UVR Crypto Trend

2024년 12월 3일

INDICATOR OVERVIEW: UVR CRYPTO TREND
The UVR Crypto Trend indicator is a custom-built tool designed specifically for cryptocurrency markets, utilizing advanced volatility, momentum, and trend-following techniques. It aims to identify trend reversals and provide buy and sell signals by analyzing multiple factors, such as price volatility(UVR), RSI (Relative Strength Index), CMF (Chaikin Money Flow), and EMA (Exponential Moving Average). The indicator is optimized for CRYPTO MARKETS only.

KEY FEATURES AND HOW IT WORKS

Volatility Analysis with UVR
The UVR (Ultimate Volatility Rate) is a proprietary calculation that measures market volatility by comparing significant price extremes and smoothing the data over time.

Purpose: UVR aims to reduce noise in low-volatility environments and highlight significant movements during higher-volatility periods. While it strives to improve filtering in low-volatility conditions, it does not guarantee perfect performance, making it a balanced and adaptable tool for dynamic markets like cryptocurrency.

HOW UVR (ULTIMATE VOLATILITY RATE) IS CALCULATED
UVR is calculated using a method that ensures precise measurement of market volatility by comparing price extremes across consecutive candles:

Volatility Components:
Two values are calculated to represent potential price fluctuations:

The absolute difference between the current candle's high and the previous candle's low:

Volatility Component 1=∣High−Low[1]∣

The absolute difference between the previous candle's high and the current candle's low:

Volatility Component 2=∣High[1]−Low∣

Volatility Ratio:
The larger of the two components is selected as the Volatility Ratio, ensuring UVR captures the most significant movement:

Volatility Ratio=max(Volatility Component 1,Volatility Component 2)

Smoothing with SMMA:
To stabilize the volatility calculation, the Volatility Ratio is smoothed using a Smoothed Moving Average (SMMA) over a user-defined period (e.g., 14 candles):

UVR=(UVR(Previous)×(Period−1)+Volatility Ratio)/Period
​
This calculation ensures UVR adapts dynamically to market conditions, focusing on significant price movements while filtering out noise.

RSI FOR MOMENTUM DETECTION
RSI (Relative Strength Index) identifies overbought and oversold conditions.

Trend Confirmation at the 50 Level
RSI values crossing above 50 signal the potential start of an upward trend.
RSI values crossing below 50 indicate the potential start of a downward trend.

Key Reversals at Extreme Levels
RSI detects trend reversals at overbought (>70) and oversold (<30) levels.
For example:
Overbought Trend Reversal: RSI >70 followed by bearish price action signals a potential downtrend.
Oversold Trend Reversal: RSI <30 with bullish confirmation signals a potential uptrend.

Rare Extreme RSI Readings
Extreme levels, such as RSI <12 (oversold) or RSI >88 (overbought), are used to identify rare yet powerful reversals.

---HOW IT DIFFERS FROM OTHER INDICATORS---

Using UVR High and Low Values
The Ultimate Volatility Rate (UVR) focuses on analyzing the high and low price ranges of the market to measure volatility.

Unlike traditional trend indicators that rely primarily on momentum or moving average crossovers, UVR leverages price extremes to better identify trend reversals.
This approach ensures fewer false signals during low-volatility phases and more accurate trend detection during high-volatility conditions.

UVR as the Core Component
The indicator is fundamentally built around UVR as the primary filter, while supporting tools like RSI (momentum detection), CMF (volume confirmation), and EMA (trend validation) complement its functionality.

By integrating these additional components, the indicator provides a multidimensional analysis rather than relying solely on a single approach.

Dynamic Adaptation to Volatility
UVR dynamically adjusts to market conditions, striving to improve filtering in low-volatility phases. While not flawless, this approach minimizes false signals and adapts more effectively to varying levels of market activity.

Trend Clouds for Visual Guidance
UVR-based dynamic clouds visually mark high and low price areas, highlighting potential consolidation or retracement zones.

These clouds serve as guides for setting stop-loss or take-profit levels, offering clear risk management strategies.

BUY AND SELL SIGNAL LOGIC

BUY CONDITIONS

Momentum-Based Buy-Entry

RSI >50, CMF >0, and the close price is above EMA50.
The price difference between open and close exceeds a threshold based on UVR.
Oversold Reversal

RSI <30 and CMF >0 with a strong bullish candle (close > open and UVR-based sensitivity filter).

Breakout Confirmation

The price breaks above a previously identified resistance, with conditions for RSI and CMF supporting the breakout.

Reversal from Oversold RSI Extreme

RSI <12 on the previous candle with a strong rebound on the current candle with UVR confirmation filter.

SELL CONDITIONS

Momentum-Based Sell-Entry

RSI <50, CMF <0, and the close price is below EMA50.
The price difference between open and close exceeds the UVR threshold.

Overbought Reversal

RSI >70 with bearish price action (open > close and UVR-based sensitivity filter).

Breakdown Confirmation

The price breaks below a previously identified support, with RSI and CMF supporting the breakdown.

Reversal from Overbought RSI Extreme

RSI >88 on the previous candle with a bearish confirmation on the current candle with UVR confirmation filter.

BUY AND SELL SIGNALS VISUALIZATION

The UVR Crypto Trend Indicator visually represents buy and sell conditions using dynamic plots, making it easier for traders to interpret and act on the signals. Below is an explanation of the visual representation:

Buy Signals and Visualization

Signal Trigger:
A buy signal is generated when one of the defined Buy Conditions is met (e.g., RSI >50, CMF >0, price above EMA50).

Visual Representation:
A blue upward arrow appears at the candle where the buy condition is triggered.
A blue cloud forms above the price candles, representing the strength of the bullish trend. The cloud dynamically adapts to market volatility, using the UVR calculation to mark support zones or consolidation levels.

Purpose of the Blue Cloud:
It acts as a visual guide for price movements and stay horizontal when the trend is not moving up

Sell Signals and Visualization

Signal Trigger:
A sell signal is generated when one of the defined Sell Conditions is met (e.g., RSI <50, CMF <0, price below EMA50).

Visual Representation:
A red downward arrow appears at the candle where the sell condition is triggered.
A red cloud forms below the price candles, representing the strength of the bearish trend. Like the blue cloud, it uses the UVR calculation to dynamically mark resistance zones or potential retracement levels.

Purpose of the Red Cloud:
It acts as a visual guide for price movements and stay horizontal when the trend is not moving down.

CONCLUSION
The UVR Crypto Trend indicator provides a powerful tool for trend reversal detection by combining volatility analysis, momentum confirmation, and trend-following techniques. Its unique use of the Ultimate Volatility Rate (UVR) as a core element, supported by proven indicators like RSI, CMF, and EMA, ensures reliable and actionable signals tailored for the crypto market's dynamic nature. By leveraging UVR’s high and low price range analysis, it achieves a level of precision that traditional indicators lack, making it a high-performing system for cryptocurrency traders.

4월 14일

릴리즈 노트

Added some extra ticker ID information to cover more crypto currencies

4월 14일

릴리즈 노트

Added some extra ticker ID to cover more cryptocurrencies