indicator Calibration

Indicator Calibration - Multi-Indicator Consensus System
Overview

Indicator Calibration is a powerful consensus-based trading indicator that leverages the MyIndicatorLibrary (NormalizedIndicators) to combine multiple trend-following indicators into a single, actionable signal. By averaging the normalized outputs of up to 8 different trend indicators, this tool provides traders with a clear consensus view of market direction, reducing noise and false signals inherent in single-indicator approaches.
The indicator outputs a value between -1 (strong bearish) and +1 (strong bullish), with 0 representing a neutral market state. This creates an intuitive, easy-to-read oscillator that synthesizes multiple analytical perspectives into one coherent signal.

🎯 Core Concept
Consensus Trading Philosophy
Rather than relying on a single indicator that may give conflicting or premature signals, Indicator Calibration employs a democratic voting system where multiple indicators contribute their normalized opinion:

Each enabled indicator votes: +1 (bullish), -1 (bearish), or 0 (neutral)
The votes are averaged to create a consensus signal
Strong consensus (closer to ±1) indicates high agreement among indicators
Weak consensus (closer to 0) indicates market indecision or transition

Key Benefits

Reduced False Signals: Multiple indicators must agree before strong signals appear
Noise Filtering: Individual indicator quirks are smoothed out by averaging
Customizable: Enable/disable indicators and adjust parameters to suit your trading style
Universal Application: Works across all timeframes and asset classes
Clear Visualization: Simple line oscillator with clear bull/bear zones


📊 Included Indicators
The system can utilize up to 8 normalized trend-following indicators from the library:
1. BBPct - Bollinger Bands Percent

Parameters: Length (default: 20), Factor (default: 2)
Type: Stationary oscillator
Strength: Mean reversion and volatility detection

2. NorosTrendRibbonEMA

Parameters: Length (default: 20)
Type: Non-stationary trend follower
Strength: Breakout detection with momentum confirmation

3. RSI - Relative Strength Index

Parameters: Length (default: 9), SMA Length (default: 4)
Type: Stationary momentum oscillator
Strength: Overbought/oversold with smoothing

4. Vidya - Variable Index Dynamic Average

Parameters: Length (default: 30), History Length (default: 9)
Type: Adaptive moving average
Strength: Volatility-adjusted trend following

5. HullSuite

Parameters: Length (default: 55), Multiplier (default: 1)
Type: Fast-response moving average
Strength: Low-lag trend identification

6. TrendContinuation

Parameters: MA Length 1 (default: 50), MA Length 2 (default: 25)
Type: Dual HMA system
Strength: Trend quality assessment with neutral states

7. LeonidasTrendFollowingSystem

Parameters: Short Length (default: 21), Key Length (default: 10)
Type: Dual EMA crossover
Strength: Simple, reliable trend tracking

8. TRAMA - Trend Regularity Adaptive Moving Average

Parameters: Length (default: 50)
Type: Adaptive trend follower
Strength: Adjusts to trend stability


⚙️ Input Parameters
Source Settings

Source: Choose your price input (default: close)

Can be modified to: open, high, low, close, hl2, hlc3, ohlc4, hlcc4



Indicator Selection
Each indicator can be enabled or disabled via checkboxes:

use_bbpct: Enable/disable Bollinger Bands Percent
use_noros: Enable/disable Noro's Trend Ribbon
use_rsi: Enable/disable RSI
use_vidya: Enable/disable VIDYA
use_hull: Enable/disable Hull Suite
use_trendcon: Enable/disable Trend Continuation
use_leonidas: Enable/disable Leonidas System
use_trama: Enable/disable TRAMA

Parameter Customization
Each indicator has its own parameter group where you can fine-tune:

val 1: Primary period/length parameter
val 2: Secondary parameter (multiplier, smoothing, etc.)


📈 Signal Interpretation
Output Line (Orange)
The main output oscillates between -1 and +1:

+1.0 to +0.5: Strong bullish consensus (all or most indicators agree on uptrend)
+0.5 to +0.2: Moderate bullish bias (bullish indicators outnumber bearish)
+0.2 to -0.2: Neutral zone (mixed signals or transition phase)
-0.2 to -0.5: Moderate bearish bias (bearish indicators outnumber bullish)
-0.5 to -1.0: Strong bearish consensus (all or most indicators agree on downtrend)

Reference Lines

Green line (+1): Maximum bullish consensus
Red line (-1): Maximum bearish consensus
Gray line (0): Neutral midpoint


💡 Trading Strategies
Strategy 1: Consensus Threshold Trading
Entry Rules:
- Long: Output crosses above +0.5 (strong bullish consensus)
- Short: Output crosses below -0.5 (strong bearish consensus)

Exit Rules:
- Exit Long: Output crosses below 0 (consensus lost)
- Exit Short: Output crosses above 0 (consensus lost)
Strategy 2: Zero-Line Crossover
Entry Rules:
- Long: Output crosses above 0 (bullish shift in consensus)
- Short: Output crosses below 0 (bearish shift in consensus)

