Works with up to 7 markets simultaneously to find price divergences.
Study Forex pairs, stocks, crypto alt coins.
Find potential entries quicker.
This indicator analyzes 6 markets and one spread (or 7 and no spread) against the currently loaded instrument,
with support for complex formulas. This indicator finds positive and negative correlations intrabar and throughout
the specified time frame simultaneously. It employs a weighting system and score threshold
(everything is user-definable) and signals upon positive or negative score. Alerts are included
for intrabar and overall positive and negative correlations.
This indicator analyzes 6 different markets and 1 spread (or 7 different markets if no spread) and
measures correlations between them. The squares on the background are individual
correlations (intrabar) and the circles to the right-hand side depict whether the markets have risen
or fallen in price since the start of the specified time frame (red/green or gray for neutral).
To the right of the circles you have the instrument numbers. The numbers represent the instruments you
have specified, in order. Above these numbers and circles you will find two square icons.
You will notice the left-most icon has the caption of "Overall Score +" (or -) and the right-most icon
has the caption of "Intrabar Score +" (or -). The overall score measures the correlation score from the
start of the time frame to the present time. The intrabar icon measures the correlation score of
individual candles. The scoring system implements weighting which uses scores for each individual instrument
and all scores are user-definable (positive and negative). There is also a threshold level which is user-definable,
if the score reaches or crosses this level it will trigger the aforementioned signal icons.
The analyzation time frame is decided by the user. The Correlated Market Matrix can calculate from a
given date to present (real-time), or between two specified historic dates.
You are able to represent the correlations using the close (price) of the instrument or an (speed is user-adjustable).
The spread has the individual option to use or close (price) separately from the other instruments.
You have the option to assign the weight of any number (0 to 100) to any instrument if the instrument is .
You additionally have the option of subtracting the numbers if it is (-100 to 0).
You may assign both and weights to each instrument at the same time to obtain maximum balance.
If you do not desire custom weighting, simply leave the weights at 1.
The negative vs positive levels are then measured, and whichever score is the strongest determines if the
square icon displays "Overall Score +" or "Overall Score -" (same for Intrabar).
"Score +" means that the score is equal to or greater than the threshold.
"Score -" means that the score is less than the threshold.
Additionally you are provided the option of visualizing the actual correlation lines. This is useful in the sense that
you may view the direction of that particular secondary instrument without actually opening its chart. The color red
implies that the correlation is falling, while green implies it is rising. Please note that due to
limitations you cannot see the actual correlation value of these lines, and also this is an experimental feature so lines
may not always appear appropriately. In testing a line may vanish momentarily here and there but it is somewhat rare.
The background squares will tell you the actual state of the correlation.
HOW DO YOU READ IT?
The numbers represent the instrument you selected in that number slot.
The circles to the left of the numbers indicate if that market is up or down since the beginning of the specified timeframe.
Red means price is down, green means price is up, gray is neutral.
The icon "Intrabar Score +" or "Intrabar Score -" indicates whether the majority of markets are over their score threshold
(negative or positive correlation) for the current candle only.
If this is "Neutral" then there is no current score.
The icon "Overall Score +" or "Overall Score -" indicated the majority of markets are over their score threshold (negative or
positive correlation) for the OVERALL time frame (start to current, or start to finish if you are not using in real-time).
If this is "Neutral" then there is no current score.
For individual candle correlations, if the secondary instrument is up and the main instrument is down, the boxes are red.
If secondary instrument is down and main instrument is up, boxes are green.
If correlation lines are red then the correlation is becoming negative, if they're green then they're becoming positive.
This does not mean there is a negative or positive correlation, only that the correlation is rising or falling.
The background squares will tell you the state of the correlation.
If you are using a white or bright colored chart, click the gear icon next to the indicator name.
Select the "Style" tab. The first option "Time frame Background Color" should be adjusted to either
black or white with no transparency (take note of the slider underneath the color squares).
This will make the matrix appear correctly.
By clicking the gear icon next to the indicator name, you are presented with a host of options.
