OPEN-SOURCE SCRIPT

Gradient Trend Filter [ChartPrime]

The Gradient Trend Filter is a dynamic trend analysis tool that combines a noise-filtered trend detection system with a color-gradient cloud. It provides traders with a visual representation of trend strength, momentum shifts, and potential reversals.

⯁ KEY FEATURES

Trend Noise Filtering
Uses an advanced smoothing function to filter market noise and produce a more reliable trend representation.
Pine Script®
// Noise filter function
noise_filter(src, length) =>
    alpha = 2 / (length + 1)
    nf_1 = 0.0
    nf_2 = 0.0
    nf_3 = 0.0

    nf_1 := (alpha * src) + ((1 - alpha) * nz(nf_1[1]))
    nf_2 := (alpha * nf_1) + ((1 - alpha) * nz(nf_2[1]))
    nf_3 := (alpha * nf_2) + ((1 - alpha) * nz(nf_3[1]))

    nf_3 // Final output with three-stage smoothing
Color-Based Trend Visualization
The mid-line changes color based on trend direction—green for uptrends and red for downtrends—making it easy to identify trends at a glance.
Orange diamond markers appear when a trend shift is confirmed, providing actionable signals for traders.
Gradient Color Trend Cloud
A cloud around the base trend line that dynamically changes color, often signaling trend shifts ahead of the main trend line.
When in a downtrend, if the cloud starts turning green, it suggests weakening bearish momentum or an upcoming bullish reversal. Conversely, when in an uptrend, a red cloud indicates potential trend weakening or a bearish reversal.
Multi-Layered Trend Bands
The cloud consists of multiple bands, offering a range of support and resistance zones that traders can use for confluence in decision-making.

⯁ HOW TO USE

Identify Trend Strength & Reversals
Use the mid-line and cloud color changes to assess the strength of a trend and spot early signs of reversals.
Monitor Momentum Shifts
Watch for gradient cloud color shifts before the trend line changes color, as this can indicate early weakening or strengthening of momentum.
Act on Trend Shift Markers
Use the orange diamonds as confirmation of trend shifts and potential trade entry or exit points.
Utilize Cloud Bands as Support/Resistance
The outer bands of the cloud act as dynamic support and resistance, helping traders refine their stop-loss and take-profit placements.

⯁ CONCLUSION
The Gradient Trend Filter is an advanced trend detection tool designed for traders looking to anticipate trend shifts with greater precision. By integrating a noise-filtered trend line with a gradient-based trend cloud, this indicator enhances traders' ability to navigate market trends effectively.