Close Bollinger Bands Crossover

[edakad 10]

Close Bollinger bands crossover is a client-side VTL indicator. This indicator is based on Bollinger bands. The idea behind Bollinger bands is when the price is above the upper band, it is too high, and a mean reversion is expected. This indicator marks a red down arrow when the price closes above the upper Bollinger band. When the price close inside the Bollinger bands after closing above the upper band, it plots a green up arrow.

This indicator is useful in short-term mean reversion trading. When the red arrow appears, consider opening a short trade and then cover the short trade when the price closes inside the band. However, in strong trends, this may fail. It is better to use these signals in rangebound market conditions.

Parameters:

1.       Period – The Bollinger band period, default is 20

2.       Deviation – The standard deviations for bands, default is 2

3.       Shift – Bar shift, default is 0

 

 

The basic assumption of Bollinger bands is price will remain inside the band most of the time, when price moves beyond the band, it will immediately come back inside the band. However, in strong trends, prices remain outside the band for longer periods before reverting inside the band. Identifying the overall market conditions before using the signals to open trades is important. In rangebound market conditions, these signals work better.

CloseBBCrossover.zip

Edited September 14, 2022 by edakad

[edakad 10]

Didi Index Clean & Reversed

Didi index clean and reversed is a client side VertexFX VTL indicator. It is adapted from the Didi index indicator. In this version the slow line is displayed. The Did index is based on moving averages and show the trend direction. Didi Index CR is used in different ways by traders. When the Index is above 1, the trend is up, when it is below 1, the trend is down. In the original version of Didi Index, Trend is up when the slow line is below 1. Hence the name reversed.

A simple method to trade is when the Didi index cross above the middle line, open a long trade, if it cross below the middle line, open a short position. The middle line is placed at 1. Use a fixed target and stoploss or base stoploss on support resistance levels. As the index shows the trend, one can open positions when pullback happens to a support/resistance level.

Parameters:

MA Method:     Moving average type,  1 SMA, 2 EMA, 3 WMA

Applied Price:    Price field for indicator calculation, 1 Close, 2 Open, 3 High, 4 Low, 5 Median, 6 Typical, 7 Weighted

Mean Period:   Mean MA Period

Slow Period:    Slow MA Period

Try different set of parameter values and back test the indicator before starting to trade with Didi Index. The indicator can be coupled with other indicators to generate reliable trading signals.

Didi Index CR.zip

[edakad 10]

Elegant Oscillator

The elegant oscillator is client side VTL indicator. It is based on signal processing algorithms and used in mean reverting trading systems. Mean Reversion theory suggests that after an extreme price move, asset prices tend to return back to normal or average levels. Prices routinely oscillate around the mean or average price but tend to return to that same average price over and over. Mean reversion strategies open trades when price moves to extreme levels, expecting price to return to the historical mean price. This is a counter trend trading strategy.

The elegant oscillator helps in identifying extreme price levels. Elegant Oscillator is a technical indicator based on signal processing techniques. It calculates the inverse Fisher transform of price and applies the smoothing filter to it. The resulting line oscillates between the values -1.0 and +1.0. Find out the extreme levels it reached in the historical chart and open a counter trend trade when it reaches around the historical extreme levels. It is better to be used with other indicators to confirm the signals.

Parameters:

Band Edge  –  Parameter to calculate the band edge, default is 20

                Oscillator Period  - Number of bars in the indicator calculations, default is 50

Price            - Price field to calculate the indicator.  1 Close, 2 Open, 3 High, 4 Low, 5 Median, 6 Typical, 7 Weighted

 

Test the indicator on charts with different parameter values and pick the best parameter values for each instrument before using it in trading.

 

Elegant Oscillator.rar