This script fires off a buy alert when the ADX is rising and above a user-defined value (default 25). It fires off a sell signal when ADX starts sloping downward. The lookback period to determine if it is sloping up/down (in bars) is also configurable by the user. The plot highlights green when there is a "go" signal. Thanks to @9e52f12edd034d28bdd5544e7ff92e for the idea.
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Changed the line at which the slope is ignored (below 25) to a shaded area. Not sure I like it though because of the dashed lines and the fact that there is space below 0. Let me know your thoughts and might change it back to being a single line.
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Completely swapped out the code calculating the ADX and replaced it with code for DMI so you can look at the Directional Movement in addition to ADX.
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Added long/short conditions based on DMI values.
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Added all the filtering from the ADX | DMI Trend Strategy. This way the visual on the bottom pane will match up with the entries/exits in the strategy.
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Removed the filtering that I added - this was causing the green/red shading to prematurely exit when all the filtering conditions weren't true anymore which was not what I wanted.
So now this just looks for a rising ADX above a certain level and the D+ and D- lines to indicate bull/bear. You can leverage the ADX | DMI Trend Strategy to include the filters for buying/shorting.
So now this just looks for a rising ADX above a certain level and the D+ and D- lines to indicate bull/bear. You can leverage the ADX | DMI Trend Strategy to include the filters for buying/shorting.
Release Notes:
Re-enabled the volume and moving average filters because I figured out a way that the study knows if you are in a position or not. So it will keep the shading active even if volume dries up and you're in a position and only stop the shading (i.e. exit the position) when the ADX starts sloping downwards. This should match up to the ADX | DMI Strategy very well. The only difference is the optional ATR trailing stop that exists in the strategy.
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Reconfigured the alerts based on the new "in a position" logic. These should now fire off according with the plan.
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Added the ATR-based stops that are in the Strategy to this study. Now the strategy and study should be essentially mirror images of each other. One used for backtesting, and one used for trading/alerts and visualization.
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Republishing without the ADX Strategy on the chart per request from TradingView.
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Added separate ADX lookback periods for entry and exit for more fine tuning.