PHInkTrade Price Finder

22 de dez. de 2020

Hello there, fellow trader!

Welcome to Price Finder indicator for TradingView page.
Please join me as I present you an overview about it.

Before we begin, a few quick notes:

• Availability information is presented at the last section of this content. Please check it out to know how to get access.
  
• In addition to this description, there is also an overview video available. Please refer to the last section on this content as well.
  
• With time, some of the functionality described below may change. Please refer to Release Notes for most up-to-date information.
  

Ok now, let's get started!

What is Price Finder?

• Price Finder is a technical analysis indicator (aka "Indi" ), built on a mathematical foundation which recognizes price's fractal, multi-layered nature -- a key aspect, related to the multiple time-frames process different size traders use to make their decisions.
  
• The objective of the indicator, naturally, is to help identify high probability opportunities for successful trades, especially those which can provide a good return : risk ratio (greater than 3:1). This is very important to foster sustainable equity growth over time.
  
• In order to do that, it helps identify new positions of previously successful support and resistance levels, out of both its multi time-frame mathematical approach, and empirical evidence. By mapping these, indicator provides a good way to anticipate next levels with high success probability, as well as to validate or invalidate expectations in relation to what price is more likely to do next.
  
• Last, but not least, it also helps identify price state, in terms of trend and consolidation. Meaning that, if price is trending, we can expect it to go farther -- either higher or lower --, in a more consistent way. Or, if it is consolidating, we can expect it to remain trading inside a range.
  

Combined, these aspects help you develop an enhanced view of the market, and a better edge for your trades.

Feedbacks from beta phase

Before diving into more details, i'd like to let you know that, besides internal tests, the indicator has gone through a public beta testing phase, having received quite nice feedback from participants. You can find more information about it in the overview video, as mentioned above.

How it works?

As seen on chart below, indicator is composed of:

• a Trend Band
• two Expansion Threshold Bands and
  
• Bar colors.
  

Let's get through each of these.

Trend Band

The Trend Band is the one which runs around the middle of the indicator, and helps you assess if you should be leaning bullish or bearish, locally -- considering the time frame you are looking at. Its inflection points, also known as death crosses and golden crosses, are important events to anticipate -- and pay attention to when they happen. There's also a middle line, which helps you evaluate if price is leaning towards crossing the band to the other side.



The following chart shows some examples* of how lines can help identify potential places to have new trades.



* More information about specific trading approaches is available through complementary materials.

So, Trend Band helps us adjust our bias towards a direction. But how far can we expect price to go?
To help answer this question, the indicator also provides two other bands. Let's talk about them, next.

Expansion Threshold Bands

The Expansion Threshold Bands are the ones usually surrounding price (not always, as you'll notice). They are called the Upper Expansion Threshold Band and the Lower Expansion Threshold Band. Their purpose is to help identify potential limits, or places where price is more likely to face a contrarian force, and will probably have to decide whether to continue in the same direction, or to pull back -- end eventually revert.

On the following chart we have an example (Bitcoin, 15 minutes time-frame). It was retracing locally, but once it hit the corresponding Lower Expansion Threshold, it found strong support, making it pull back, and look to test upper structures, next. In fact, as can be seen, this support was tested and respected three times on this chart. Conversely, the Upper Expansion Threshold Band, resistance, was tested and broken twice -- an effect, and validation, of the overall uptrend Bitcoin was in.



Broken Expansion Threshold Bands

Indicator also helps adjust expectations when price breaks an Expansion Threshold. As an example, on the following chart, we see Bitcoin breaking the 15 mins lower band, after having respected it multiple times during the rise. The result was a significant correction.



So, when price breaks an Expansion Threshold Band of a particular time-frame, we can expect it to expand in that same direction for a while. In other words, we can expect it to trend in that direction, until it finds a larger time-frame Expansion Threshold which can hold it.

To help with this aspect, here enters indicator's distinctive multiple time-frame overlays functionality.

Multiple time-frame overlays

Multiple time-frames is a very important aspect to understand and consider when dealing with an asset's price, as different size traders make decisions based on each of them -- and, naturally, this requires us to deal with the combined results of all such decisions.

On the chart below, (again, Bitcoin 15 minutes time-frame), standard indicator deployment is showing where supports are for some of the lows. But there are moments when price stop "mid-air". Why is it so?



Well, this happens due to the influence of another time-frame structure (in this case, a smaller one). To identify which structures are working, it is possible to apply the indicator one or more times to the chart, and perform an empirical research. In this case, bounces were caused by the 10 minute lower threshold band, approximately.



This feature allows you to see, on a single chart, multiple time-frame structures working at once -- which, besides bringing greater clearness, can also help you save time, by skipping the handling of multiple charts.

Note: TradingView recommends using a lower time-frame chart and deploying a higher time-frame overlay. However, within a good margin, the reverse practice has proven itself to work for Price Finder, as indicator's approach is evidence-based. So, whichever smaller time-frame overlay which shows itself as working, even though on a higher time-frame chart, should continue to do so, as calculations remain proportional.

Another example below, now showing 5 minutes working as support multiple times too (besides 10 and 15).



So, by researching which supports and resistances are being repeatedly respected, out of price's multi time-frame / multi layered reality, and finding their current price levels -- both through the means of the indicator --, it is possible to anticipate high probability places for successful trades -- either in favor of the structure, if you believe in a stop-and-reverse move, or against it, if structure gets broken and allows price to start expanding / trending. Always based on both a mathematical foundation, and an empirical observation (evidence / confirmation).

Bar colors

As an additional information to help you understand if price is trending (or starting to develop trend intentions), or if it is consolidating, the indicator provides bar color schemes.

By default, it uses dark green and dark red colors for initial developments of bullish and bearish trends, bright green and bright red colors for developed, stronger trends, and orange for consolidations. Knowing such states help you build more confidence in the movement -- or not.



Color-blind friendly setting

Colors-wise, indicator also offers the possibility to use a second scheme, more friendly to color-blind users. You can change color scheme on settings panel.



Other settings

There are other ways to customize the presentation of the indicator, especially regarding multiple time-frame overlays, as we saw, but also to help you manage and reduce chart clutter, for example, in terms of number of lines being plotted.

It's possible to decide to just plot backgrounds, or some part of the structure, or avoid painting bars, etc.

Sample chart settings, explained



What you see on the chart above:

3 deployments of Price Finder, one for each of the following time frames: 1 hour ('Chart' time-frame), 15 and 4 minutes.

Custom settings:

• 1 hour: Upper and lower expansion threshold bands plotted in full. Trend band hidden;
  
• 15 minutes: Trend band hidden, expansion thresholds with just backgrounds (for better visibility);
  
• 4 minutes: likewise.
  

Price Finder working with other assets

Here are some other examples of the indicator, now working with other assets.
Time-frames used to 'calibrate' readings were observed from previous evidence on the same charts.

• Ethereum / US Dollar, 4 hour chart, with 100, 50 and 25 minutes overlays.
  
  
• S&P 500, 1 hour chart, with 30, 15 and 5 minutes overlays.
  
  
• Dow Jones Industrial Average, also 1 hour chart, with 4 hours, 15 and 5 minutes overlays.
  
  
• Gold / US Dollar, 1D chart, with 600 minutes, 4 hours, 140 and 80 minutes overlays.
  
  
• Euro / US Dollar, 4 days chart, with 1 day, 700 minutes and 4 hours overlays.
  
  

Availability and more information

For indicator availability, access instructions, and/or additional information, please use the corresponding link in the external links section below.

Thank you very much for your attention!

Cheers!

PHInkTrade