[blackcat] L2 VWAP CCI Trading System

16 de out. de 2020

Level: 2

Background

Volume-Weighted Average Price (VWAP) is a trading benchmark used by traders that indicates the average price that a security has traded for throughout the day based on volume and price. This is important as it gives traders insight into the trend and value of a security.

The Commodity Channel Index (CCI) indicator was created to identify bullish and bearish market cycles, as well as to define market turning points and the strongest and weakest market periods. CCI was developed for commodities and quickly found application in other markets, including forex.

Function

blackcat L2 VWAP CCI Trading System is an innovative indicator that combines vwap and cci indicator together. Not only long and short entries can be disclosed, but also the overbought and oversold zones are clearly observed.

Key Signal

cci ---> vwap cci indicator output
long --> long entry condition
short --> short entry condition
backtest --> indicator backtest scheme "NLX-L3 Backtest" required input source for strategy backtest
longentry --> visual long entry
shortentry --> visual short entry


Pros and Cons

Pros:

1. exact long and short entries are produced by overbought and oversold conditions
2. support "NLX-L3 Backtest" framework

Cons:

1. noise may be produced under extreme market condition
2. due to this is un-optimized version, time frame and trading pairs need to be selected


Remarks

Courtesy of nilux "NLX-L3 Backtest" easy backtest framework for dummies.
Step by step backtest guide with "NLX-L3 Backtest" framework:
STEP1: Add this indicator into your chart
STEP2: Add "NLX-L3 Backtest" into your chart
STEP3: Click "Settings" gear icon of "NLX-L3 Backtest" to select "Select L2 Indicator" in the 1st line as "blackcat L2 VWAP CCI Trading System: backtest"
STEP4: Configure your backtest other settings under "NLX-L3 Backtest" framework
STEP5: Click "OK" and view the results in "Strategy Tester" tab

Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

28 de mar.

Notas de Lançamento

OVERVIEW The '[blackcat] L2 VWAP CCI Trading System' is a technical analysis indicator designed to help traders identify potential buy and sell signals based on the Volume Weighted Average Price (VWAP) Combined Commodity Channel Index (CCI). The script overlays the VWAP CCI on a separate chart window and provides visual alerts through labels and colored fills to indicate trading opportunities.
FEATURES

Calculates and plots the VWAP CCI using customizable CCI periods.
Provides zero-line reference for easy interpretation.
Highlights overbought and oversold conditions with yellow and fuchsia colors respectively.
Generates buy ('BUY') and sell ('SELL') signals at specific threshold levels.
Displays entry signals visually with red and green horizontal lines.
Outputs a numerical backtest signal suitable for integration with automated systems like [NLX-L3].
HOW TO USE

Install the script on your TradingView platform.
Adjust the 'CCI Period' input as needed for different timeframes or market conditions.
Monitor the plotted VWAP CCI, fill areas, and labeled buy/sell signals for trade opportunities.
Consider integrating the numerical backtest output into automated trading strategies.
LIMITATIONS

The system relies on historical data and may not predict future price movements accurately.
False positives can occur due to noise in financial markets.
Customization options are limited to changing the CCI period; further adjustments require coding knowledge.
NOTES

This script does not provide real-time execution capabilities. It serves as a visualization tool for manual trading decisions.
Users should validate results independently before relying solely on this indicator for trading.
For optimal performance, consider testing the script across various assets and timeframes.