Stochastic Momemtum Index - a true strength indix tsi with a moving average signal. This uses the built in with modifications per Anne-Marie Baiynds recommendations - she uses a SIMPLE MOVING AVERAGE for the signal (signal length at 4x the short length seems to work best to reflect actual price action support or resistance) Note: Default settings in this code have been updated to her most recent recommendations that I have seen. video is entitled "The Most Reliable Technical Indicator I Have Ever Used"
Note: I have not discussed this with Ms . Baiynd this is my interpretation of the vids I have seen.
Anne-Marie Baiynd also in talks / videos refers to the use of short / long of 4/20 and 6/40 and have combined both of them here This overlays both of them with their respective SMAs- a 4/20 lengths and a 6/40 lengths in darker colors and smallest linewidth. this gives a perspective on slightly higher time frame action.
USAGE: Generally above and below the black dashed zero line is long or short KEYS: -Plot position relative to zero black, red overbought, green oversold and the gray lines at .25 -.25 Indicator action often more significant out side of the more "neutral" +.25/-.25 area and near or above/below the red/green dashed lines. -Steepness of slopes Slopes of smi plots relate directly to price action where steeper is more momentum. - -SMI blue relation to its simple moving average orange and the SMI longer dark blue with moving average purple. MAJOR FEATURE - The average acts as support or resistance to the SMI and the price unless breaking out. Price is often pausing or reversing iin finding primary/secondary support or resistance as well at those times. You Can See and anticipate Where Support or Resistance may be Encountered. (much unlike most indicators)
My standard caveat -use at your own risk. Like anyone else I do not know what the next bar/candle is going to do and I place all of my trades with a management plan in place for the worst case scenario. That said enjoy your charting and trading. This was coded starting with the built-in indicator "SMI Ergontic Oscilator / Indicator". You do this by within the Pine Editor select "New" tab and choose the indicator that you want the code for. This populates the editor with the code for the built in indicator and you can modify it to suit your purposes and save it / publish it and etc. Thanks for following this and Keep Smiling!
How is this a Stochastic Momentum Index - SMI? Both in line 33 and 36, then this indicator is computed - the built in TSI function is being called by the code?
Tom1trader
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@bandy99, Good question. I did not highlight it very well in the commentary or, I see in the listing title. It is identified correctly in the study title on line 24. This is an SMI Ergotic indicator which is as stated a TSI with a signal line. Life is too short to re-invent the wheel so of course I employ built-in functions.
ax1206
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4x is the best ,so why not 16 &24？
Tom1trader
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@ax1206, Hi and thanks for the question. We all trade a little differently. That is why the lengths are all as inputs so that you can change them to see how the different settings work best for you.
ax1206
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if the best set is signal line 4x short line,but why u use 3x? thx!
Tom1trader
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@ax1206, See above, thanks for the questions! Sorry late reply, in my options trading many trades are done without any charting so I miss comments/questions. Happy trading and keep smiling!