OPEN-SOURCE SCRIPT
My TMwP
## Indicator Description
This indicator is an enhanced version of the Trend Magic indicator, incorporating a clearly defined pivot line to visually indicate potential trend reversals.
The original Trend Magic indicator leverages two key components:
- **Commodity Channel Index (CCI)**: A momentum-based oscillator developed by Donald Lambert in 1980, which measures the current price relative to its average over a specified period.
- **Average True Range (ATR)**: A volatility indicator that captures market volatility by measuring price movement ranges.
### How the Indicator Works
The Commodity Channel Index (CCI) calculation involves three primary steps:
1. **Typical Price Calculation**
The typical price is the average of each period's high, low, and close prices:
$$
\text{Typical Price} = \frac{\text{High} + \text{Low} + \text{Close}}{3}
$$
*(In this indicator, the built-in variable `hlc3` is used.)*
2. **Simple Moving Average (SMA) of Typical Price**
The indicator calculates an SMA of the typical price over a user-defined period.
3. **CCI Calculation**
Finally, the CCI is computed as the difference between the typical price and its SMA, divided by a multiple of the mean deviation.
### Pivot Line and Trend Reversal
The pivot line added to this enhanced Trend Magic indicator clearly marks the price level at which a trend reversal would occur. Specifically, when the asset's price crosses and closes beyond the SMA of the typical price, a pivot occurs—signaling a potential change in market direction. This pivot line thus provides traders with an intuitive visual reference for identifying critical trend reversal points.
### Customizable Parameters
Users can easily customize key parameters through input settings:
- **CCI Period**: Adjusts sensitivity to momentum shifts.
- **ATR Multiplier**: Modifies volatility responsiveness.
- **ATR Period**: Defines the lookback period for volatility calculations.
By fine-tuning these parameters, you can adapt the indicator to their preferred trading style and market conditions.
This indicator is an enhanced version of the Trend Magic indicator, incorporating a clearly defined pivot line to visually indicate potential trend reversals.
The original Trend Magic indicator leverages two key components:
- **Commodity Channel Index (CCI)**: A momentum-based oscillator developed by Donald Lambert in 1980, which measures the current price relative to its average over a specified period.
- **Average True Range (ATR)**: A volatility indicator that captures market volatility by measuring price movement ranges.
### How the Indicator Works
The Commodity Channel Index (CCI) calculation involves three primary steps:
1. **Typical Price Calculation**
The typical price is the average of each period's high, low, and close prices:
$$
\text{Typical Price} = \frac{\text{High} + \text{Low} + \text{Close}}{3}
$$
*(In this indicator, the built-in variable `hlc3` is used.)*
2. **Simple Moving Average (SMA) of Typical Price**
The indicator calculates an SMA of the typical price over a user-defined period.
3. **CCI Calculation**
Finally, the CCI is computed as the difference between the typical price and its SMA, divided by a multiple of the mean deviation.
### Pivot Line and Trend Reversal
The pivot line added to this enhanced Trend Magic indicator clearly marks the price level at which a trend reversal would occur. Specifically, when the asset's price crosses and closes beyond the SMA of the typical price, a pivot occurs—signaling a potential change in market direction. This pivot line thus provides traders with an intuitive visual reference for identifying critical trend reversal points.
### Customizable Parameters
Users can easily customize key parameters through input settings:
- **CCI Period**: Adjusts sensitivity to momentum shifts.
- **ATR Multiplier**: Modifies volatility responsiveness.
- **ATR Period**: Defines the lookback period for volatility calculations.
By fine-tuning these parameters, you can adapt the indicator to their preferred trading style and market conditions.
Script de código aberto
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Aviso legal
As informações e publicações não devem ser e não constituem conselhos ou recomendações financeiras, de investimento, de negociação ou de qualquer outro tipo, fornecidas ou endossadas pela TradingView. Leia mais em Termos de uso.
Script de código aberto
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Aviso legal
As informações e publicações não devem ser e não constituem conselhos ou recomendações financeiras, de investimento, de negociação ou de qualquer outro tipo, fornecidas ou endossadas pela TradingView. Leia mais em Termos de uso.