This tool is designed to help traders identify momentum trends and potential entry points by analyzing price volatility and price action relative to moving averages. It works by calculating a dynamic range of market movement and comparing current prices against that historical behavior.
Core Logic and Calculations
Volatility Measurement (WATR)
The script begins by measuring the recent market "stretch" or volatility. Instead of looking at a simple fixed range, it calculates a weighted average of the high and low prices over a specific period. This ensures that more recent price movements have a greater influence on the current volatility reading than older data.
Dynamic Boundary Creation
Using the volatility measurements, the script establishes three distinct "zones" or boundaries:
- Minimum Range: The smallest expected movement based on current conditions.
- Maximum Range: The largest expected movement.
- Mid Range: A balanced average between the minimum and maximum.
The tool then checks where the current price sits in relation to these zones. It determines whether the market is trending upward or downward by comparing current prices against these three dynamic levels, creating a "Trend" classification for each zone.
Relative Strength Indicators (Stochastics)
The script transforms these calculated boundaries into two specific lines displayed in a separate window:
- Line 1 (Minimum): Represents the lower-end momentum.
- Line 2 (Mid): Represents the median momentum.
By normalizing these values between 0 and 1, the tool provides a visual representation of where the current price action sits within the total "possible" range of the market's current volatility.
Signal Generation Logic
The indicator identifies potential trades based on specific interactions between these two lines and a 50-period Exponential Moving Average (EMA):
Buy Signals (Potential Upward Momentum)
A buy signal is triggered when:
- The momentum lines cross each other in a specific direction.
- The current price is positioned above the 50-period EMA, or the price is currently "inside" the moving average (meaning the market is actively interacting with it).
- If the price is exceptionally close to the moving average at the time of the crossover, the tool identifies this as a high-quality entry point.
Sell Signals (Potential Downward Momentum)
A sell signal is triggered when:
- The momentum lines cross each other in the opposite direction.
- The current price is positioned below the 50-period EMA, or the price is currently "inside" the moving average.
- Similar to the buy logic, a very close proximity to the moving average during this crossover is flagged as a high-quality signal.
Visual Output
- Trend Lines: Provide a continuous look at the relative strength of the market.
- Arrows/Markers: The script places specific visual markers on the chart to highlight confirmed buy, sell, and potential exit points based on the confluence of momentum crossings and moving average positioning.
Indicators Used
Miscellaneous
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NINA
#property indicator_separate_window
#property indicator_buffers 5
#property indicator_color1 Yellow
#property indicator_color2 DeepSkyBlue
#property indicator_color3 Green
#property indicator_color4 Red
#property indicator_color5 Blue
#property indicator_minimum 0
#property indicator_maximum 1
//---- input parameters
extern int PeriodWATR=10;
extern double Kwatr=1.0000;
extern int HighLow=0;
extern int cbars = 1000;
extern int from = 0;
extern int maP = 50;
//---- indicator buffers
double LineMinBuffer[];
double LineMidBuffer[];
double LineBuyBuffer[];
double LineSellBuffer[];
double LineExitBuffer[];
double Ma50[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
string short_name;
IndicatorBuffers(6);
//---- indicator line
SetIndexStyle(0,DRAW_LINE,STYLE_SOLID,1);
SetIndexStyle(1,DRAW_LINE,STYLE_SOLID,1);
SetIndexStyle(2,DRAW_ARROW,STYLE_SOLID,1);
SetIndexStyle(3,DRAW_ARROW,STYLE_SOLID,1);
SetIndexStyle(4,DRAW_ARROW);
SetIndexStyle(5,DRAW_NONE);
SetIndexEmptyValue(5,0);
SetIndexEmptyValue(2,0);
SetIndexArrow(2,233);
SetIndexEmptyValue(3,0);
SetIndexArrow(3,234);
SetIndexEmptyValue(4,0);
SetIndexArrow(4,174);
SetIndexBuffer(0,LineMinBuffer);
SetIndexBuffer(1,LineMidBuffer);
SetIndexBuffer(2,LineBuyBuffer);
SetIndexBuffer(3,LineSellBuffer);
