Crypto Total Market Cap Excluding BTC and ETH, $CRYPTOCAP
Beschreibung
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This indicator uses the strength of the trend from ADX to decide how the SuperTrend (ST) should behave.
Motivation ST is a great trend following indicator but it's not capable of adapting to the trend strength. The ADX, Average Directional Index measures the strength of the trend and can be use to dynamically tweak the ST factor so that it's sensitivity can adapt to the trend strength.
Implementation The indicator calculates a normalised value of the ADX based on the data available in the chart. Based on these values ST will use different factors to increase or reduce the factor use by ST: expansion or compression.
ST expansion vs compression Expanding the ST would mean that the stronger a trends get the ST factor will grow causing it to distance further from the price delaying the next ST trend flip. Compressing the ST would mean that the stronger a trends get the ST factor will shrink causing it to get closer to the price speeding up the next ST trend flip.
Features - Alerts for trend flip - Alerts for trend status - Backtestable stream - SuperTrend color gets more intense with the strength of the trend
Here is another comment... This one would be more for ST author but you might know the answer or you might find the question interesting enough to create some content to answer the question...
in setting ST upperBand/lowerBand, tradingview.com/support/solutions/43000634738-supertrend/ new bands selection is a bit mysterious 1. If new basic bands are tighter, select them over the previous values. 2. if prev close is outside the prev bands, select the new values
This is weird because both conditions are contradictory. Condition #1 seek to make the band tighter IOW, it actively choose the value that will make a trend switch more probable.
Condition #2 pick the biggest value which is currently irrelevant because the supertrend line is the other band if prev values made the trend switch.
Condition #2 must be in preparation of future iterations for after the next switch. ie: leave some space to a new trend to breath...
olivier25298
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I am not 100% convinced about the merit of this combination. A building block of ADX is ATR which is also used by ST. So I would expect ST bands to expand at the same time than ADX value is increasing. As Bollinger would say in his book, there is some collinearity in this combo...
maybe it works great. If you make a YT video demo of it, I would be interested in looking into it.
On discovering ADX, I have been charmed by it... but now... my honey moon with it is ending... I find it too slow to react to changing market conditions... It can work well and even discern almost imperceptible new trends in very specific conditions but very often it will miss the boat... even while following Wilder recommendation to not use ADX in a market having an ADXR value below 25... I have even increased the threshold to 30, and tried it in different TFs... I am not able to make it work consistently...
TheTradingParrot
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@olivier25298, I’ll explain in a video what’s the idea behind and why it can become very handy in some setups.
olivier25298
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@TheTradingParrot, many thx... since I am not using that much tradingview, believe it or not, but prior to follow you, I had zero exposure to ST. Since pretty much everyone is using it, I started to look how it is calculated and I have discovered something incredibly stunning...
It is no more, no less the Wilder Volatility system. The only difference is that the band is set from H+L/2 while Wilder system do use the SIC (Significant Close: ie best close in the trend direction since it started).
If this can help in your experiments, Wilder recommends in his book a small period (ie: 7) as opposed to 14 as in for the ADX so that your indicator is reasonably reactive to volatility changes
I have never played with ST before but I have plenty of experience with Wilder Volatility system. Its biggest problem is that while inside a position, if the market enters a consolidation phase in a tight sideway channel, volatility will become extremely low and any small price movement can push you out of your trade... It is very frustrating....
in setting ST upperBand/lowerBand, tradingview.com/support/solutions/43000634738-supertrend/
new bands selection is a bit mysterious
1. If new basic bands are tighter, select them over
the previous values.
2. if prev close is outside the prev bands, select the new values
This is weird because both conditions are contradictory.
Condition #1 seek to make the band tighter
IOW, it actively choose the value that will make a trend switch
more probable.
Condition #2 pick the biggest value which is currently irrelevant
because the supertrend line is the other band if prev values made
the trend switch.
Condition #2 must be in preparation of future iterations for after
the next switch. ie: leave some space to a new trend to breath...