alexgrover

Tops & Bottoms Finder

Introduction

I already shared a method to estimate tops and bottoms (1), the number of parameters could lead to optimization issues so i tried to make a simpler method. In this method i use a simple rescaling method based on individual direction deviation. I will explain further details below.

The Indicator

I use as source for the entire calculation an exponential moving average , the first reaction to this choice would be to think that i wanted to filter signals in order to reduce them, but the truth is that i wanted to have more signals instead, this is because the first calculations involving standard deviations are based on price direction, so by using a smooth input we can get more persistent values in a and b, but its totally up to you to use whatever you want in a, just take into account that less smooth = less signals, this is why i used this calculation process.


a = close and length = 7


a = least squares moving average and length = 25

So you could use pretty much everything you want as input.

Conclusion

The accuracy of such indicators is still relatively low but i presented a way to estimate tops and bottoms without using highest/lowest or differencing thus creating a totally new approach. I encourage you to experiment with it and share your results. If you learned something with this post then i'am happy :)

Notes

Based on several complaints i will have to leave even sooner, i think the 7 of June will be a good day, so if you need something i encourage you to ask me now. With the hope you can understand.


Thanks for reading !

(1)

Patreon: https://www.patreon.com/alexgrover

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You can also check out some of the indicators I made for luxalgo : https://www.tradingview.com/u/LuxAlgo/#published-scripts
Open-source Skript

Ganz im Spirit von TradingView hat der Autor dieses Skripts es als Open-Source veröffentlicht, damit Trader es besser verstehen und überprüfen können. Herzlichen Glückwunsch an den Autor! Sie können es kostenlos verwenden, aber die Wiederverwendung dieses Codes in einer Veröffentlichung unterliegt den Hausregeln. Sie können es als Favoriten auswählen, um es in einem Chart zu verwenden.

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