G.O.A.T. Scalper Diagnostics v1

1 сент.OVERVIEW:
The G.O.A.T. Scalper Diagnostics indicator system enables users to discover unorthodox indicator patterns, reading price charts in unusual ways, thus gaining an edge over the majority of market participants they trade against.

CONCEPTS:

Th G.O.A.T. Scalper Diagnostics is a system that aims to satisfy the fundamental condition for successful online trading - providing an edge.

It's a battle between advantages. To take other people's money, successful traders must have an advantage over everybody else. To hope for consistent success in trading, you need to do things differently and see what almost nobody else sees. Of course then you must act on it, and that's where the G.O.A.T. Scalper Diagnostic's mandate ends.

I believe the vast majority of indicators out there show you what everybody else sees. I've always been an indicator guy, I respect and cherish most indicators and I know a good indicator when I see it.

However, although most indicators are great works of art, their practicality is in most cases doubtful. Presenting great information is one thing, but providing an edge over the people you trade against is something different.



What Everybody Else Sees

The G.O.A.T. Scalper Diagnostics is based on indicators most of you have probably heard of and used:

• Moving Averages (particularly the Kaufman Moving Average, among others)
  
• ADX and DI
  
• Bollinger Bands
  
• Stochastic (particularly the Stochastic RSI)
  

Most traders should be well familiar with these classic indicators, they've provided the basis for online indicator trading for decades. But it's also true that due to how popular online trading has become all over the world, one is more and more unable to use these indicators successfully on lower timeframes.

Usually, more noteworthy success is achieved by going up in scale and discovering the timeframe where a particular indicator produces no false signals. Often times these timeframes range from bi-weekly to multi-month scale. In other words, consistently successful low timeframe trading and scalp trading in particular are now almost impossible using indicators.

Traders that dominate the scalping arena are big professional/institutional groups of traders, who have systematic access to the order books of most exchanges. This can be achieved one way or another, but not by individuals, small groups without significant capital or simply traders who lack political/social power and influence in the trading field.

In other words - giant order book traders have an edge over everybody else, who use indicators to trade on lower timeframes.

Through a series of interventions into these classical indicators, the G.O.A.T. System brings them back into the lower timeframe competitive game. Most original formulas are preserved, but these immortal classics are applied in ways popular TA would consider unorthodox.

Ingenious Indicators Built by Creators

The G.O.A.T. Scalper Diagnostics relies on the fundamental work of others. The System is developed on the basis of:

• Quadratic Kernel Regression - it uses the publicly published library of Justin Dehorty: https://www.tradingview.com/u/jdehorty/
• PMARP - Price Moving Average Ratio & Percentile, publicly published by "The_Caretaker": https://www.tradingview.com/u/The_Caretaker/

These Creators deserve full credit for their fundamental work and are endorsed by the G.O.A.T. Scalper Diagnostics project.

And yet... ingenious and inspired as these tools are, in my humble opinion the general public is presented with a rather unproductive way to apply them. In my own view, these wonderful tools built by JDehorty and The_Caretaker have a massive potential should they be applied and wielded in a different direction. So I tried to bring my vision about them into flesh with the G.O.A.T. Diagnostics.

What the G.O.A.T. Scalper Diagnostics Is and How to Use It

It's a System for new pattern discovery, bringing the disciplines of pattern and indicator trading together.

By using it as a stand-alone, or mixing it with other great indicators, one is able to discover new indicator patterns. Patterns can be compared, matched together and categorized. By applying statistics to differentiated historical pattern groups, we're able to derive their meaning.

Thus, the trader is able to research their own "alphabet" to read the price charts. After categorizing and differentiating pattern groups with statistically predominant meaning, the trader is then able to read into longer scenarios - price set-ups that are harder to detect due to them being stretched in time or misshapen according to the particular situation.

The G.O.A.T. Scalper leverages and encourages group trading, as different traders will probably discover different price "alphabets" for themselves, potentially giving rise to a social economy of sharing and combining "trading languages" based on indicator patterns people have discovered via the G.O.A.T. Diagnostics.

Support/Resistance Trading

The G.O.A.T. Scalper has its own way of deriving Support/Resistance.

Unlike most existing S/R indicators, The Scalper derives Support/Resistance not by measuring price highs, lows and closes, but solely by using momentum and trend strength.

This seems like a much more versatile way to plot S/R during scalping on low timeframes where time is of essence and the trader's view is too narrow to have macro S/R levels in constant consideration.

The Scalper's way to derive S/R in real time and on the go, while staying very relative to important higher timeframe S/R zones, makes it much more desirable than any other S/R indicator I've thus far encountered.

All S/R functionality is derived from the classical ADX and DI indicator. To do this, I use the ADX and DI in an unpopular way. To generate the actual plot of S/R levels I also modify the indicator's code, not by removing functional parts from it, but adding more to it in order to filter the signals it produces.

I can metaphorically describe its action in the following way:

• Imagine you're Price action itself;
  
• You're walking through a labyrinth or corridors. You're walking through one straight corridor, and it has a crossing with another corridor ahead;
  
• Very strong wind is blowing along that other corridor. You can't see the wind, but when you reach it and try to move past it, the force of the wind resists your moving ahead and instead pushes you sideways.
  
