Pivot Clouds [SS]

Hey everyone,

Whopper indicator here that I have been working on for some time, excited to finally release it! So let's get into it!

☁️☁️ What are Pivot Clouds?! ☁️☁️

The concept for pivot clouds came from trailing and erroring different iterations of support and resistance (which ultimately led to the creation of the BIN Based Support and Resistance indicator).

In the design and creation of my BIN support and resistance indicator, I initially tried to do something similar with pivot points. However, I found pivots to be relatively ineffective as support and resistance, especially in very trendy markets, and the BIN approach reigned supreme. However, not wanting to abandon the utility of pivots, I tried something different, creating a pivot based SMA.

This proved most useful and very helpful for determining directions, rejections and trends! From there, came this indicator, the Pivot Clouds. This is currently iteration 32 haha, which will be the final iteration for the time being and most functional.

The pivot cloud indicator works by smoothing pivot highs and pivot lows over the course of your inputted length. My general suggestion is to keep it between 150 to 250. Going to low will make it incredibly choppy. Using 200 seems to be the sweet spot for most tickers.

Over the course of the pivot lookback, it collects all pivot highs and pivot lows, then averages them out to create 2 separate SMAs, those being an SMA for the pivot high and an SMA for the pivot low. Together, these create the cloud you see in the main chart.

In addition to creating this cloud, the indicator marks and tracks pivot maxes to both the upside and downside and will draw cloud support on a fall below the main cloud and cloud resistance on a rise above the main cloud, as exampled here:

Above:


And Below:


These clouds represent the average of the pivot high/pivot low and extend to the max or min (high or low depending on position on the main cloud).

💡 Alternative Abilities 💡

Resulting from the sometimes inadequacy of pivots to determine targets and resistance/support, the indicator is capable of pulling in ATR target prices. This allows the user to either use both, pivot max/min clouds AND ATR targets, or simply one or the other.

The ATR targets can be customized in the indicator settings, with a default of daily timeframe targets on a 14 ATR lookback.

Here are some examples of how the ATR targets look:



And to the upside:


📈 Standalone Strategy 📈

This indicator can be used as a standalone strategy, or to complement other strategies. I will go over both briefly, starting with standalone strategy:

1. Select your target preference (ATR, Pivot Maxes and Mins or both)
   
2. Long on a break and hold over the main cloud to the targets; or
   
3. Shrot on a break below the main cloud to the targets.
   

That simple!

🎯Supplemental to existing Strategy 🎯

This indicator for me is gold for my strategy, which involves longing or shorting to calculated target prices.

You essentially follow the above, only your targets are determined by your strategy. So for me, I look for a rejection or hold of the cloud, to long or short to my targets:



💰Customizing the Indicator 💰



Let's quickly go over these options:

• Smooth length: Creates a smooth cloud. Suggested limits are 150 - 250
  
• Lookback Length: This determines the length of lookback for the indicator to store historical pivot information and create the clouds.
  
• Pivot Lookforward/backward: Allows the user to select custom pivot timeframes. The traditional rule is 10, but 5 sometimes is preferred on larger timeframes.
  
• Show Pivot Max and Min: These enables the pivot max and min cloud for a crossover or crossunder of the main cloud.
  
• ATR timeframe: determines the ATR target price levels to look for. You can toggle weekly, daily, hourly, whichever you prefer.
  
• ATR Length: Allows you to customize the lookback for determining the ATR targets.
  
• USE ATR targets: This will turn on / off the ATR targets, if you wish to use/not use these reference points with the indicator, same as with the pivot max and min cloud toggle.
  

And that's the indicator, folks!

Hope you like it,
Take care and safe trades!🚀