SetIndexBuffer(4,LineExitBuffer);
SetIndexBuffer(5,Ma50);
IndicatorDigits(MarketInfo(Symbol(),MODE_DIGITS));
//---- name for DataWindow and indicator subwindow label
short_name="Nina("+PeriodWATR+","+Kwatr+","+HighLow+")";
IndicatorShortName(short_name);
//----
SetIndexDrawBegin(0,PeriodWATR);
SetIndexDrawBegin(1,PeriodWATR);
//----
return(0);
}
bool is_inside(int shift){
return (Ma50[shift]>MathMin(Close[shift],Open[shift]) && Ma50[shift]<MathMax(Close[shift],Open[shift]));
}
int start(){
int i,shift,TrendMin,TrendMax,TrendMid;
double SminMin0,SmaxMin0,SminMin1,SmaxMin1,SumRange,dK,WATR0,WATRmax,WATRmin,WATRmid;
double SminMax0,SmaxMax0,SminMax1,SmaxMax1,SminMid0,SmaxMid0,SminMid1,SmaxMid1;
double linemin,linemax,linemid,Stoch1,Stoch2,bsmin,bsmax;
int StepSizeMin,StepSizeMax,StepSizeMid;
double min,max,mid,h,l,c;
int b = 0;
int last = 0,ma = 0,last_ma = 0;
ArrayInitialize(Ma50,0);
ArrayInitialize(LineBuyBuffer,0);
ArrayInitialize(LineSellBuffer,0);
if(cbars>Bars || cbars == 0 ) cbars = Bars;
for(shift=cbars-1;shift>=from;shift--){
SumRange=0;
for (i=PeriodWATR-1;i>=from;i--){
dK = 1+1.0*(PeriodWATR-i)/PeriodWATR;
SumRange+= dK*MathAbs(High[i+shift]-Low[i+shift]);
}
WATR0 = SumRange/PeriodWATR;
WATRmax=MathMax(WATR0,WATRmax);
if (shift==cbars-1-PeriodWATR) WATRmin=WATR0;
WATRmin=MathMin(WATR0,WATRmin);
StepSizeMin=MathRound(Kwatr*WATRmin/Point);
StepSizeMax=MathRound(Kwatr*WATRmax/Point);
StepSizeMid=MathRound(Kwatr*0.5*(WATRmax+WATRmin)/Point);
min = Kwatr*WATRmin;
max = Kwatr*WATRmax;
mid = Kwatr*0.5*(WATRmax+WATRmin);
//b = iBarShift(Symbol(),tPeriod,Time[shift]);
c = Close[shift];//iClose(Symbol(),tPeriod,b);
h = High[shift];//iHigh(Symbol(),tPeriod,b)
l = Low[shift];//iLow(Symbol(),tPeriod,b)
if (HighLow>0){
SmaxMin0=l+2*min;
SminMin0=h-2*min;
SmaxMax0=l+2*max;
SminMax0=h-2*max;
SmaxMid0=l+2*mid;
SminMid0=h-2*mid;
if(c>SmaxMin1) TrendMin=1;
if(c<SminMin1) TrendMin=-1;
if(c>SmaxMax1) TrendMax=1;
if(c<SminMax1) TrendMax=-1;
if(c>SmaxMid1) TrendMid=1;
if(c<SminMid1) TrendMid=-1;
}
if (HighLow == 0){
SmaxMin0=c+2*min;
SminMin0=c-2*min;
SmaxMax0=c+2*max;
SminMax0=c-2*max;
SmaxMid0=c+2*mid;
SminMid0=c-2*mid;
if(c>SmaxMin1) TrendMin=1;
if(c<SminMin1) TrendMin=-1;
if(c>SmaxMax1) TrendMax=1;
if(c<SminMax1) TrendMax=-1;
if(c>SmaxMid1) TrendMid=1;
if(c<SminMid1) TrendMid=-1;
}
if(TrendMin>0 && SminMin0<SminMin1) SminMin0=SminMin1;
if(TrendMin<0 && SmaxMin0>SmaxMin1) SmaxMin0=SmaxMin1;
if(TrendMax>0 && SminMax0<SminMax1) SminMax0=SminMax1;
if(TrendMax<0 && SmaxMax0>SmaxMax1) SmaxMax0=SmaxMax1;
if(TrendMid>0 && SminMid0<SminMid1) SminMid0=SminMid1;
if(TrendMid<0 && SmaxMid0>SmaxMid1) SmaxMid0=SmaxMid1;
if (TrendMin>0) linemin=SminMin0+min;
if (TrendMin<0) linemin=SmaxMin0-min;
if (TrendMax>0) linemax=SminMax0+max;
if (TrendMax<0) linemax=SmaxMax0-max;
if (TrendMid>0) linemid=SminMid0+mid;
if (TrendMid<0) linemid=SmaxMid0-mid;
bsmin=linemax-max;
bsmax=linemax+max;
Stoch1=(linemin-bsmin)/(bsmax-bsmin);
Stoch2=(linemid-bsmin)/(bsmax-bsmin);
LineMinBuffer[shift]=Stoch1;
LineMidBuffer[shift]=Stoch2;
SminMin1=SminMin0;
SmaxMin1=SmaxMin0;
SminMax1=SminMax0;
SmaxMax1=SmaxMax0;
SminMid1=SminMid0;
SmaxMid1=SmaxMid0;
Ma50[shift] = iMA(NULL,0,maP,0,MODE_EMA,PRICE_MEDIAN,shift);
if(is_inside(shift)) last_ma = shift;
if((LineMinBuffer[shift]-LineMidBuffer[shift])*(LineMinBuffer[shift+1]-LineMidBuffer[shift+1])<0){
// BUY or SELL
if(LineMinBuffer[shift]>LineMidBuffer[shift]){
last = shift;
if(last_ma == shift || (last_ma!=0 && Ma50[last_ma]<Open[shift])){
// VERY GOOD SIGNAL - BEST TRADE
LineBuyBuffer[shift] = LineMidBuffer[shift];
if(last_ma == shift && MathAbs(Ma50[last_ma]-Open[shift])/Point < 20) LineExitBuffer[shift] = LineMidBuffer[shift];
}
}
else if(LineMinBuffer[shift]<LineMidBuffer[shift]){
last = -shift;
if(last_ma == shift || (last_ma!=0 && Ma50[last_ma]>Open[shift])){
// VERY GOOD SIGNAL - BEST TRADE
LineSellBuffer[shift] = LineMidBuffer[shift];
if(last_ma == shift && MathAbs(Ma50[last_ma]-Open[shift])/Point < 20) LineExitBuffer[shift] = LineMidBuffer[shift];
}
}
}
else{
if(last>0 && Open[shift]>Ma50[shift] && last_ma==shift+1){
LineBuyBuffer[shift+1] = LineMidBuffer[shift+1];
}
else if(last<0 && Open[shift]<Ma50[shift] && last_ma==shift+1){
LineSellBuffer[shift+1] = LineMidBuffer[shift+1];
}
}
}
return(0);
}
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