Hey everyone! Deciding to make this indicator public and open access.
This is a volume weighted close indicator for SPY. It is a statistics based indicator.
How it works:
It uses volume data mixed with some price action data to prospectively predict where SPY's price will close within a 30 minute interval.
As such, its different from other indicators in the sense that its not reactive, it proactive and actively predicts the price that SPY will see within the next 30 minutes and where SPY will most likely close at.
It has 3 bands. The main centre band (blue, but colour can be changed) is the most likely price that SPY will close at within the next 30 minutes.
The Upper Level Confidence and Lower Level Confidence bands are the expected range that the analysis thinks SPY will remain confined in based on current volume and price action.
How to Use it:
I personally use this in place of VWAP, but the applications are infinite. Take a look at the chart below:
Applications:
This is specifically programmed for SPY but I have used it with other stocks such as QQQ, UPRO and DIA. However, using it with those stocks, the upper and lower confidence bands are not helpful. But YMMV with other stocks. This is specifically designed for SPY.
Let me know your questions and thoughts!
Thanks for reading and checking this out!
Catatan Rilis
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Revised version!
Revisions: - Formatted in a cloud style - Updated the calculations - Added segments to identify high volume and low volume areas, high volume areas get shaded in yellow and low volume areas get shaded in blue - Adapted to be used with Heikin Ashi. I know many trader like myself like to use Heikin charts, this is now compatible with Heikin Ashi.
Otherwise, the functionality remains the same, you can turn all of the added features off and just use it as similar to the old version as well.
Dude this is awesome, YOU'RE AWESOME! Thanks so much
ashkanmrtzv
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Dude what?! Unbelievably kind of you to make such a thing available for the little guys on this site who follow you avidly. Quite frankly, thank you for caring.
Steversteves
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@ashkanmrtzv, Haha thanks! I am happy to help the community, I just hope you find it helpful! :)
carefulRhino97368
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Thanks! I'll give it a try in tomorrow's trading day. We'll let you know how I do :D
Steversteves
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@carefulRhino97368, Thanks! :-)! I absolutely love it for scalping FYI :).
NetoDav
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Man, I love your indicators, thank you so much. Would you be able to do something like this for crypto?
Steversteves
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@NetoDav, Thank you so much! Crypto is a hard cookie to crack because of the relatively short trading history. In general for stuff like this, you need at least 25 years of history to compare to. I can see what I can do though for sure but every time I have tried to model out crypto its not been great, haha. But will give it a try!
@Steversteves I'm trying to understand the code and how it work; and maybe learn how to better apply it to other securities. What are the o, tv, yv, h, ucl, lcl; and what are the multipliers (i.e. 0.959, -8.627E-8, 6.102E-9, 0.041, 1.6, 1.6) and how are they calculated. I'm assuming those multipliers are specific to SPY based off of historical data? Unless this info is proprietary, then understandable. Thank you in advance!
Steversteves
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@PenguinInvest, Tricks of the trade, my man. Tricks of the trade. Haha. But to answer your question generally, no this cannot be adapted to other equities with those numbers. Those are specifically made for SPY by yours truly. You can make them for other stocks but it is a labour intensive process that involves averaging out and breaking down volume profiles over a defined set of time (For SPY I went all the way back to the 90s, the better days of life in general IMO ;) ) and then model SPY's price action accordingly. To sum it up, its a labour intensive process.
I am not sure if its application is overly proprietary but it is in terms of applying these stats principles to technical indicators. That is kind of novel from what I can see touring around the available and popular technical indicators that people use. I am happy to answer any more of your questions more in depth, just send me a private message on TV.
Thanks so much