Alpine Predictive Bands - ADX & Trend Projection is an advanced indicator crafted to estimate potential price zones and trend strength by integrating dynamic support/resistance bands, ADX-based confidence scoring, and linear regression-based price projections. Designed for adaptive trend analysis, this tool combines multi-timeframe ADX insights, volume metrics, and trend alignment for improved confidence in trend direction and reliability.
Key Calculations and Components: Linear Regression for Price Projection:
Purpose: Provides a trend-based projection line to illustrate potential price direction. Calculation: The Linear Regression Centerline (LRC) is calculated over a user-defined lookbackPeriod. The slope, representing the rate of price movement, is extended forward using predictionLength. This projected path only appears when the confidence score is 70% or higher, revealing a white dotted line to highlight high-confidence trends. Adaptive Prediction Bands:
Purpose: ATR-based bands offer dynamic support/resistance zones by adjusting to volatility. Calculation: Bands are calculated using the Average True Range (ATR) over the lookbackPeriod, multiplied by a volatilityMultiplier to adjust the width. These shaded bands expand during higher volatility, guiding traders in identifying flexible support/resistance zones. Confidence Score (ADX, Volume, and Trend Alignment):
Purpose: Reflects the reliability of trend projections by combining ADX, volume status, and EMA alignment across multiple timeframes. ADX Component: ADX values from the current timeframe and two higher timeframes assess trend strength on a broader scale. Strong ADX readings across timeframes boost the confidence score. Volume Component: Volume strength is marked as “High” or “Low” based on a moving average, signaling trend participation. Trend Alignment: EMA alignment across timeframes indicates “Bullish” or “Bearish” trends, confirming overall trend direction. Calculation: ADX, volume, and trend alignment integrate to produce a confidence score from 0% to 100%. When the score exceeds 70%, the white projection line is activated, underscoring high-confidence trend continuations. User Guide Projection Line: The white dotted line, which appears only when the confidence score is 70% or higher, highlights a high-confidence trend. Prediction Bands: Adaptive bands provide potential support/resistance zones, expanding with market volatility to help traders visualize price ranges. Confidence Score: A high score indicates a stronger, more reliable trend and can support trend-following strategies. Settings Prediction Length: Determines the forward length of the projection. Lookback Period: Sets the data range for calculating regression and ATR. Volatility Multiplier: Adjusts the width of bands to match volatility levels. Disclaimer: This indicator is for educational purposes and does not guarantee future price outcomes. Additional analysis is recommended, as trading carries inherent risks.
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