FX Sniper's Ergodic_CCI
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This script is a custom technical analysis tool designed to help traders visualize market momentum and price behavior. It operates by combining two distinct types of data analysis—traditional momentum indicators and a unique calculation based on the absolute movement of prices—to provide a clearer picture of market trends.
Here is a breakdown of how the logic functions:
1. Standard Momentum Tracking
The script begins by calculating a standard CCI (Commodity Channel Index). This is a common tool used in trading to measure the price of an asset relative to its average over a specific period. It helps identify whether an asset is overbought, oversold, or moving in a steady trend.
2. Movement and Volatility Analysis
Beyond the standard indicator, the script performs a deeper "under-the-hood" analysis of price changes:
- Price Differentials: It calculates the difference between consecutive closing prices to determine how much the price moves from one candle to the next.
- Absolute Magnitude: It takes the absolute value of these movements. By removing the positive and negative signs, the script focuses purely on the intensity of the price action (volatility) rather than just the direction.
3. Multi-Layer Smoothing
To ensure that the data isn't "noisy" or jumpy, the script passes these calculations through multiple layers of Exponential Moving Averages (EMA).
- It smooths the raw price differences first.
- It then smooths the smoothed results again using different time horizons. This layering helps filter out minor market fluctuations, leaving behind the underlying structural movement of the price.
4. The "Ergo" Calculation
The final unique component of this script is the "Ergo" calculation. It takes the smoothed volatility data and performs a ratio analysis (dividing one smoothed set by another) and scales it by a specific factor.
Summary for the User
In plain terms, this tool doesn't just look at where the price is going; it looks at how hard the market is pushing in that direction. By comparing the intensity of recent price movements against broader historical volatility, it attempts to create a specialized signal that highlights significant shifts in market strength, helping traders distinguish between true trend reversals and minor market "noise."
//+------------------------------------------------------------------+
//| Louw Coetzer aka FX Sniper |
//| Copyright © 2004, MetaQuotes Software Corp. |
//| http://www.metaquotes.net/ |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2004, Fx Sniper."
#property link "http://www.dunno.net/"
//---- indicator settings
#property indicator_separate_window
#property indicator_buffers 2
#property indicator_color1 White
#property indicator_color2 Red
#property indicator_color3 Yellow
// Ergo Variables
extern int pq =2;
extern int pr = 14;
extern int ps = 5;
extern int CCI_period = 14;
//---- indicator buffers
double mtm[];
double absmtm[];
double ErgoCCI[];
double MainCCI[];
double var1[];
double var2[];
double var2a[];
double var2b[];
//double valor1[];
//double valor2[];
//double extvar[];
//double cciSignal[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- 2 additional buffers are used for counting.
IndicatorBuffers(8);
//---- drawing settings
SetIndexStyle(0,DRAW_LINE,STYLE_SOLID,2,White);
SetIndexStyle(1,DRAW_LINE,STYLE_SOLID,1,Yellow);
SetIndexBuffer(0,ErgoCCI);
SetIndexBuffer(1,MainCCI);
SetIndexBuffer(2,mtm);
SetIndexBuffer(3,var1);
SetIndexBuffer(4,var2);
SetIndexBuffer(5,absmtm);
SetIndexBuffer(6,var2a);
SetIndexBuffer(7,var2b);
//---- name for DataWindow and indicator subwindow label
IndicatorShortName("FX Sniper Ergo/CCI ");
//---- initialization done
return(0);
}
//+------------------------------------------------------------------+
//| Calculations |
//+------------------------------------------------------------------+
int start()
{
int limit;
int i;
int counted_bars=IndicatorCounted();
//---- check for possible errors
if(counted_bars<0) return(-1);
//---- last counted bar will be recounted
if(counted_bars>0) counted_bars--;
limit=Bars-counted_bars;
//---- main loop
for(i=0; i<limit; i++)
{
MainCCI[i]=iCCI(NULL,0,CCI_period,PRICE_TYPICAL,i);
}
//---- done
for(i=0; i <= Bars; i++)
{
mtm[i]= Close[i]- Close[i +1];
}
for(i=0; i <= Bars-1; i++)
{
absmtm[i] = MathAbs(mtm[i]);
}
for(i=0; i <= Bars-1; i++)
{
var1[i]= iMAOnArray(mtm,0,pq,0,MODE_EMA,i);
}
for(i=0; i <= Bars-1; i++)
{
var2[i]= iMAOnArray(var1,Bars,pr,0,MODE_EMA,i);
}
//for(i=0; i <= Bars-1; i++)
//{
//extvar[i]= iMAOnArray(var2,0,ps,0,MODE_EMA,i);
//}
// for(i=0; i <= Bars-1; i++)
// {
// var2a[i] = 400 * extvar[i]; // FINAL Batch 1
// }
for(i=0; i <= Bars-1; i++)
{
var2a[i]= iMAOnArray(absmtm,0,pq,0,MODE_EMA,i);
}
for(i=0; i <= Bars-1; i++)
{
var2b[i]= iMAOnArray(var2a,0,pr,0,MODE_EMA,i);
}
for(i=0; i <= Bars-1; i++)
{
ErgoCCI[i] = (450 * iMAOnArray(var2,0,ps,0,MODE_EMA,i))/(iMAOnArray(var2b,0,ps,0,MODE_EMA,i)); //var2a[i]/var2b[i];
//ErgoCCI[i] = var2a[i];
}
return(0);
}
//+------------------------------------------------------------------+
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