StepChoppy_v1.2a
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This tool is designed to provide a visual representation of market trends by categorizing price movements into specific behavioral stages. Instead of just showing where the price is going, it analyzes the momentum and strength of the move to help traders identify different "phases" of an uptrend or downtrend.
How the Logic Works
The script functions by combining three distinct types of data:
- Trend Identification: It uses a specialized moving average (StepMA) to determine the primary direction of the market—specifically identifying whether the current trend is bullish (Up) or bearish (Down).
- Momentum Analysis: It utilizes a Relative Strength Index (RSI) system with two different speeds: a "Fast" version and a "Slow" version. This allows the script to compare immediate price velocity against longer-term momentum.
- Cross-Referencing: By comparing the relationship between these three data points, the script classifies the market into eight distinct categories, represented visually as colored bars in a separate window.
The Eight Market States
The tool divides the market into two primary directions, each with four unique "sub-states":
Uptrend Phases (Bullish):
- Strong UpTrend: Indicates high momentum where the price is moving upward with significant strength.
- Retrace UpTrend: Suggests a temporary pullback or cooling-off period within an overall bullish move.
- Choppy UpTrend: Signals a state of indecision or "noise" while the price remains in an upward bias.
- Be Ready to Change UpTrend: A warning signal indicating that the upward momentum is weakening and a potential reversal may be approaching.
Downtrend Phases (Bearish):
- Strong DownTrend: Indicates powerful, consistent downward movement.
- Retrace DownTrend: Suggests a temporary bounce or relief in an overall bearish move.
- Choppy DownTrend: Signals erratic, unstable price action while the trend is generally downward.
- Be Ready to Change DownTrend: A warning signal indicating that the downward momentum is fading and an upward shift may occur.
Summary for the User
The primary goal of this logic is to provide a "weather report" for the market. Rather than simply telling you "up" or "down," it informs you about the quality of the move. It helps differentiate between a high-confidence trend that is safe to follow and a "choppy" or "exhausted" trend where traders might want to exercise caution or prepare for a reversal.
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StepChoppy_v1.2a
//+------------------------------------------------------------------+
//| StepChoppy_v1.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_separate_window
#property indicator_minimum -0.05
#property indicator_maximum 1.05
#property indicator_buffers 8
extern string step_ma = "StepMA_v7a";
//---- input parameters
int Length=10;
double StepSizeFast=5;
double StepSizeSlow=15;
int MAPeriod=1;
int Price=0;
int Mode=2;
//---- buffers
double UpBuffer1[];
double UpBuffer2[];
double UpBuffer3[];
double UpBuffer4[];
double DnBuffer1[];
double DnBuffer2[];
double DnBuffer3[];
double DnBuffer4[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//----
SetIndexStyle(0,DRAW_HISTOGRAM,0,3,MediumBlue);
SetIndexStyle(1,DRAW_HISTOGRAM,0,3,DodgerBlue);
SetIndexStyle(2,DRAW_HISTOGRAM,0,3,LightBlue);
SetIndexStyle(3,DRAW_HISTOGRAM,0,3,Aqua);
SetIndexStyle(4,DRAW_HISTOGRAM,0,3,Crimson);
SetIndexStyle(5,DRAW_HISTOGRAM,0,3,Tomato);
SetIndexStyle(6,DRAW_HISTOGRAM,0,3,Orange);
SetIndexStyle(7,DRAW_HISTOGRAM,0,3,Yellow);
SetIndexBuffer(0,UpBuffer1);
SetIndexBuffer(1,UpBuffer2);
