INTRO The indicator is calculating multiple moving averages on the value of price change %. It then combines the normalized (via arctan function) values into a single normalized value (via simple average). The total error from the center of gravity and the angle in which the error is accumulating represented by 4 waves:
BLUE = Good for chance for price to go up GREEN = Good chance for price to continue going up ORANGE = Good chance for price to go down RED = Good chance for price to continue going down
A full cycle of ORANGE\RED\BLUE\GREEN colors will ideally lead to the exact same cycle, if not, try to understand why.
NOTICE- This indicator is calculating large time-windows so It can be heavy on your device. Tested on PC browser only.
My visual setup: 1. Add two indicators on-top of each other and merge their scales (It will help out later). 2. Zoom out price chart to see the maximum possible data. 3. Set different colors for both indicators for simple visual seperation. 4. Choose 2 different values, one as high as possible and one as low as possible. (Possible - the indicator remains effective at distinguishing the cycle).
Manual calibration: 0. Select a fixed chart resolution (2H resolution minimum recommended). 1. Change the "mul2" parameter in ranges between 4-15 . 2. Observe the "Turning points" of price movement. (Typically when RED\GREEN are about to switch.) 2. Perform a segmentation of time slices and find cycles. No need to be exact! 3. Draw a square on price movement at place and color as the dominant wave currently inside the indicator.
This procedure should lead to a full price segmentation with easier anchoring.
it's not Very successful i'm afraid but worth a try
CHAUANHTUYET
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impressive ! OP
simon.tys
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Also just wondering if higher value amounts of the red, blue, green and orange have higher weighting than other colours?
For example, if orange values showed started becoming higher than the green should I look at a reversal of price?
Cheers
Spectrum101
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@Simon.tys, Hi Simon. The colors are evenly weighted. Orange is the color that is between Green and Red. Blue is the color that is between Red and Greed. Therefore, your assumption is correct. Notice however that Orange can become Green or Red, sometimes its 50:50 and somethings not.
BeursmoIenNL
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Hi, Very nice idea to test. I convert the script to V5, but the output is different then V3. Can you explain this?