Twiggs Money Flow

kemarin

Twiggs Money Flow (TMF)

This indicator is an implementation of the Twiggs Money Flow (TMF), a volume-based tool designed to measure buying and selling pressure over a specified period. TMF is an enhancement of Chaikin Money Flow (CMF), utilizing more sophisticated smoothing techniques for improved accuracy and reduced noise. This version is highly customizable and includes advanced features for both new and experienced traders.

What is Twiggs Money Flow?

Twiggs Money Flow was developed by Colin Twiggs to provide a clearer picture of market momentum and the balance between buyers and sellers. It uses a combination of price action, trading volume, and range calculations to assess whether a market is under buying or selling pressure.

Unlike traditional volume indicators, TMF incorporates Weighted Moving Averages (WMA) by default but allows for other moving average types (SMA, EMA, VWMA) for added flexibility. This makes it adaptable to various trading styles and market conditions.

Features of This Script:

Customizable Moving Average Types:

Select from SMA, EMA, WMA, or VWMA to smooth volume and price-based calculations.

Tailor the indicator to align with your trading strategy or the asset's behavior.

Optional HMA Smoothing:

Apply Hull Moving Average (HMA) smoothing for a cleaner, faster-reacting TMF line.
Perfect for traders who want to reduce lag and capture trends earlier.
Dynamic Thresholds for Signal Filtering:

Set user-defined thresholds for Long (LT) and Short (ST) signals to highlight significant momentum.

Focus on actionable trends by ignoring noise around neutral levels.
Bar Coloring for Visual Clarity:

Automatically colors your chart bars based on TMF values:

Aqua for strong bullish signals (above the long threshold).
Fuchsia for strong bearish signals (below the short threshold).
Gray for neutral or undecided market conditions.
Ensures that trend direction and strength are visually intuitive.

Configurable Lookback Period:

Adjust the sensitivity of TMF by customizing the length of the lookback period to suit different timeframes and market conditions.

How It Works:

True Range Calculation: The script determines the high, low, and close range to calculate buying and selling pressure.

Adjusted Volume: Incorporates the relationship between price and volume to gauge whether trading activity is favoring buyers or sellers.

Weighted Moving Averages (WMAs): Smooths both volume and adjusted volume values to eliminate erratic fluctuations.

TMF Line: Computes the ratio of adjusted volume to total volume, representing the net buying/selling pressure as a percentage.

HMA Option (if enabled): Smooths the TMF line further to reduce lag and enhance trend identification.

Bar Coloring Logic:

Bars are colored dynamically based on TMF values, thresholds, and smoothing preferences.
Provides an at-a-glance understanding of market conditions.

Input Parameters:

Lookback Period: Defines the number of bars used to calculate TMF (default: 21).
Use HMA Smoothing: Toggle Hull Moving Average smoothing (default: true).
HMA Smoothing Length: Length of the HMA smoothing period (default: 14).
Moving Average Type: Select SMA, EMA, WMA, or VWMA (default: WMA).
Long Threshold (LT): Threshold value above which a long signal is considered (default: 0).
Short Threshold (ST): Threshold value below which a short signal is considered (default: 0).

How to Use It:

Confirm Trends: TMF can validate trends by identifying periods of sustained buying or selling pressure.
Divergence Signals: Watch for divergences between price and TMF to anticipate potential reversals.
Filter Trades: Use the thresholds to ignore weak signals and focus on strong trends.
Combine with Other Indicators: Pair TMF with trend-following or momentum indicators (e.g., RSI, Bollinger Bands) for a comprehensive trading strategy.

Example Use Cases:

Spotting breakouts when TMF crosses above the long threshold.
Identifying sell-offs when TMF dips below the short threshold.
Avoiding sideways markets by ignoring neutral (gray) bars.

Notes:

This indicator is highly customizable, making it versatile across different assets (e.g., stocks, crypto, forex).

While the default settings are robust, tweaking the lookback period, moving average type, and thresholds is recommended for different trading instruments or strategies.

Always backtest thoroughly before applying the indicator to live trading.

This version of Twiggs Money Flow goes beyond standard implementations by offering advanced smoothing, custom thresholds, and enhanced visual feedback to give traders a competitive edge.

Add it to your charts and experience the power of volume-driven analysis!

kemarin

Catatan Rilis

scale = scale.left to avoid chart compression for better visualization.

kemarin

Catatan Rilis

.