Hello,
This is my first message on the forum, thank you for welcoming me into your community. 🙂
I’m a counter trend trader, for that I need to have rebound zones.
I use the Donchian channels, but I find it less relevant than having zones on the chart.
I’d like someone to help me create a zone indicator, and a divergence indicator based on a personal indicator.
1. Divergence indicator based on Donchian channels:
– I would need to use my personal indicator Donchian%D (similar to boll%b) over 100 periods. Here is his code:
2. Area indicator, example for a sales area :
– The indicator will have to take into account the last 100 (ideally it should be a modifiable variable) higher.
– It will have to draw a zone that goes, horizontally, from the highest point to the highest fence (the goal is to have a zone with only the wicks).
Sometimes the high point will be on a green candle, sometimes on a red candle.
On the other hand you should always consider the fence of the last green candle for the second point.
– The indicator should draw this area only if there was a first bounce on this area. This avoids drawing areas in which there has been profit taking but which will not reverse the prices when they come back to test it. With a zone that includes the reversal and an impact, I bet that the accumulation of insiders is not over and that there will be a rebound in this zone on the 2nd impact.
– The indicator will have to extend this zone, horizontally, as long as either 2 consecutive bullish candles have not fenced over this zone (this avoids the end of the range while avoiding to remove the zone when a false break will take place).
For a shopping area the rules will have to be reversed.
The goal is to create a screener that will allow me to quickly find the assets that are in reversal zones.
PS: to find reversals with the divergence indicator, it should only take into account divergences if the levels on the Donchian%D indicator are in the extremes: below 20 or above 80
Your indicators code is a stochastic 100 periods. I haven’t read all your descriptions, but a stochastic divergences indicator could help in that case?
Yes @Nicolas, for the calculation the Donchian%D indicator is based on 100 periods, but it’s not a stochastic.
It’s an indicator similar to the boll% B, but instead of showing the placement of the price in relation to the bollinger bands, it does so with the Donchian channel.
Sorry for the link, the accompanying picture was wrong.
To indicate a divergence, the simplest is a binary indicator like the PRT RSI Divergence indicator.
Ideally, when a divergence is detected, the indicator will display a rectangle until the indicator has moved out of an area of extreme.
In the screenshot I’ve given you an example, you have the price at the top, the Donchian%D indicator at the bottom (just there to show you the divergence and the exit from the extreme zone), and the RSI Divergence indicator in the middle.
I added a red zone on this indicator to show you what I want: a zone that stays as long as the indicator is above 80 or below 20.
I ask you this because in my algo, my conditions to take position will be a divergence, then an exit from the extreme zone. Thank you for your help
but instead of showing the placement of the price in relation to the bollinger bands, it does so with the Donchian channel.
Yes, like a Stochastic does. See the attached picture, your indicator is below and the Stochastic is above. So I assume a Stochastic divergences indicator is your solution, even if you need some custom coding about how to find the relevant divergences.
Yes? I didn’t work on this, I thought you were missing the fact that it was a stochastic divergence? Anyway, let me take time for resting, I still did not take any days off this year, will look at that next year.
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