Cyclic Regression is a new concept that uses Digital Signal Processing (DSP) to determine the regression of past and future cycles. This is a unique method of regression which has the ability to forecast into the future. There are several ways to use this tool. Firstly, it follows similar rules to moving averages and can be used to filter entries. Long entries should be considered when price action is above the line or the line direction is upwards. The opposite is applied for shorts, a downward direction or price action is below. The regression line is also a strong SR (Support and Resistance) or trend line so traders can expect big moves when this line is broken or a pullback is made after the break. Each new direction of regression signifies a new cycle so traders can plan for a possible big move when reaching the end of the line.
The Settings are not your typical length or lookback options: The main modifier is the "Response" input, with this the frequency response for the signal processing can be adjusted. By default it is set at 5000 but this can be boosted to something like 10000 to tune it to bigger cycles. The other modifiers include sensitivity which will fine tune the response, this can be use with in conjunction with threshold option which adjusts the threshold of the useable response.
There is also the ability to add an external sources to the signal using the source input box. This allows traders to include other sources of data such as volume or RSI.
Catatan Rilis
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Improved forecast and added a background color for next cycle.
Catatan Rilis
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Improved the formula and cycle projections, also added shadow line that acts as a SR band. Default response is now 1000
Thank you for your hard work in bringing this to the community. Much appreciated. Could you help us with the optimal settings for short term trading Vs swing trading. Thank you very much @veryfid
veryfid
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@ashdays, thanks for the comment :) Happy trading!
TarrotTrader
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Thanks for your effort. Only thing I am missing is alert functionality for price crossing signal line. If you can provide it will really enhance the script thanks
paoloparisi002
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You're the definition of Hidden Gem. I'm truly thankful for you're unlimited effort. Happy trading ;)
Bronz3Rust
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Testing this on stocks, etfs, and futures did not show a shadow plot like example above. Can someone double check? Maybe there's a script typo or maybe it's just me. I also tried using a blank layout to no avail.
Also, changing the sensitivity between soft - extreme didn't have any noticeable difference that I could see. At least for the main regression line.
veryfid
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@Bronz3Rust, Hi, the shadow only appears on cycles that are over 100 bars. I find 1000 response gives the best regression line, also when using external sources. I find 5000 gives the strongest cycles. The threshold is no longer needed for the formula and I will remove it next time I update the script.
Knighted21
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Man, this is a fascinating indicator. Is there any way you could expose the values so it's possible to try out some ideas with it?
@veryfid, the price level and bar_index of the start of the active leg and the projected bar_index and price of the endpoint of the active leg would be awesome! If those are available as plots using display.data_window it's possible to work with the coordinates from another indicator script, which would be great!
Could you help us with the optimal settings for short term trading Vs swing trading.
Thank you very much @veryfid