SetIndexBuffer(2,UpBuffer3);
SetIndexBuffer(3,UpBuffer4);
SetIndexBuffer(4,DnBuffer1);
SetIndexBuffer(5,DnBuffer2);
SetIndexBuffer(6,DnBuffer3);
SetIndexBuffer(7,DnBuffer4);
//----
string short_name="StepChoppy";
IndicatorShortName(short_name);
SetIndexLabel(0,"Strong UpTrend");
SetIndexLabel(1,"Retrace UpTrend");
SetIndexLabel(2,"Choppy UpTrend");
SetIndexLabel(3,"Be ready to change UpTrend");
SetIndexLabel(4,"Strong DownTrend");
SetIndexLabel(5,"Retrace DownTrend");
SetIndexLabel(6,"Choppy DownTrend");
SetIndexLabel(7,"Be ready to change DownTrend");
//----
SetIndexDrawBegin(0,Length);
SetIndexDrawBegin(1,Length);
SetIndexDrawBegin(2,Length);
SetIndexDrawBegin(3,Length);
SetIndexDrawBegin(4,Length);
SetIndexDrawBegin(5,Length);
SetIndexDrawBegin(6,Length);
SetIndexDrawBegin(7,Length);
//----
return(0);
}
//+------------------------------------------------------------------+
//| StepChoppy_v1 |
//+------------------------------------------------------------------+
int start()
{
int i,counted_bars=IndicatorCounted();
double RSI, FastRSI, SlowRSI, StepMA, UpTrendMA, DnTrendMA;
//----
if(Bars<=Length) return(0);
//---- initial zero
if(counted_bars<1)
for(i=1;i<=Length;i++)
{
UpBuffer1[Bars-i]=0.0;
UpBuffer2[Bars-i]=0.0;
UpBuffer3[Bars-i]=0.0;
UpBuffer4[Bars-i]=0.0;
DnBuffer1[Bars-i]=0.0;
DnBuffer2[Bars-i]=0.0;
DnBuffer3[Bars-i]=0.0;
DnBuffer4[Bars-i]=0.0;
}
//----
if ( counted_bars > 0 ) int limit=Bars-counted_bars;
if ( counted_bars ==0 ) limit=Bars-Length-1;
for(i=limit;i>=0;i--)
{
UpTrendMA = iCustom(NULL,0,step_ma,Length,1.0,0,0,0,0,true,2,0,1,i);
DnTrendMA = iCustom(NULL,0,step_ma,Length,1.0,0,0,0,0,true,2,0,2,i);
RSI=iCustom(NULL,0,"StepRSI_v5.2",Length,StepSizeFast,MAPeriod,Price,Mode,0,i);
FastRSI=iCustom(NULL,0,"StepRSI_v5.2",Length,StepSizeFast,MAPeriod,Price,Mode,1,i);
SlowRSI=iCustom(NULL,0,"StepRSI_v5.2",Length,StepSizeSlow,MAPeriod,Price,Mode,1,i);
UpBuffer1[i] =UpBuffer1[i+1];
UpBuffer2[i] =UpBuffer2[i+1];
UpBuffer3[i] =UpBuffer3[i+1];
UpBuffer4[i] =UpBuffer4[i+1];
DnBuffer1[i] =DnBuffer1[i+1];
DnBuffer2[i] =DnBuffer2[i+1];
DnBuffer3[i] =DnBuffer3[i+1];
DnBuffer4[i] =DnBuffer4[i+1];
if (FastRSI > SlowRSI && RSI > FastRSI && UpTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 1.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 0.0;}
else if (FastRSI > SlowRSI && RSI < FastRSI && UpTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 1.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 0.0;}
else if (FastRSI < SlowRSI && RSI > FastRSI && UpTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 1.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 0.0;}
else if (FastRSI < SlowRSI && RSI < FastRSI && UpTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 1.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 0.0;}
else if (FastRSI < SlowRSI && RSI < FastRSI && DnTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 1.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 0.0;}
else if (FastRSI < SlowRSI && RSI > FastRSI && DnTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 1.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 0.0;}
else if (FastRSI > SlowRSI && RSI < FastRSI && DnTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 1.0;DnBuffer4[i] = 0.0;}
else if (FastRSI > SlowRSI && RSI > FastRSI && DnTrendMA!=EMPTY_VALUE)
{UpBuffer1[i] = 0.0;UpBuffer2[i] = 0.0;UpBuffer3[i] = 0.0;UpBuffer4[i] = 0.0;
DnBuffer1[i] = 0.0;DnBuffer2[i] = 0.0;DnBuffer3[i] = 0.0;DnBuffer4[i] = 1.0;}
}
//----
return(0);
}
//+------------------------------------------------------------------+
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