexArrow(2,108);
SetIndexArrow(3,108);
//---- name for DataWindow and indicator subwindow label
short_name="PriceChannel_Stop_v1("+ChannelPeriod+")";
IndicatorShortName(short_name);
SetIndexLabel(0,"UpTrend Stop");
SetIndexLabel(1,"DownTrend Stop");
SetIndexLabel(2,"UpTrend Signal");
SetIndexLabel(3,"DownTrend Signal");
SetIndexLabel(4,"UpTrend Line");
SetIndexLabel(5,"DownTrend Line");
//----
SetIndexDrawBegin(0,ChannelPeriod);
SetIndexDrawBegin(1,ChannelPeriod);
SetIndexDrawBegin(2,ChannelPeriod);
SetIndexDrawBegin(3,ChannelPeriod);
SetIndexDrawBegin(4,ChannelPeriod);
SetIndexDrawBegin(5,ChannelPeriod);
//----
return(0);
}
//+------------------------------------------------------------------+
//| PriceChannel_Stop_v1 |
//+------------------------------------------------------------------+
int start()
{
int i,shift;
double high, low, price;
double smax[30000],smin[30000],bsmax[30000],bsmin[30000];
string Message;
for (shift=Nbars-1;shift>=0;shift--)
{
UpTrendBuffer[shift]=EMPTY_VALUE;
DownTrendBuffer[shift]=EMPTY_VALUE;
UpTrendSignal[shift]=-1;
DownTrendSignal[shift]=-1;
UpTrendLine[shift]=EMPTY_VALUE;
DownTrendLine[shift]=EMPTY_VALUE;
trend[shift]=0;
}
for (shift=Nbars-ChannelPeriod-1;shift>=0;shift--)
{
high=High[shift]; low=Low[shift]; i=shift-1+ChannelPeriod;
while(i>=shift)
{
price=High[i];
if(high<price) high=price;
price=Low[i];
if(low>price) low=price;
i--;
}
smax[shift]=high;
smin[shift]=low;
bsmax[shift]=smax[shift]-(smax[shift]-smin[shift])*Risk;
bsmin[shift]=smin[shift]+(smax[shift]-smin[shift])*Risk;
trend[shift]=trend[shift+1];
if (Close[shift]>bsmax[shift+1]) {trend[shift]= 1; }
if (Close[shift]<bsmin[shift+1]) {trend[shift]=-1; }
if(trend[shift]>0 && bsmin[shift]<bsmin[shift+1]) bsmin[shift]=bsmin[shift+1];
if(trend[shift]<0 && bsmax[shift]>bsmax[shift+1]) bsmax[shift]=bsmax[shift+1];
if (trend[shift]>0)
{
if (Signal>0 && UpTrendBuffer[shift+1]==-1.0)
{
UpTrendSignal[shift]=bsmin[shift];
if(Line>0) UpTrendLine[shift]=bsmin[shift];
if (SoundAlertMode>0 && shift==0) PlaySound("alert2.wav");
}
else
{
UpTrendBuffer[shift]=bsmin[shift];
if(Line>0) UpTrendLine[shift]=bsmin[shift];
UpTrendSignal[shift]=-1;
}
if (Signal==2) UpTrendBuffer[shift]=0;
DownTrendBuffer[shift]=-1.0;
DownTrendLine[shift]=EMPTY_VALUE;
}
if (trend[shift]<0)
{
if (Signal>0 && DownTrendBuffer[shift+1]==-1.0)
{
DownTrendSignal[shift]=bsmax[shift];
if(Line>0) DownTrendLine[shift]=bsmax[shift];
if (SoundAlertMode>0 && shift==0) PlaySound("alert2.wav");
}
else
{
DownTrendBuffer[shift]=bsmax[shift];
if(Line>0)DownTrendLine[shift]=bsmax[shift];
DownTrendSignal[shift]=-1;
}
if (Signal==2) DownTrendBuffer[shift]=0;
UpTrendBuffer[shift]=-1.0;
UpTrendLine[shift]=EMPTY_VALUE;
}
//if ( trend[0]>0 && Close[2]<=bsmax[3] && Close[1]>bsmax[2] && Volume[0]>1 && !UpTrendAlert)
if ( trend[2]<0 && trend[1]>0 && Volume[0]>1 && !UpTrendAlert)
{
Message = " "+Symbol()+" M"+Period()+": Signal for BUY";
if ( SoundAlertMode>0 ) Alert (Message);
if ( SMSAlertMode>0 ) SendMail ("Signal from PriceChannel_Stop",TimeToStr(CurTime())+Message);
UpTrendAlert=true; DownTrendAlert=false;
}
//if ( trend[0]<0 && Close[2]>=bsmin[3] && Close[1]<bsmin[2] && Volume[0]>1 && !DownTrendAlert)
if ( trend[2]>0 && trend[1]<0 && Volume[0]>1 && !DownTrendAlert)
{
Message = " "+Symbol()+" M"+Period()+": Signal for SELL";
if ( SoundAlertMode>0 ) Alert (Message);
if ( SMSAlertMode>0 ) SendMail ("Signal from PriceChannel_Stop",TimeToStr(CurTime())+Message);
DownTrendAlert=true; UpTrendAlert=false;
}
}
return(0);
}
//+------------------------------------------------------------------+
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