OPEN-SOURCE SCRIPT

High Probability OS/OB {DCAquant}

DCAquant - High Probability OS/OB
The DCAquant - High Probability OS/OB Pine Script is a sophisticated indicator that provides insights into overbought (OB) and oversold (OS) conditions based on Hull Moving Averages (HMA) and Volume Weighted Moving Averages (VWMA). Here's a detailed breakdown of its functionality:

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THIS INDICATOR IS ONLY WRITTEN FOR BTC, ETH and TOTAL!!!!!!!!!!!!!
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Functionality
The script identifies high-probability OB and OS zones by combining multiple moving averages (MAs).
1. Volume Weighted Moving Average (VWMA)
  • The VWMA function computes the VWMA over a specified length, incorporating both the price and volume.


2. Hull Moving Average with Volume Weight (HMA-VW)
  • The hullma_vw function calculates the HMA using the VWMA. This involves:

  • Computing VWMAs over the full length and half-length.

  • Using these VWMAs to derive the HMA-VW through a weighted approach.



5. Standard Hull Moving Average (HMA)
  • The hull function computes the HMA using the standard weighted moving average (WMA).


4. Smoothed HMA-VW
  • This is an Exponential Moving Average (EMA) of the HMA-VW to smooth out short-term fluctuations.


How this works
  • First, the distance between the 2 MA's is calculated.

  • The distance is scored against the average price of the last 100 days.

  • By getting this score we can calculate extremes


The Extremes are categorized into 4 levels. The transparency of the background color distinguishes these 4 levels.
Snapshot

Only the MOST extremes are plotted ON THE CHART. Within the indicator, all 4 levels are plotted.
Snapshot

Usage
  • Extreme Buy zone: Consider entering the market when the indicator shows deep negative values (oversold). These are highlighted with a cyan background, with increasing opacity indicating stronger buy signals (Level 4 Zones).

  • Extreme Sell Zone: Consider exiting the market when the indicator shows high positive values (overbought). These are highlighted with a magenta background, with increasing opacity indicating stronger sell signals (Level 4 Zones).


Disclaimer
This indicator should not be used in isolation. It is recommended to use this as part of a systematic approach, incorporating other tools and analysis methods to confirm signals and make well-informed trading decisions.
CyclesMoving AveragesPortfolio management

Open-source Skript

Ganz im Sinne von TradingView hat dieser Autor sein/ihr Script als Open-Source veröffentlicht. Auf diese Weise können nun das Script auch andere Trader verstehen und prüfen. Vielen Dank an den Autor! Sie können das Script kostenlos verwenden. Die Nutzung dieses Codes in einer Veröffentlichung wird in unseren Hausregeln reguliert. Sie können es als Favoriten auswählen, um es in einem Chart zu verwenden.

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