[blackcat] L1 Buff Average

17 أغسطس 2021

Level: 1

Background

This indicator buffs up your moving averages using the volume-weighting method presented in Buff Dormeier's article in 2001, "Buff Up Your Moving Averages." The weighting formula has been created as a function in pine script so that it can be referenced from any analysis technique or strategy. In addition, a simple two-line volume-weighted average indicator that references the function has also been included.


Function

The name of the volume-weighted average function is "BuffAverage()." The function has two inputs, price and length. The price input represents the price value upon which the average calculation is based. The length input represents the number of bars that are used in the calculation of the average. The two-line volume-weighted average indicator is presented. This indicator has three inputs. The price input represents the price value upon which the average calculation is based. The FastAvg input represents the number of bars to use in the fast volume-weighted average calculation. The SlowAvg input represents the number of bars to use in the slow volume-weighted average calculation. A simple alert criteria has also been included to provide an alert when the two lines cross.


Key Signal

FastBuff Line --> fast line in yellow;
SlowBuff Line --> slow line in fuchsia.


Remarks

This is a Level 1 free and open source indicator.

Feedbacks are appreciated.

ملاحظات الأخبار

OVERVIEW

**L1 Buff Average** 📈💹 is a custom TradingView indicator designed to help traders identify potential buying and selling opportunities using buffered moving averages. The script calculates two buffered averages—one fast and one slow—to detect crossover points that indicate market trends.

It plots these averages on the chart with clear visual distinctions and provides buy/sell signals via labels and alerts. This tool aids in making informed trading decisions based on trend analysis.

FEATURES


- **Buffered Moving Averages**: Calculates both fast and slow buffered averages considering volume data.
- **Customizable Settings**:
+ Adjustable price source (e.g., HL2, Close).
+ Custom lengths for fast and slow averages.
- **Visual Indicators**:
+ Plots fast and slow buffered averages with distinct colors.
+ Fills the area between the two averages for better visualization.
- **Trading Signals**:
+ Displays "BUY" and "SELL" labels on the chart when crossover conditions are met.
+ Provides alert notifications for buy and sell signals.

HOW TO USE

To effectively use this indicator follow these steps:

1. **Add the Indicator**:
+ Open your TradingView chart.
+ Click on "Add Indicator."
+ Search for *[blackcat] L1 Buff Average* and add it to your chart.

2. **Adjust Settings**:
+ Modify the *Price Source*, *Fast Average Length*, and *Slow Average Length* inputs as per your strategy.
+ Choose appropriate values for faster or slower responding indicators depending on market volatility and your trading preferences.

3. **Interpret Buy/Sell Signals**:

**Buy Signal**:
+ When the fast buffered average crosses above the slow buffered average, a "BUY" 📈✅ label appears.
+ Set up an alert condition to receive notifications for buy signals.

**Sell Signal**:
+ When the fast buffered average crosses below the slow buffered average, a "SELL" 📉❌ label appears.
+ Set up an alert condition to receive notifications for sell signals.

LIMITATIONS
Please be aware of following limitations:
- The effectiveness of **_calculate\_buffered\_average_** function relies heavily on accurate volume data; gaps or missing volumes may affect its performance.
- It is essential to combine this indicator with other forms of technical and fundamental analysis for more reliable trading decisions.
- Optimize input parameters regularly to align with changing market conditions.

NOTES

**Volume Consideration:**
The calculation of buffered averages takes into account the volume traded during each period, providing a more nuanced view of price movements compared to standard moving averages.