V-T&Bv6
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The V-T&B Indicator is a technical analysis tool designed to identify specific price action signals by analyzing the relationship between candlestick bodies, wicks (shadows), and overall market volatility. Rather than relying on standard trend lines alone, it looks for "exhaustion" or "rejection" points where the price attempts to move in one direction but is pushed back, leaving a significant wick behind.
Core Logic & Methodology
The script operates by evaluating three primary components of price movement:
1. Wick Rejection Analysis
The indicator focuses heavily on the size of a candlestick's wicks relative to its body. It looks for instances where the upper or lower "shadow" of a candle is significantly larger than the actual "body" (the space between the open and close prices).
- Upper Rejection: If a candle moves higher than the previous one but leaves a long top wick, it suggests sellers are stepping in.
- Lower Rejection: If a candle moves lower than the previous one but leaves a long bottom wick, it suggests buyers are pushing back.
2. Market Volatility ("Juice") Filtering
To ensure that signals are not triggered during "noisy" or low-activity periods, the script incorporates a volatility filter referred to in the code as "Juice." It uses a Standard Deviation calculation (a common statistical measure of how much prices are fluctuating) over a set period.
- The indicator only validates a signal if the current market movement exceeds a specific threshold of this volatility. This helps filter out minor price fluctuations, ensuring that the signals shown represent significant market activity.
3. Contextual Trend States
The logic does not view every wick in isolation; it categorizes the current market behavior into four distinct "States" based on the relationship between the current candle and the previous one:
- Bullish/Bearish Momentum: It identifies whether the price is currently trending up or down.
- Continuity vs. Reversal: By comparing the current candle type (Bullish or Bearish) against the previous one, the script determines if the market is continuing its path or showing signs of structural change.
Visual Indicators and Alerts
When all conditions are met—specifically when a significant wick rejection occurs during high volatility and matches the contextual state of the market—the script provides two visual markers:
- V-Top (Red Arrows): Placed above the candles to signal potential overhead resistance or a price ceiling.
- V-Bottom (Green Arrows): Placed below the candles to signal potential underlying support or a price floor.
Additionally, the script can be configured to provide audible notifications, allowing traders to react in real-time when these specific "Top" and "Bottom" conditions are satisfied on the chart.
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V-T&Bv6
//+------------------------------------------------------------------+
//| V-T&B.mq4 |
//| Don Lawson (don_forex) |
//+------------------------------------------------------------------+
#property copyright "Coded by Don Lawson (don_forex)"
#property link "d_n_d_enterprises@sbcglobal.net"
#property indicator_chart_window
#property indicator_buffers 2
#property indicator_color1 Red
#property indicator_width1 2
#property indicator_color2 Green
#property indicator_width2 2
extern double WickRatio = 0.5;
extern double WickPercent = 50;
extern int JuicePeriod = 7;
extern int JuiceLevelForAlert = 5;
extern bool Notify = false;
extern bool UseNew = true;
double VTop[];
double VBottom[];
double DistanceFromCandle;
int Level = 5;
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators
SetIndexStyle(0, DRAW_ARROW, EMPTY);
SetIndexArrow(0, 234);
SetIndexBuffer(0, VTop);
SetIndexStyle(1, DRAW_ARROW, EMPTY);
SetIndexArrow(1, 233);
SetIndexBuffer(1, VBottom);