The options are as follows, in order of appearance:
- Correlation Length : Amount of bars to look back for the correlation.
- Show Correlation Lines : Chose whether to display the correlation lines or not.
- Use Rising/Falling Colors : Use rising/falling colors for correlation lines instead of unique colors.
- Instrument Source : Chose from 'Price' or process the instrument through instead.
- Price Source : This source works for both "Price" source and the source.
- Speed : Speed of the if 'Instrument Source' is set to 'EMA'.
- Use on Spread 1 : Use on the 'Spread Instrument 1'. If unchecked, close is used by default.
- Use on Spread 2 : Use on the 'Spread Instrument 2'. If unchecked, close is used by default.
- Speed for Spread 1 : Speed of for Spread 1 if is used instead of 'close'.
- Speed for Spread 2 : Speed of for Spread 2 if is used instead of 'close'.
- Disable Spread and use Instrument 1 as correlated market instead : By default, the indicator takes both spread
instruments and calculates the spread between each (instrument1-instrument2=spread). If this feature is enabled, the indicator
will use only the 'Spread Instrument 1' and calculate it in the same manner as the other markets.
This is useful if you do not wish to use a spread and would rather have an extra market.
- Positive Weight of Instrument (1-7/spread) : Positive weight for the instrument.
It is recommended to enter only positive numbers here. If left 0, no weight will be added to the instrument but the indicator will
signal "Score -" if all others are also 0. If left at 1, if more markets are positive than negative, the indicator will present "Score +".
- Negative Weight of Instrument (1-7/spread) : This works in the same way as positive weight except it is recommended you enter
only negative numbers here (example: -1.5, -20). This number is subtracted from the overall score. If left 0, no weight will be
added to the instrument but the indicator will signal "Score -" if all others are also 0. If left at 1, if more markets are negative than positive,
the indicator will present "Score -".
- Threshold for score to be determined : if the weighting score of the instruments is this number or greater then
the square signal icon of + (greater) or - (lesser) is triggered.
- Instrument (1-6) : This is where you select which instruments/securities you wish to analyze. This input also
supports complex formulas, same as you'd enter them on your chart.
- Spread Instrument 1 : Instrument of part 1 of spread calculation
- Spread Instrument 2 : Instrument of part 2 of spread calculation
- From Month/Day/Year/Hour/Minute : Display data beginning at this specified time.
- To Month/Day/Year/Hour/Minute : Stop analyzing data at this specified time. To have it calculate indefinitely
in real-time, then the "To" settings should be left at Month: 12, Day: 31, Year: 2222, Hour: 23, Minute: 59.
- Time frame background color : The background color of the viewing area, especially helpful for white charts where colors may become faded.
- Correlation Line (1-7) : Properties for the displayed lines (if enabled). The first two colors are for rising and falling respectively
(if "Use rising/falling colors" is enabled), the last color is the default color of the line. This last color
will also be used for neutral if "rising/falling" is enabled.
- Instrument Label (1-7,Spread) : Properties for the right-hand numbered column, denoting which line is which instrument.
- Separator (1-8) : Solid lines between instruments
- Price Circle (1-7) : Circles between labels and background colors, denoting price rise/fall.
- Score + or - : Score icon above the instrument numbers
- Fill Row (1-6, Spread) : Background colors for the matrix. Default is red and green.
Have an idea? Customized logic is available for this framework.
This is not financial advice and this indicator system does not guarantee or claim to make profit.
The signals and ideas contained within this page and indicator are provided on an as-is basis. Use at your own risk.
Fixed circles and other shapes/numbers to move with time frame.
Fixed circle colors.
Added background color bar indicating if the main instruments price is greater or less than the start time.
Changed correlation lines to reflect negative/positive correlation.
Correlation lines are to be read as such:
GREEN = 1 to 0.7
BLUE = 0.7 to 0.3
GRAY = less than 0.3 and greater than -0.3
ORANGE = -0.3 to -0.7
RED = -0.7 to -1