Gamma Conviction Oscillator

Gamma Conviction Oscillator

OVERVIEW
The Gamma Conviction Oscillator is a specialized momentum study that integrates volume-weighted price change with a dynamic volatility-adjustment engine. Unlike traditional oscillators, it scales its sensitivity based on current market ATR, allowing the tool to stay responsive during low-volatility drifts and stabilize during high-volatility expansions.

THE MATH BEHIND THE "CONVICTION"

Volatility-Adjusted Sensitivity: The script utilizes a normalized ATR ratio to calculate a 'Dynamic Adjustment Factor.' This ensures that overbought/oversold thresholds are not static but react to the current market regime.

Volume-Weighted Basis: Momentum is calculated using the product of price-change and volume, ensuring that "Conviction" is only displayed when there is actual participation behind the move.

Trend-Alignment Filter: The coloring engine uses a long-term moving average anchor to determine the 'Context.' Conviction is categorized as 'Trend-Aligned' or 'Counter-Trend' based on the price relation to this long-term anchor.

HOW TO USE

Observe the Oscillator Color:

Bright Lime / Bright Red: High-momentum extremes aligned with the long-term trend. Indicates areas where price movement has strong participation and trend confirmation.

Teal / Maroon: Counter-trend momentum extremes, highlighting potential areas for trend testing or mean-reversion.

Assess Overbought and Oversold Zones:

The dynamic overbought (OB) and oversold (OS) levels adjust based on current market volatility. Readings outside these zones indicate stronger-than-normal conviction.

Consider Trend Context:

Compare the oscillator reading to the long-term trend (based on the selected moving average). Alignment with the trend reinforces trend strength; divergence may indicate temporary pullbacks or consolidation.

Adjust Inputs for Your Trading Timeframe:

Base Oscillator Length: Shorter values make the oscillator more responsive to intraday momentum; longer values smooth for swing analysis.

Volatility Smoothing Length: Controls sensitivity to ATR fluctuations; higher values reduce noise in volatile markets.

Dynamic Sensitivity Factor: Fine-tunes how strongly volatility influences the oscillator scale.

Use as an Educational Guide:

This tool is a visualization of historical and current momentum. Use it to study how momentum builds, fades, or reverses. It does not generate trade signals and is for educational and informational purposes only.

NOTES
All calculations are proprietary and protected to preserve the underlying logic. This script is intended purely as an educational visualization tool.