AbsoluteStrength_v1DH_002
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This tool is designed to measure and visualize the "strength" of market momentum by separating buying pressure from selling pressure. It provides traders with a clear look at which side of the market—the bulls (buyers) or the bears (sellers)—currently holds the upper hand.
Core Logic Overview
The script operates by calculating the intensity of price movement and then refining that data through multiple layers of mathematical smoothing. Instead of just showing you where the price is, it attempts to show you how much "force" is behind the current trend.
How It Works
The logic follows a multi-step process to ensure the resulting data is clean and easy to read:
1. Identifying Raw Momentum Depending on the settings chosen, the tool uses one of two primary methods to detect market pressure:
- RSI Method: It looks at the immediate change in price between two consecutive points to determine the direction of the move.
- Stochastic Method: It compares the current price against the highest highs and lowest lows over a specific period. This helps identify how far the price has stretched relative to its recent range.
2. Separating Bulls vs. Bears The script takes the raw momentum identified above and splits it into two distinct values:
- Bulls: Represents the upward pressure or "strength" of the buyers.
- Bears: Represents the downward pressure or "strength" of the sellers.
3. Multi-Stage Smoothing (The "Refining" Process) To prevent the data from being too "jumpy" or noisy (which can lead to false signals), the script passes the Bull and Bear values through three successive layers of moving averages:
- First Average: Stabilizes the initial momentum readings.
- Second Smoothing: Further polishes the data to highlight broader trends.
- Signal Line: Creates a final smoothed line that helps traders identify shifts in momentum or potential turning points.
Visual Representation
The results are displayed in a dedicated window on your chart:
- Histograms: These provide a visual representation of the raw strength for both Bulls and Bears, allowing you to see the immediate power of each side.
- Signal Lines: These lines represent the final, highly smoothed trend of that momentum, making it easier to spot where the "power" is shifting from one side to the other over time.
Indicators Used
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AbsoluteStrength_v1DH_002
//+------------------------------------------------------------------+
//| AbsoluteStrength_v1DH AbsoluteStrength_v1.mq4 |
//| Copyright © 2006, TrendLaboratory Ltd. |
//| http://finance.groups.yahoo.com/group/TrendLaboratory |
//| E-mail: igorad2004@list.ru |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2006, TrendLaboratory Ltd."
#property link "http://finance.groups.yahoo.com/group/TrendLaboratory"
#property indicator_separate_window
#property indicator_buffers 4
#property indicator_color1 LightBlue
#property indicator_width1 2
#property indicator_color2 Tomato
#property indicator_width2 1
#property indicator_color3 Aqua
#property indicator_width3 1
#property indicator_style3 3
#property indicator_color4 Orange
#property indicator_width4 1
#property indicator_style4 3
//---- input parameters
extern int Mode = 0; // 0-RSI method; 1-Stoch method
extern int Length = 10; // Period
extern int Smooth = 5; // Period of smoothing
extern int Signal = 5; // Period of Signal Line
extern int Price = 0; // Price mode : 0-Close,1-Open,2-High,3-Low,4-Median,5-Typical,6-Weighted
extern int ModeMA = 3; // Mode of Moving Average
//---- buffers
double Bulls[];
double Bears[];
double AvgBulls[];
double AvgBears[];
double SmthBulls[];
double SmthBears[];
double SigBulls[];
double SigBears[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
IndicatorBuffers(8);
SetIndexStyle(0,DRAW_HISTOGRAM);
SetIndexBuffer(0,SmthBulls);
SetIndexStyle(1,0);
SetIndexBuffer(1,SmthBears);
SetIndexStyle(2,DRAW_LINE);
SetIndexBuffer(2,SigBulls);
SetIndexStyle(3,DRAW_LINE);
SetIndexBuffer(3,SigBears);
SetIndexBuffer(4,Bulls);
SetIndexBuffer(5,Bears);
SetIndexBuffer(6,AvgBulls);
SetIndexBuffer(7,AvgBears);
//---- name for DataWindow and indicator subwindow label
string short_name="AbsoluteStrength("+Mode+","+Length+","+Smooth+","+Signal+",,"+ModeMA+")";
IndicatorShortName(short_name);
SetIndexLabel(0,"Bulls");
SetIndexLabel(1,"Bears");
SetIndexLabel(2,"SignalBulls");
SetIndexLabel(3,"SignalBears");
//----
SetIndexDrawBegin(0,Length+Smooth+Signal);
SetIndexDrawBegin(1,Length+Smooth+Signal);
SetIndexDrawBegin(2,Length+Smooth+Signal);
SetIndexDrawBegin(3,Length+Smooth+Signal);
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int shift, limit, counted_bars=IndicatorCounted();
double Price1, Price2, smax, smin;
//----
if ( counted_bars < 0 ) return(-1);
if ( counted_bars ==0 ) limit=Bars-Length+Smooth+Signal-1;
if ( counted_bars < 1 )
for(int i=1;i<Length+Smooth+Signal;i++)
{
Bulls[Bars-i]=0;
Bears[Bars-i]=0;
AvgBulls[Bars-i]=0;
AvgBears[Bars-i]=0;
SmthBulls[Bars-i]=0;
SmthBears[Bars-i]=0;
SigBulls[Bars-i]=0;
SigBears[Bars-i]=0;
}
if(counted_bars>0) limit=Bars-counted_bars;
limit--;
for( shift=limit; shift>=0; shift--)
{
Price1 = iMA(NULL,0,1,0,0,Price,shift);
Price2 = iMA(NULL,0,1,0,0,Price,shift+1);
if (Mode==0)
{
Bulls[shift] = (0.5*(MathAbs(Price1-Price2)+(Price1-Price2)))-0.5*(MathAbs(Price1-Price2)-(Price1-Price2));
Bears[shift] = -0.5*(MathAbs(Price1-Price2)-(Price1-Price2))+0.5*(MathAbs(Price1-Price2)-(Price1-Price2));
}
if (Mode==1)
{
smax=High[Highest(NULL,0,MODE_HIGH,Length,shift)];
smin=Low[Lowest(NULL,0,MODE_LOW,Length,shift)];
Bulls[shift] = Price1 - smin;
Bears[shift] = -(smax - Price1)+(smax-Price1);
}
}
for( shift=limit; shift>=0; shift--)
{
AvgBulls[shift]=iMAOnArray(Bulls,0,Length,0,ModeMA,shift);
AvgBears[shift]=iMAOnArray(Bears,0,Length,0,ModeMA,shift);
}
for( shift=limit; shift>=0; shift--)
{
SmthBulls[shift]=iMAOnArray(AvgBulls,0,Smooth,0,ModeMA,shift);
SmthBears[shift]=iMAOnArray(AvgBears,0,Smooth,0,ModeMA,shift);
}
for( shift=limit; shift>=0; shift--)
{
SigBulls[shift]=iMAOnArray(SmthBulls,0,Signal,0,ModeMA,shift);
SigBears[shift]=iMAOnArray(SmthBears,0,Signal,0,ModeMA,shift);
}
//----
return(0);
}
//+------------------------------------------------------------------+
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