On Chart Anticipated Moving Average Crossover Indicator

2020년 12월 22일

Introducing the on chart moving average crossover indicator.



This is my On Chart Pinescript implementation of the Anticipated Simple Moving Average Crossover idea.

This indicator plots 6 user defined moving averages.

It also plots the 5 price levels required on the next close to cross a user selected moving average with the 5 other user defined moving averages

It also gives signals of anticipated moving average crosses as arrows on chart and also as tradingview alerts with a very high degree of accuracy

Much respect to the creator of the original idea Mr. Dimitris Tsokakis


Moving Averages

A moving average simplifies price data by smoothing it out by averaging closing prices and creating one flowing line which makes seeing the trend easier.

Moving averages can work well in strong trending conditions, but poorly in choppy or ranging conditions.
Adjusting the time frame can remedy this problem temporarily, although at some point, these issues are likely to occur regardless of the time frame chosen for the moving average(s).

While Exponential moving averages react quicker to price changes than simple moving averages. In some cases, this may be good, and in others, it may cause false signals.

Moving averages with a shorter look back period (20 days, for example) will also respond quicker to price changes than an average with a longer look back period (200 days).


Trading Strategies — Moving Average Crossovers

Moving average crossovers are a popular strategy for both entries and exits. MAs can also highlight areas of potential support or resistance.

The first type is a price crossover, which is when the price crosses above or below a moving average to signal a potential change in trend.
Another strategy is to apply two moving averages to a chart: one longer and one shorter.

When the shorter-term MA crosses above the longer-term MA, it's a buy signal, as it indicates that the trend is shifting up. This is known as a "golden cross."
Meanwhile, when the shorter-term MA crosses below the longer-term MA, it's a sell signal, as it indicates that the trend is shifting down. This is known as a "dead/death cross."

MA and MA Cross Strategy Disadvantages

Moving averages are calculated based on historical data, and while this may appear predictive nothing about the calculation is predictive in nature.
Moving averages are always based on historical data and simply show the average price over a certain time period.

Therefore, results using moving averages can be quite random.
At times, the market seems to respect MA support/resistance and trade signals, and at other times, it shows these indicators no respect.

One major problem is that, if the price action becomes choppy, the price may swing back and forth, generating multiple trend reversal or trade signals.
When this occurs, it's best to step aside or utilize another indicator to help clarify the trend.

The same thing can occur with MA crossovers when the MAs get "tangled up" for a period of time during periods of consolidation, triggering multiple losing trades.
Ensure you use a robust risk management system to avoid getting "Chopped Up" or "Whip Sawed" during these periods.

2020년 12월 23일

릴리즈 노트

Added user defined lower crossover level cutoff factor to correct auto chart focus issues

2021년 6월 15일

릴리즈 노트

Removed transp from plot functions.