ueuito Trend Strength LSMA-Based

Another experience.... still improving

Indicator Description (English)

Name: Trend Strength LSMA-Based

Overview:
This indicator is designed to measure the strength and exhaustion of a trend based on the Least Squares Moving Average (LSMA). It combines price, trend slope, volume, and volatility to calculate a trend exhaustion score, which is then smoothed and visualized as a colored area on the chart. The indicator also plots discrete points to signal potential reversals or decreases in trend intensity.

Key Features:

LSMA-Based Trend Strength:

Calculates a Least Squares Moving Average (LSMA) of the selected timeframe.

Measures the slope of the LSMA to capture trend direction and momentum.

Trend Exhaustion Score:

Combines multiple factors:

Distance between price and LSMA

LSMA slope (trend strength)

Volume relative to its moving average

ATR-based volatility

Each factor is weighted according to user-defined inputs.

The combined score is multiplied to produce a scaled trend exhaustion value.

Smoothed Area Plot:

The trend exhaustion score is smoothed using an EMA to reduce noise.

Displayed as a colored area that changes based on trend strength:

Strong bullish exhaustion → dark green

Weak bullish exhaustion → light green

Strong bearish exhaustion → dark red

Weak bearish exhaustion → light red

Neutral → gray

Dynamic Visual Cues:

Points for reversals: small green/red circles appear when the trend changes direction.

Points for intensity decrease: small green/red circles appear when the trend weakens but has not yet reversed.

The area’s color intensity dynamically reflects the strength of the trend exhaustion, making it visually intuitive.

Multi-Timeframe Support:

The indicator can calculate the trend exhaustion based on a different timeframe from the chart, allowing for higher timeframe trend analysis on lower timeframe charts.

Customizable Settings:

LSMA period, smoothing length, volume period, ATR period

Weighting for each factor in the score calculation

Thresholds for weak/strong exhaustion

Timeframe selection

Usage:

Identify when a trend is losing strength or approaching a potential reversal.

Helps visualize the current momentum and exhaustion of bullish or bearish trends.

Can be used in conjunction with other technical tools for confirming entries or exits.

Important Note:

Depending on the asset, market volatility, and timeframe, it may be necessary to adjust the indicator settings to optimize its responsiveness and accuracy. The default parameters provide a general starting point but fine-tuning is recommended for best results.