Patreon Bull Bear Oscillator

2020년 9월 7일

The Patreon bull-bear oscillator (PBBO) was carefully designed to give as much information as possible to the user without sacrificing readability. With it, you can detect the direction of trends, detect whether the market is ranging or trending, tell if a given signal is false, and easily spot divergences, in fact, the PBBO is the only indicator of the trend trading tier that was designed to spot potential reversals.

The indicator comes with alerts.

Settings

• Length: Control the sensitivity to price variations, with a higher value aiming to detect longer-term trends.
  
• Control Line Divisor: Divisor of the control line
  
• Src: Source input of the indicator
  
• Pre-Smoothing: If true, smooth "Src" before calculating the PBBO
  
• Smooth: Period of the moving average used for pre-smoothing
  
• Pre-Smoothing Method: Determine the type of moving average to be used during the pre-smoothing step. Available options are: EMA, TMA (triangular moving average), HULL, LSMA (least squares moving average)
  
• Filter Alerts Based On The Control Line: Add an additional condition for the alerts.
  

Detecting The Direction Of A Trend

The indicator display three lines, one bull line (in blue), one bear line (in red), and a control line (in green). A bullish market is detected when the bull line is over the bear line, while a bearish market is detected when the bear line is over the bull line.



When one of the lines is declining, it means that the current trend is weakening, showing the potential for a retracement or reversal.

Filter Out False Signals With The Control Line

The PBBO is still subject to all the price variations you will see on your chart, and as such can return false signals, it is important to tell if a bullish/bearish market is significant before making a move, and this is what the control line aims to do.



The control line divisor can provide a way to control the position of the control line, with lower values of the divisor requiring even more significant moves in order to trigger a signal. A value of 2 for the control line divisor is recommended in order to filter out false signals.

Detecting Whether Market Is Trending Or Ranging

Telling when the market is trending is primordial in trend trading, and many indicators that aim to return this information have been proposed. The PBBO is also able to give such information. First, you can look at the bull and bear lines, if both are equal to 0, it means the market is ranging.



You can also use the control line to tell whether the market is trending or not, with a bull/bear line above the control line telling the market is trending.

Spotting Divergences With The PBBO

Spotting divergences is a simple way to detect potential reversals, and it was important for me to start working on an indicator able to detect them while trying to make everything super simple for the user.

With the PBBO you don't need to look at both the price and oscillator lines in order to detect divergences, you can simply look at the peaks made by the bull or bear line, if a peak is lower than a previous one, then a reversal might occur.



Above, we can see that the bull line made several peaks during the up-trend, with the last peak being lower than the previous one, we thus detect a bearish divergence and could expect a reversal. If the same case scenario occur but with peaks made by the bearish line then we detected a bullish divergence.



It can be difficult to tell whether a divergence is significant or not, it can also be hard for beginners to tell which peaks they must look at. A good rule of thumb would be to check if both peaks are coming from two different movements, this is done by seeing if the first peak has reached 0 before the second one occurred.



The control line is also useful to tell when peaks are significant or not, with peaks that are higher than the control line being more significant.

Alerts

By default, a buy alert is given once the bull line is greater than the bear line, and vice versa for a sell alert, the setting "Filter Alerts Based On The Control Line" allows you to only have an alert when the bull/bear line is greater than the control line.

Gaining Access To The Indicator

Only my Patrons can get access to this indicator, you can go to my Patreon page by clicking on the link in my signature. Note that you will also have access to the Patreon trailing stop and Patreon moving average.

2020년 9월 10일

릴리즈 노트

Fixed some alerts issues

2020년 10월 17일

릴리즈 노트

- Added all in one alerts for buy/sell signals
- Added upper control line for tops/bottoms
- Added binary series
- Corrected alerts related bugs

2020년 10월 25일

릴리즈 노트

Added automatic divergence detection

2020년 12월 12일

릴리즈 노트

Fixed display problems.