[blackcat] L3 Bull Channel

20. Nov. 2022

Level 3
Background

This is a bullish channel with spikes for long entries. Optimized for 4H time frame.

Function

This indicator places a fast and smooth lines into a channel for 4H time frame. The channel can work as overbought and oversould threshold for judgement. Also, the fast and smooth (green , red lines) will cross together and you can judge short term momentum with their cross status as golden cross or dead cross status.
For the color definitions:
Output upper_rail = 21-day [2-day weight] moving average of the highest price*1.05, draw upper_rail
Output lower_rail = 21-day [2-day weight] moving average of the lowest price*0.95, painted yellow
Output smooth_trend = 5-day [1-day weight] moving average of the lowest price, painted red
Output fast_trend = 2-day [1-day weighted] moving average of the closing price, painted green
Output swing_long = If fast_trend wears smooth_trend, return upper_rail*1.05, otherwise return smooth_trend, draw red
Output leader_long = If fast_trend wears upper_rail, return upper_rail*1.10, otherwise return lower_rail, draw orange

Remarks
Feedbacks are appreciated.

20. Nov. 2022

Versionshinweise

correct short labels

22. Apr.

Versionshinweise

OVERVIEW
The L3 Bull Channel indicator is a comprehensive trading tool designed to identify bullish trends and potential entry points in financial markets. It employs weighted moving averages combined with dynamic rail systems to provide traders with precise buy and sell signals. The indicator uses multiple timeframes and sophisticated calculations to detect market momentum, making it particularly useful for both swing and breakout trading strategies.

FEATURES

• Dynamic Bullish Channel Formation:

Upper Rail: High-weighted WMA × 1.05
Lower Rail: Low-weighted WMA × 0.95
• Multi-Trend Analysis:

Smooth Trend Line: 5-period weighted MA
Fast Trend Line: 2-period weighted MA
• Advanced Crossover Detection:

Swing Entry Signals: Fast trend crosses smooth trend
Leader Entry Signals: Fast trend crosses upper rail
• Risk Management Tools:

Swing Entry Levels: Upper rail × 1.05
Leader Entry Levels: Upper rail × 1.10
Short Signal Identification
HOW TO USE

Setup: Apply the indicator on your desired chart timeframe.
Identify Trends: Monitor the colored trend lines for directional movement.
Entry Points:
Look for red "B1" labels indicating swing entries
Watch for yellow "B2" labels marking leader entries
Risk Management: Consider using the channel width as initial stop-loss guidance.
LIMITATIONS

⚠️ The indicator may generate false signals during choppy or sideways markets.
⚠️ Best suited for trending environments rather than ranging conditions.
⚠️ May require additional confirmation tools for optimal performance.

NOTES

🔄 Recommended for longer timeframes (Daily/Hourly).
📊 Results may vary based on individual strategy implementation.
🔧 Adjustable parameters available within the indicator settings.