forecast osc
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This tool is designed as a visual aid for traders to help identify potential price momentum and trend shifts by analyzing historical data. It transforms raw price movements into two distinct indicators that work together to provide a clearer picture of market direction.
How the Logic Works
The script operates through three primary stages of calculation:
1. Weighted Average Calculation Instead of simply looking at the most recent price, the tool looks back over a set period (defined by the "regress" parameter). It assigns different levels of importance to prices within that window, creating a "Weighted Trend." This helps smooth out minor market noise and focuses on the underlying strength of the movement.
2. The Forecast Oscillator The tool then compares the current market price against this weighted trend. By calculating the percentage difference between the two, it generates a "Forecast Oscillator."
- This tells you how far the price has moved away from its established average.
- It helps identify whether the market is currently overextended or following the general flow.
3. The Smoothing and Signal Layer Because raw oscillators can sometimes jump around rapidly, the script applies a sophisticated smoothing process (similar to a Triple Exponential Moving Average). This creates a second, much smoother line on your chart.
- This smooth line represents the "long-term intent" of the oscillator.
- The tool compares the immediate forecast against this smooth long-term trend to spot specific turning points.
Visual Signals
To make the data actionable for the user, the script automatically places visual markers (arrows) on the chart based on specific interactions between these values:
- Buy/Low Signals: These appear when the immediate oscillator shows a downward dip while the smoothed trend is still in negative territory, suggesting the price may be reaching an exhaustion point and preparing to bounce.
- Sell/High Signals: These appear when the immediate oscillator shows an upward peak while the smoothed trend is in positive territory, suggesting the price may be hitting a ceiling and preparing to retreat.
In summary, this script filters out market "jitter" by comparing current price action against a weighted average, then smooths that result to highlight high-probability reversal points for the trader.
//+------------------------------------------------------------------+
//| forecast osc.mq4 |
//| Copyright © 2005, Nick Bilak, beluck[AT]gmail.com |
//| http://forexsystems.ru/phpBB/ |
//+------------------------------------------------------------------+
#property copyright "Copyright © 2005, Nick Bilak, beluck[AT]gmail.com"
#property link "http://forexsystems.ru/phpBB/index.php"
#property indicator_separate_window
#property indicator_buffers 4
#property indicator_level1 0
#property indicator_color1 DarkTurquoise
#property indicator_color2 LawnGreen
#property indicator_color3 Magenta
#property indicator_color4 Aqua
//---- input parameters
extern int regress=15;
extern int t3=10;
extern double b=0.7;
//---- buffers
double osc[];
double osct3[];
double hiSig[];
double loSig[];
int shift,limit,length;
double b2,b3,c1,c2,c3,c4,w1,w2,n,WT,forecastosc,t3_fosc,sum,e1,e2,e3,e4,e5,e6,tmp,tmp2;
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
SetIndexStyle(0,DRAW_HISTOGRAM);
SetIndexBuffer(0,osc);
SetIndexEmptyValue(0,0);
SetIndexStyle(1,DRAW_LINE);
SetIndexBuffer(1,osct3);
SetIndexStyle(2,DRAW_ARROW);
SetIndexBuffer(2,hiSig);
SetIndexEmptyValue(2,EMPTY_VALUE);
SetIndexArrow(2,159);
SetIndexStyle(3,DRAW_ARROW);
SetIndexBuffer(3,loSig);
SetIndexEmptyValue(3,EMPTY_VALUE);
SetIndexArrow(3,159);
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int counted_bars=IndicatorCounted();
if (counted_bars<0) return(-1);
if (counted_bars>0) counted_bars--;
limit=Bars-31;
if(counted_bars>=31) limit=Bars-counted_bars+2;
for (shift=limit+30;shift>=0;shift--) {
b2=b*b;
b3=b2*b;
c1=-b3;
c2=(3*(b2+b3));
c3=-3*(2*b2+b+b3);
c4=(1+3*b+b3+3*b2);
n=t3;
if (n<1) n=1;
n = 1 + 0.5*(n-1);
w1 = 2 / (n + 1);
w2 = 1 - w1;
length=regress;
sum = 0;
for (int i = length; i>0; i--) {
tmp = length+1;
tmp = tmp/3;
tmp2 = i;
tmp = tmp2 - tmp;
sum = sum + tmp*Close[shift+length-i];
}
tmp = length;
WT = sum*6/(tmp*(tmp+1));
forecastosc=(Close[shift]-WT)/WT*100;
e1 = w1*forecastosc + w2*e1;
e2 = w1*e1 + w2*e2;
e3 = w1*e2 + w2*e3;
e4 = w1*e3 + w2*e4;
e5 = w1*e4 + w2*e5;
e6 = w1*e5 + w2*e6;
t3_fosc = c1*e6 + c2*e5 + c3*e4 + c4*e3;
osc[shift] = forecastosc;
osct3[shift] = t3_fosc;
if (osc[shift+1] > osct3[shift+2] && osc[shift+2] <= osct3[shift+3] && osct3[shift+1]<0) loSig[shift+1] = t3_fosc-0.05;
if (osc[shift+1] < osct3[shift+2] && osc[shift+2] >= osct3[shift+3] && osct3[shift+1]>0) hiSig[shift+1] = t3_fosc+0.05;
}
Comment("WT=",WT);
return(0);
}
//+------------------------------------------------------------------+
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