PROTECTED SOURCE SCRIPT
Market Key (Original)
This Pine Script is a sophisticated technical analysis tool designed to automate the recording and trend-tracking methodology developed by Jesse Livermore. Unlike standard momentum oscillators, this indicator focuses on price displacement and pivotal points to determine the market's path of least resistance. It categorizes price action into four distinct psychological states: Up Trend, Down Trend, Natural Rally, and Natural Reaction.
The indicator's primary strength lies in its ability to filter out market noise and minor price fluctuations. By tracking high-water marks (Resistance) and low-water marks (Support) using closing prices, the script provides a disciplined framework for identifying trend transitions and major market campaigns.
Origin and Conceptual Foundation
The original concept for this indicator is taken from the book:
"How to Trade in Stocks" by Jesse Livermore (1940)
The script specifically digitizes the "Jesse Livermore Market Key" method detailed in the book's final chapters and handwritten ledger examples. It utilizes the following core principles from the text:
Pivotal Points: Recording price points where a trend either confirms its continuation or signals a reversal.
The Natural Rules: Defining movement based on specific moves away from an established extreme.
Trend Confirmation: Requiring penetration above a previous resistance or below a previous support before declaring a change in the "Major Trend".
Time and Price: Livermore’s belief that waiting for price confirmation is more important than predicting time.
Indicator Description and Functionality
The indicator operates as a state machine that dynamically changes the color of the price line and candles to reflect current market conditions:
Major Trend (Green Background): Indicates a confirmed bullish campaign where the "path of least resistance" is upward.
Trend States (Green/Red Lines): Represents aggressive price movement in the direction of the major trend.
Correction States (Blue/Aqua Lines): Signals "Natural" movements—temporary pauses or pullbacks—that do not yet invalidate the primary market direction.
Immediate Breakout Override: A custom filter that recognizes new global highs or lows within a trend state, turning the trendline green or red instantly to capture momentum without waiting for lag-heavy confirmation.
Automated Labeling: Automatically plots the definitive closing prices of significant peaks and troughs once the required reversal criteria are met.
The indicator's primary strength lies in its ability to filter out market noise and minor price fluctuations. By tracking high-water marks (Resistance) and low-water marks (Support) using closing prices, the script provides a disciplined framework for identifying trend transitions and major market campaigns.
Origin and Conceptual Foundation
The original concept for this indicator is taken from the book:
"How to Trade in Stocks" by Jesse Livermore (1940)
The script specifically digitizes the "Jesse Livermore Market Key" method detailed in the book's final chapters and handwritten ledger examples. It utilizes the following core principles from the text:
Pivotal Points: Recording price points where a trend either confirms its continuation or signals a reversal.
The Natural Rules: Defining movement based on specific moves away from an established extreme.
Trend Confirmation: Requiring penetration above a previous resistance or below a previous support before declaring a change in the "Major Trend".
Time and Price: Livermore’s belief that waiting for price confirmation is more important than predicting time.
Indicator Description and Functionality
The indicator operates as a state machine that dynamically changes the color of the price line and candles to reflect current market conditions:
Major Trend (Green Background): Indicates a confirmed bullish campaign where the "path of least resistance" is upward.
Trend States (Green/Red Lines): Represents aggressive price movement in the direction of the major trend.
Correction States (Blue/Aqua Lines): Signals "Natural" movements—temporary pauses or pullbacks—that do not yet invalidate the primary market direction.
Immediate Breakout Override: A custom filter that recognizes new global highs or lows within a trend state, turning the trendline green or red instantly to capture momentum without waiting for lag-heavy confirmation.
Automated Labeling: Automatically plots the definitive closing prices of significant peaks and troughs once the required reversal criteria are met.
Script protegido
Esse script é publicada como código fechado. No entanto, você pode gerenciar suas escolhas de bate-papo. Por favor, abra suas Configurações do perfil
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.
Script protegido
Esse script é publicada como código fechado. No entanto, você pode gerenciar suas escolhas de bate-papo. Por favor, abra suas Configurações do perfil
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.