Exit Rules:
- Exit on opposite crossover
Strategy 3: Divergence Trading
Look for divergences between:
- Price making higher highs while indicator makes lower highs (bearish divergence)
- Price making lower lows while indicator makes higher lows (bullish divergence)
Strategy 4: Extreme Reading Reversal
Entry Rules:
- Long: Output reaches -0.8 or below (extreme bearish consensus = potential reversal)
- Short: Output reaches +0.8 or above (extreme bullish consensus = potential reversal)

Use with caution - best combined with other reversal signals

🔧 Optimization Tips
For Trending Markets

Enable trend-following indicators: Noro's, VIDYA, Hull Suite, Leonidas
Use higher threshold levels (±0.6) to filter out minor retracements
Increase indicator periods for smoother signals

For Range-Bound Markets

Enable oscillators: BBPct, RSI
Use zero-line crossovers for entries
Decrease indicator periods for faster response

For Volatile Markets

Enable adaptive indicators: VIDYA, TRAMA
Use wider threshold levels to avoid whipsaws
Consider disabling fast indicators that may overreact

Custom Calibration Process

Start with all indicators enabled using default parameters
Backtest on your chosen timeframe and asset
Identify which indicators produce the most false signals
Disable or adjust parameters for problematic indicators
Test different threshold levels for entry/exit
Validate on out-of-sample data


📊 Visual Guide
Color Scheme

Orange Line: Main consensus output
Green Horizontal: Bullish extreme (+1)
Red Horizontal: Bearish extreme (-1)
Gray Horizontal: Neutral zone (0)

Reading the Chart

Line above 0: Net bullish sentiment
Line below 0: Net bearish sentiment
Line near extremes: Strong consensus
Line fluctuating near 0: Indecision or transition
Smooth line movement: Stable consensus
Erratic line movement: Conflicting signals


⚠️ Important Considerations
Lag Characteristics

This is a lagging indicator by design (consensus takes time to form)
Best used for trend confirmation rather than early entry
May miss the first portion of strong moves
Reduces false entries at the cost of delayed entries

Number of Active Indicators

More indicators = smoother but slower signals
Fewer indicators = faster but potentially noisier signals
Minimum recommended: 4 indicators for reliable consensus
Optimal: 6-8 indicators for balanced performance

Market Conditions

Best: Strong trending markets (up or down)
Good: Volatile markets with clear directional moves
Poor: Choppy, sideways markets with no clear trend
Worst: Low-volume, range-bound conditions

Complementary Tools
Consider combining with:

Volume analysis for confirmation
Support/resistance levels for entry/exit points
Market structure analysis (higher timeframe trends)
Risk management tools (ATR-based stops)


🎓 Example Use Cases
Swing Trading

Timeframe: Daily or 4H
Enable: All 8 indicators with default parameters
Entry: Consensus > +0.5 or < -0.5
Hold: Until consensus reverses to opposite extreme

Day Trading

Timeframe: 15m or 1H
Enable: Faster indicators (RSI, BBPct, Noro's, Hull Suite)
Entry: Zero-line crossover with volume confirmation
Exit: Opposite crossover or profit target

Position Trading

Timeframe: Weekly or Daily
Enable: Slower indicators (TRAMA, VIDYA, Trend Continuation)
Entry: Strong consensus (±0.7) with higher timeframe confirmation
Hold: Months until consensus weakens significantly


🔬 Technical Details
Calculation Method
1. Each enabled indicator calculates its normalized signal (-1, 0, or +1)
2. All active signals are stored in an array
3. Array.avg() computes the arithmetic mean
4. Result is plotted as a continuous line
Output Range

Theoretical: -1.0 to +1.0
Practical: Typically ranges between -0.8 to +0.8
Rare: All indicators perfectly aligned at ±1.0

Performance

Lightweight calculation (simple averaging)
No repainting (all indicators are non-repainting)
Compatible with all Pine Script features
Works on all TradingView plans


📋 License
This code is subject to the Mozilla Public License 2.0 at mozilla.org/MPL/2.0/

🚀 Quick Start Guide

Add to Chart: Apply indicator to your chart
Choose Timeframe: Select appropriate timeframe for your trading style
Enable Indicators: Start with all 8 enabled
Observe Behavior: Watch how consensus forms during different market conditions
Calibrate: Adjust parameters and indicator selection based on observations
Backtest: Validate your settings on historical data
Trade: Apply with proper risk management


🎯 Key Takeaways
✅ Consensus beats individual indicators - Multiple perspectives reduce errors
✅ Customizable to your style - Enable/disable and tune to preference
✅ Simple interpretation - One line tells the story
✅ Works across markets - Stocks, crypto, forex, commodities
✅ Reduces emotional trading - Clear, objective signal generation
✅ Professional-grade - Built on proven technical analysis principles

Indicator Calibration transforms complex multi-indicator analysis into a single, actionable signal. By harnessing the collective wisdom of multiple proven trend-following systems, traders gain a powerful edge in identifying high-probability trade setups while filtering out market noise.