The Ensemble Technical Indicator (ETI)

The Ensemble Technical Indicator (ETI) is a script that combines multiple established indicators into one single powerful indicator. Specifically, it takes a number of technical indicators and then converts them into +1 to represent a bullish trend, or a -1 to represent a bearish trend. It then adds these values together and takes the running sum over the past 20 days.

The ETI is composed of the following indicators and converted to +1 or -1 using the following criteria:

Simple Moving Average (10 days: When the price is above the 10-day simple moving averaging, +1, when below -1

Weighted Moving Average (10 days): Similar to the SMA 10, when the the price is above the 10-day weighted moving average, +1, when below -1

Stochastic K%: If the current Stochastic K% is greater than the previous value, then +1, else -1.

Stochastic D%: Similar to the Stochastic K%, when the current Stochastic D% is greater than the previous value, +1, else -1.

MACD Difference: First subtract the MACD signal (i.e. the moving average) from the MACD value and if the current value is higher than the previous value, then +1, else -1.

William's R%: If the current William's R% is greater than the previous one, then +1, else -1.

William's Accumulation/Distribution: If the current William's AD value is greater than the previous value, then +1, else -1.

Commodity Channel Index: If the Commodity Channel Index is greater than 200 (overbought), then -1, if it is less than -200 (oversold) then +1. When it is between those values, if the current value is greater than the previous value then +1, else -1.

Relative Strength Index: If the Relative Strength Index is over 70 (overbought) then -1 and if under 30 (oversold) then +1. If the Relative Strength Indicator is between those values then if the current value is higher than the previous value +1, else -1.

Momentum (9 days): If the momentum value is greater than 0, then +1, else -1.

Again, once these values have been calculated and converted, they are added up to produce a single value. This single value is then summed across the previous 20 candles to produce a running sum.

By coalescing multiple technical indicators into a single value across time, traders are able to better understand whether a stock is currently bullish or bearish without relying on too many different indicators, which may seem to contradict each other at times.

Suggested Use: Currently it is suggested that value below -40 reflect oversold conditions, while those above +50 reflect overbought conditions. -80 reflects extremely oversold conditions and may represent a good buying point.

It is also suggested that ETI be used in conjunction with the Stochastic RSI (built in indicator in TradingView). Specifically, when the K% of the Stochastic RSI is below 5 and the ETI is below -40, this is a particularly powerful buy signal that potentially represents a trend reversal into growth.