The Darma System Indicator is a technical analysis tool designed to identify specific market "moods" and provide visual signals for potential buy and sell opportunities. It works by monitoring price action and calculating key pivots to highlight momentum shifts on your trading chart.
Core Logic and Visual Cues
The indicator primarily communicates through three distinct visual elements: Blue Bars, Red Bars, and Dots. These elements work together to signal when the market is transitioning between bearish and bullish states.
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Momentum Markers (Dots): The system uses "stop dots" that appear above or below the price action.
- A Blue Dot appearing below the price typically signifies a shift toward a bullish sentiment.
- A Red Dot appearing above the price typically signifies a shift toward a bearish sentiment.
- The key signal occurs during a transition: for example, when a dot moves from above the price to below it (or vice versa), it alerts you that the "mood" of the market is ready for a potential trade.
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Confirmation Bars: Once the dots indicate a change in mood, the indicator looks for confirmation in the form of colored bars.
- Blue Bars: These appear when the conditions for a bullish move are met.
- Red Bars: These appear when the conditions for a bearish move are met.
Trading Strategy Guidelines
Based on the underlying logic of the script, the system suggests a structured approach to entering trades:
For Buy Opportunities:
- Mood Shift: Watch for a "stop dot" located above the price to flip and become a blue dot below the price.
- Confirmation: Wait for the current price bar to turn blue.
- Completion: Ensure that the blue bar has closed completely before acting.
- Entry: Place a buy order at a specific distance (approximately 10-15 pips) above the high point of that completed blue bar.
For Sell Opportunities:
- Mood Shift: Watch for a "stop dot" located below the price to flip and become a red dot above the price.
- Confirmation: Wait for the current price bar to turn red.
- Completion: Ensure that the red bar has closed completely before acting.
- Entry: Place a sell order at a specific distance (approximately 10-15 pips) below the low point of that completed red bar.
Technical Summary
The indicator calculates these signals by analyzing price extremes over a set period and comparing them against weighted pivot points (a calculation involving the High, Low, Open, and Close prices). It also incorporates an Average True Range-style logic (Parabolic SAR) to determine where the dots should be placed relative to the current candles.
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Darma System Indicator (beta)
//+------------------------------------------------------------------+
//| Darma System Indicator (beta).mq4 |
//| tonyc2a@yahoo.com |
//| |
//+------------------------------------------------------------------+
/*README
This indicator is supposed to be a conversion of Darma's set of indicators from MT3 to MT4.
This conversion is not exactly the same though. In the MT3 version, the indicators were split up between 4 separate custom indicator files.
This MT4 version has all the logic combined into one file. Due to this consolidation, some of the logic did not translate exactly as intended.
Also, I only did a direct code translation. Prior to looking at the code in the MT3 files, I had no understanding of the logic behind the indicator files.
If someone could provide the logic in human language, I might be able to make this indicator behave more properly as well as be a little more programmatically elegant.
Test this indicator out according to Darma's original rules and see how it does for you.
Darma's Rules:
BUY:
1. When red stop dot (above price) becoming a blue stop dot (below price), the mood is ready for a buy.
3. Wait for the bar becoming blue. Sometime it happens in the same time, but sometime need to wait.
4. After you have a blue bar, Wait that blue bar closed completely.
5. Then place order to buy at 10-15 pips above the high of that blue bar.
SELL:
1. When bule stop dot (below price) becoming a red stop dot (above price), the mood is ready for a sell.
3. Wait for the bar becoming red. Sometime it happens in the same time, but sometime need to wait.
4. After you have a red bar, Wait that red bar closed completely.
5. Then place order to sell at 10-15 pips below the low of that red bar.
PS. This code is very ugly and inelegant. I would like to fix this by getting system rules in english.
- tonyc2a@yahoo.com
*/
#property copyright "tonyc2a@yahoo.com"
#property link ""
#property indicator_chart_window
#property indicator_buffers 4
//---- input parameters
extern int WingDings_Symbol = 108;
//---- buffers
double Buffer1[];
double Buffer2[];
double Buffer3[];
double Buffer4[];
double Buffer5[];
double Buffer6[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
SetIndexStyle(0,DRAW_HISTOGRAM,STYLE_SOLID,2,Blue);
SetIndexBuffer(0,Buffer1);
SetIndexLabel(0,"Blue Bar");
SetIndexStyle(1,DRAW_HISTOGRAM,STYLE_SOLID,2,Red);
SetIndexBuffer(1,Buffer2);
SetIndexLabel(1,"Red Bar");
SetIndexStyle(2,DRAW_ARROW,STYLE_DOT,2,Blue);
SetIndexBuffer(2,Buffer3);
SetIndexLabel(2,"Blue Dot");
SetIndexArrow(2,WingDings_Symbol);
SetIndexStyle(3,DRAW_ARROW,STYLE_DOT,2,Red);
SetIndexBuffer(3,Buffer4);
SetIndexLabel(3,"Red Dot");
SetIndexArrow(3,WingDings_Symbol);
//SetIndexStyle(4,DRAW_SECTION,STYLE_SOLID,1,Blue);
//SetIndexBuffer(4,Buffer5);
//SetIndexLabel(4,"Blue");
//SetIndexStyle(5,DRAW_SECTION,STYLE_SOLID,1,Red);
//SetIndexBuffer(5,Buffer6);
//SetIndexLabel(5,"Red");
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
//---- TODO: add your code here
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int counted_bars=IndicatorCounted();
//---- TODO: add your code here
int adjustment=0; //change this value to make the indicator behave slightly differently. valid values are 0-4.
int periods=3;
int extremes=0;
double smin, smax, SsMax, SsMin, pivothi, pivotlo, margins;
bool flag1, flag2;
for(int i=0;i<Bars;i++){
if(extremes!=0){
SsMax = High[Highest(NULL,0,MODE_OPEN,periods,i+adjustment)];
SsMin = Low[Lowest(NULL,0,MODE_OPEN,periods,i+adjustment)];
}
else{
SsMax = Open[Highest(NULL,0,MODE_OPEN,periods,i+adjustment)];
SsMin = Open[Lowest(NULL,0,MODE_OPEN,periods,i+adjustment)];
}
smin = SsMin+(SsMax-SsMin)*margins/100;
smax = SsMax-(SsMax-SsMin)*margins/100;
pivothi=((2*High[i])+Low[i]+(2*Close[i]))/5;
pivotlo=(High[i]+(2*Low[i])+(2*Close[i]))/5;
if(pivotlo>smin && pivothi>smax) flag1=true; else flag1=false;
if(pivothi<smax && pivotlo<smin) flag2=true; else flag2=false;
if(flag1){
Buffer1[i]=High[i];
Buffer2[i]=Low[i];
}
if(flag2){
Buffer1[i]=Low[i];
Buffer2[i]=High[i];
}
double sig=iSAR(NULL,0,0.5,1,i);
if(sig<Low[i]) Buffer3[i]=sig;
if(sig>High[i]) Buffer4[i]=sig;
/*
double sig2=iSAR(NULL,0,1,0.2,i);
if(sig2<Low[i]) {Buffer5[i]=sig2; Buffer6[i]=-1;}
if(sig2>High[i]) {Buffer6[i]=sig2; Buffer5[i]=-1;}
*/
}//end for
//----
return(0);
}
//+------------------------------------------------------------------+
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