Dynamic Volume Adaptive Moving Average (MZ DVAMA)

28 Des 2021

INTRODUCTION

This indicator is inspired from "Vitali Apirine (Stocks & Commodities V.36:5: Adaptive Moving Averages)" but I have used Volume filtering to in order to adapt trends more precisely for better trades.
Volume adaption makes it better for adaptive moving average to detect trend health; making it easier to make decisions based on market strong momentums, consolidations or breakouts. This isn’t possible with only using simply Adaptive Moving Averages.
Adaptive Moving Averages curve doesn’t change its length based on Volume but it uses dynamic volume adaptive color for trend strength detection.

TREND DETECTION

• Green Color:
  Strong Uptrend with good volume supported momentum.
  
• Lime Color:
  Uptrend is relatively weak but still good enough to follow.
  
• Red Color:
  Strong Downtrend with volume support.
  
• Gray Color:
  Downtrend is relatively weak but still good enough to follow.
  
• Yellow Color:
  Market is either choppy, sideways or consolidating. Better to avoid taking new positions and if trade is running then its good to carry it on.
  

DEFAULTS SETTINGS

• AMA length is 200 (Better for timeframes higher than 1H)
  
• Minor length is 6
  
• Major length is 14
  
• Volume RSI period is considered to be 200 with 50 period for its Hull Moving Average
  

ALERTS

Buy/Sell Alerts will follow on when volume is breaking up above provided value. Best entry is at absolute alerts timing but other trades can be started midway based on trend condition.

1 Jan 2022

Catatan Rilis

• Volume oscillator was producing too much noise and had to take it out of equation. Only slope seems enough for adaptive moving average to work. New script can be found at:https://www.tradingview.com/script/Ies7Tygo-Slope-Adaptive-Moving-Average-MZ-SAMA/

Would apply volume oscillation for DVAMA to work better but until then use SAMA as mentioned above.

3 Jan 2022

Catatan Rilis

• I've managed to achieve dynamic slow length of DVAMA through volume breakouts. Slow length will consistently keep on adapting along with volume strength.
  
• "Relative Volume Strength Index (MZ RVSI)" is used for volume breakout detections in dynamic length calculations function.
  
• Volume based dynamic length makes DVAMA more flexible to volume changes and hence better for faster slope divergence detection. Curve behaving stiff with less slope changes is a problem in MZ SAMA which is resolved using volume and this indicator can be used in better way if volume oscillator selection parameter is adapted according to market condition.
  

6 Feb 2022

Catatan Rilis

• Converted script to Pinescript V5.
  
• Added different types of source options and default changed to (OHLC4+high+Low)/3 with Symmetrically Weighted Moving Average (SWMA) enabled. SWMA can produce mild repainting issue though.
  
• Changed AMA code into function.
  
• Changed envelope script to show gradient color between Red and Green according to trend condition.