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator deinitialization function |
//+------------------------------------------------------------------+
int deinit()
{
//----
//----
return(0);
}
void SetVTop(int index)
{
double Juice, JuiceLevel;
// Check for Juice
JuiceLevel = Level*Point;
if (Period()==5 ) JuiceLevel=JuiceLevel/2;
Juice = iStdDev (NULL,0,JuicePeriod,MODE_EMA,0,PRICE_CLOSE,index)-JuiceLevel;
if (Juice > JuiceLevelForAlert*Point) {
VTop[index] = High[index]+ DistanceFromCandle;
if (Notify) PlaySound("V-Top.wav");
}
}
void SetVBottom(int index)
{
double Juice, JuiceLevel;
// Check for Juice
JuiceLevel = Level*Point;
if (Period()==5 ) JuiceLevel=JuiceLevel/2;
Juice = iStdDev (NULL,0,JuicePeriod,MODE_EMA,0,PRICE_CLOSE,index)-JuiceLevel;
if (Juice > JuiceLevelForAlert*Point) {
VBottom[index] = Low[index]- DistanceFromCandle;
if (Notify) PlaySound("V-Bottom.wav");
}
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int limit, i,State;
double WickPenetration;
double BullWickPenHi,BullWickPenLow;
double BearWickPenHi,BearWickPenLow;
double BullWickHi,BullWickLow,BullBody;
double BearWickHi,BearWickLow,BearBody;
int counted_bars=IndicatorCounted();
//---- check for possible errors
if(counted_bars<0) return(-1);
//---- last counted bar will be recounted
if(counted_bars>0) counted_bars--;
limit=Bars-counted_bars;
WickPenetration = WickPercent/100.0;
DistanceFromCandle = Point*8;
for(i = 1; i <= limit; i++) {
bool CurrentBull = false,
CurrentBear = false,
Bull = false,
Bear = false,
HiWick = false,
LoWick = false;
if (Open[i-1]<Close[i-1])
CurrentBull = true;
else
CurrentBear = true;
if (Open[i]<Close[i])
Bull = true;
else
Bear = true;
BullWickHi = High[i] - Close[i];
BullWickLow = Open[i] - Low[i];
BullBody = Close[i] - Open[i];
BearWickHi = High[i] - Open[i];
BearWickLow = Close[i] - Low[i];
BearBody = Open[i] - Close[i];
// Check for VTOP
if (High[i] > High[i+1])
{
if (Bull) {
if ((BullWickHi > BullBody * WickRatio))// && (BullWickHi > BullWickLow)
HiWick = true;
}
if (Bear){
if ((BearWickHi > BearBody * WickRatio))// && (BearWickHi > BearWickLow)
HiWick = true;
}
}
// Check for VBottom
if (Low[i] < Low[i+1])
{
if (Bull){
if ((BullWickLow > BullBody * WickRatio))// && (BullWickLow > BullWickHi)
LoWick = true;
}
if (Bear){
if ((BearWickLow > BearBody * WickRatio))// && (BearWickLow > BearWickHi)
LoWick = true;
}
}
// Set up State Table
if (CurrentBear && Bull) State = 1;
if (CurrentBear && Bear) State = 2;
if (CurrentBull && Bull) State = 3;
if (CurrentBull && Bear) State = 4;
// Set Arrow
if (HiWick) {
BullWickPenHi = Close[i] + BullWickHi * WickPenetration;
BearWickPenHi = Open[i] + BearWickHi * WickPenetration;
switch (State)
{
case 1 : // CurrentBear && Bull
if (UseNew)
{
if ( Open[i-1] < BullWickPenHi) SetVTop(i);
}
else
{
SetVTop(i);
}
break;
case 2 : // CurrentBear && Bear
if (UseNew)
{
if (Open[i-1] < BearWickPenHi) SetVTop(i);
}
else
{
SetVTop(i);
}
break;
case 3 : // CurrentBull && Bull
if (UseNew)
{
if (Close[i-1] < BullWickPenHi) SetVTop(i);
}
else
{
SetVTop(i);
}
break;
case 4 : // CurrentBull && Bear
if (UseNew)
{
if (Close[i-1] < BearWickPenHi) SetVTop(i);
}
else
{
SetVTop(i);
}
break;
}
}
if (LoWick) {
BullWickPenLow = Open[i] - BullWickLow * WickPenetration;
BearWickPenLow = Close[i] - BearWickLow * WickPenetration;
switch (State)
{
case 1 : // CurrentBear && Bull
if (UseNew)
{
if (Close[i-1] > BullWickPenLow) SetVBottom(i);
}
else
{
SetVBottom(i);
}
break;
case 2 : // CurrentBear && Bear
if (UseNew)
{
if (Close[i-1] > BearWickPenLow) SetVBottom(i);
}
else
{
SetVBottom(i);
}
break;
case 3 : // CurrentBull && Bull
if (UseNew)
{
if (Open[i-1] > BullWickPenLow) SetVBottom(i);
}
else
{
SetVBottom(i);
}
break;
case 4 : //CurrentBull && Bear)
if (UseNew)
{
if (Open[i-1] > BearWickPenLow) SetVBottom(i);
}
else
{
SetVBottom(i);
}
break;
}
}
}
return(0);
}
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