Johnny's Moving Average Ribbon

Props to Madrid for creating the original script: Madrid Moving Average Ribbon.
All I did was upgrade it to pinescript v5 and added a few changes to the script.


Features and Functionality

Moving Average Types: The indicator offers a choice between exponential moving averages (EMAs) and simple moving averages (SMAs), allowing users to select the type that best fits their trading strategy.

Dynamic Color Coding: Each moving average line within the ribbon changes color based on its direction and position relative to a reference moving average, providing visual cues for market sentiment and trend strength.

• Lime Green: Indicates an uptrend and potential long positions, shown when a moving average is rising and above the longer-term reference MA.
  
• Maroon: Suggests caution for long positions or potential short reentry points, displayed when a moving average is rising but below the reference MA.
  
• Ruby Red: Represents a downtrend, suitable for short positions, shown when a moving average is falling and below the reference MA.
  
• Green: Signals potential reentry points for downtrends or warnings for uptrend reversals, displayed when a moving average is falling but above the reference MA.
  

Usage and Application

Trend Identification: Traders can quickly ascertain the market's direction at a glance by observing the predominant color of the ribbon and its orientation.

Trade Entry and Exit Points: The color transitions within the ribbon can signal potential entry or exit points, with changes from green to lime or red to maroon indicating shifts in market momentum.

Customization: Users have the flexibility to toggle between exponential and simple moving averages, allowing for a tailored analytical approach that aligns with their individual trading preferences.

Technical Specifications

The ribbon consists of multiple moving averages calculated over different periods, typically ranging from shorter to longer-term intervals to capture various aspects of market behavior.

The color dynamics are determined by comparing each moving average to a reference point, often a longer-term moving average within the ribbon, to assess the relative trend strength and direction.