Instant_Trendline_Filter
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This tool is designed to help traders visualize and filter price trends on a chart by identifying the underlying direction of the market. Instead of looking at raw, volatile price movements that can often be misleading, this script smooths out the data to reveal a clearer trend line.
How it Works
The logic follows a three-step process to translate messy market data into a clean visual signal:
1. Price Selection The tool starts by choosing which "type" of price to look at. It offers two options:
- Median: It looks at the midpoint between the highest and lowest prices reached during a specific time period.
- Typical: It takes an average of the high, low, and closing prices. By using these averages rather than just the "closing price," the tool creates a more balanced view of what happened during each candle or bar.
2. Mathematical Smoothing Once the price type is selected, the script applies a specialized mathematical formula. This calculation acts like a sophisticated filter; it looks at the current price and compares it against previous data points to calculate a "weighted" trend. The goal here is to strip away "noise"—those small, rapid ups and downs that don't actually represent a change in the overall market direction—leaving you with a fluid, continuous line.
3. Trend Projection Finally, the script generates two distinct visual components:
- The primary smoothed line, which tracks the current trend momentum.
- A secondary calculation that helps define the trajectory of that trend by comparing the immediate past to the broader movement.
Summary for the Trader
In simple terms, this indicator acts like a "steady hand" on a shaky camera. While the actual market price might jump around erratically, this script filters those jumps out to show you the true path the price is traveling. By following the colors and lines provided by the tool (Lime and Red), you can better identify whether the current momentum is pushing upward or downward, helping you stay aligned with the dominant trend of the market.
//+------------------------------------------------------------------+
//| Instantaneous Trendline Filter|
//| Copyright © 2006, Luis Guilherme Damiani |
//| http://www.damianifx.com.br |
//|
//+------------------------------------------------------------------+
#property copyright "Copyright © 2006, Luis Guilherme Damiani"
#property link "http://www.damianifx.com.br"
//----
#property indicator_buffers 2
#property indicator_chart_window
#property indicator_color1 Lime
#property indicator_color2 Red
//---- input parameters
extern double alpha=0.07;
extern int maxbars=2000;
extern string
Price_Choice="----- Typical or Median --------------";
extern bool is_median=true;
//---- buffers
double ind1[];
double ind2[];
//double AuxBuffer[];
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
SetIndexStyle(0,DRAW_LINE);
SetIndexBuffer(0,ind1);
SetIndexStyle(1,DRAW_LINE);
SetIndexBuffer(1,ind2);
// SetIndexStyle(2,DRAW_LINE);
// SetIndexBuffer(2,AuxBuffer);
// SetLevelValue(0,0.8);
// SetLevelValue(1,-0.8);
// ArrayInitialize(ind1,0);
// ArrayInitialize(ind2,0);
// ArrayInitialize(AuxBuffer,0);
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custor indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
//----
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
double pr0,pr1,pr2=0;
int counted_bars=IndicatorCounted();
//double Normalized=0;
//double Fish=0;
//---- check for possible errors
if(counted_bars<0) return(-1);
int limit=Bars-counted_bars;
if(limit>maxbars)limit=maxbars;
//if (limit>Bars-1)limit=Bars-1;
//----
for(int i=limit; i>=0;i--)
{
if(is_median)
{
pr0=(High[i]+Low[i])/2;
pr1=(High[i+1]+Low[i+1])/2;
pr2=(High[i+2]+Low[i+2])/2;
}
else
{
pr0=(High[i]+Low[i]+Close[i])/3;
pr1=(High[i+1]+Low[i+1]+Close[i+1])/3;
pr2=(High[i+2]+Low[i+2]+Close[i+2])/3;
}
ind1[i]=(alpha-MathPow(alpha/2,2))*pr0
+(MathPow(alpha,2)/2)*pr1
-(alpha-3*MathPow(alpha,2)/4)*pr2
+ 2*(1-alpha)*ind1[i+1]
-MathPow(1-alpha,2)*ind1[i+2];
ind2[i]=2*ind1[i]-ind1[i+2];
}
//----
return(0);
}
//+------------------------------------------------------------------+
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