Axe and Shield measures the distance between the selected Moving Average (T3, EMA, SMA) or Volume Weighted Average Price (VWAP) and high or low of the current bar. It remembers the highest distance over the selected period of time.
It will use a candle's high if the price is above the level.
It will use a candle's low if the price is below it.
Distance is always positive. If it is measured above, the axe will be green. If it is below, it will be red.
The lookback period is how far in the past you want to look for the extreme distance. By default, it is set 24h to the past on always-open markets.
I recommend using with low-period moving averages or VWAP. Sometimes, you might even see double tops on the indicator and reversal price action, which can lead to opening a position. You might as well look for divergences. When the price moves higher but remains closer to MA/VWAP, momentum might be disappearing.
Do a proper backtest to see how useful Axe and Shield's information would be to you.
Versionshinweise
⋅
Added the ability to use Triple Exponential MA (TEMA) with a period of 3 to smooth the swings.
Versionshinweise
⋅
Fixed Preview and clarified one input option
Versionshinweise
⋅
Added option to highlight London and New York sessions. This option is enabled by default. You need to disable it in the colour settings if you don't like it.
Versionshinweise
⋅
I removed functions that I don't use and made the script relatively messy.
Hello, i really like the idea behind this indicator and i would like to use it on my own indicators. Could you please share the code?
Jittra
⋅
Would it be good if it has buy/sell highlight background under some condition?
OrcChieftain
⋅
@Jittra, In theory, when it nears like 85% of the extreme and the extreme is above average historical extremes or something like that... I saw several times it made like double/triple top or almost that. But I don't like the idea ppl would try trading just based on this.