• At this point, the G.O.A.T. Diagnostics already knows this can only be one thing - resistance.
  

Orthodox TA and trading demand retests. In my opinion, this deeply rooted tradition wastes time proving the obvious, then wastes time again double-proving the validity of recent past, while scalping opportunities go to waste. Modern successful traders are way ahead of the popular strategy of testing and retesting S/R that almost every trader uses. So-called "Stops hunting" is just one expression of this situation, where wide adoption of the S/R retesting strategy actually lures unsuccessful traders into the schemes of the successful few.

In my own way of trading, I use the G.O.A.T. Diagnostics to take action on Support/Resistance as it's plotted in real time.

But probably my biggest heresy into the DI is my opinion, that the crossings of the +DI and -DI are useless and should actually be discarded.

My research shows that the DIs often show indications of being "oversold", but don't seem to exhibit an "overbought" state. Statistically, I've had much more success basing my TA on that, rather than cross-ups and cross-downs of the DI plot lines.

Therefore I discarded these crossings by presenting the DI part of the ADX and DI as a Heatmap channel rather than crossing lines.

To further enhance the ability of the System to provide S/R analysis, I plot this Heatmap onto an adjustable price offset plots (a percentage above and below current price).

In modern times, the vast majority of trading is done by automatic machines and algorithms. To give a specific example, one can easily notice, that a 5% offset of the BTC 1h price plot leads to remarkably accurate S/R charting. Following the rule to chart a S/R line connecting highs and lows on the 5% price offset often successfully "foresees" valid S/R zones before price ever visits them. Or, the levels were visited so far back in the timeframe's history that orthodox understanding considers them "invalidated" or washed away in the noise of the relevant volume profile.

My explanation for this is simple - I think Grid bots now dominate automatic trading across the majority of exchanges.

In my understanding, by adjusting the percentage offset of current price action I can often discover relevant conglomerations of dominating Grid bot cell parameters and anticipate price reaction. By plotting the DI heatmap on these price action offsets I can use the indicator for my trading decisions.

Heatmaps

Every heatmap produces different series of data. They're not the same.

• Bollinger Band heatmap depicts the percentile distance between the Band's extremes.
  
• The price candles heatmap, and the KAMA moving average heatmap, depict the percentile distance between price and the KAMA. So, it's the same thing. However, the percentile of that distance is calculated in two different ways, hence the difference in color in every particular moment. This color discrepancy aims to visualize the "strain" between price action and KAMA, like a soft and hard "springs" that go in unison with each other in sustainable moves, and in dissonance with each other during unsustainable moves.
  
• Price offset heatmap depicts the percentile average of the +DI (above price) and the -DI (below price). A Hot temperature above price and a Cold temperature below price would mean a strong bullish sentiment, and vise versa, while Green would mean neutrality in sentiment.
  
• There are important interplays between different heatmaps. For example, although representing totally different things, a Teal price bar would almost always (according to historical statistics) foreshadow a change in DI's heatmap sentiment. That's just one avenue of correlation between S/R analysis and sentiment analysis using the G.O.A.T. Diagnostics.
  

Oscillator Chart

In terms of applying Quadratic Kernel Regression, I endorse the natural principle that no center can exist without a periphery, and no periphery can exist without a center. Therefore I try to pay attention not only to the average of the regression's values, but also to the cloud of data points itself.

Following this understanding, I attempt to depict the natural cycles of price converging/diverging towards/from its regression average. To do this, I apply the classic Stochastic formula.

Thus, the Oscillator part of the System depicts the following:

• Thin heatmap line displays the cycles of price converging with its quadratic kernel regression average (moving down), and diverging with its regression average (moving up). Its heatmap depicts the percentile of this oscillation.
  
• The wider heatmap line displays the KAMA's cycles of convergence/divergence with its own quadratic kernel regression average. The reason for this is again creating discrepancy - while KAMA is based on price action, its regression data values differ from those of price action's regression. This discrepancy produces useful historic patterns that can be studied statistically.
  
• The thin and wide purple oscillator lines depict the change of slope of price action regression average and KAMA regression average, respectively. Very often change of slope is not detectable with the naked eye, but clearly indicated by the oscillators.
  

By combining all these elements into a single analysis, a trader can detect hidden trends that are yet to become visible for the rest of market participants.

For example, convergence of price with its quadratic kernel regression average while the slope of the average deteriorates down in most cases (according to statistics) means a sideways consolidation in a downtrend before downtrend continuation. Conversely, deviation of price action from its regression average while the regression average slope deteriorates down usually marks the very beginning of a downtrend.

Bollinger Bands

Bollinger Bands are not modified, but are based on quadratic kernel regression values. Thus, if Bollinger Bands themselves are indicative of volatility, then based on kernel regression values, they should indicate the volatility of change of values in the regression's window.

Again, applying it to both the price and KAMA regression data series, a discrepancy is highlighted that leads to useful historical patterns subject to analysis and categorization.

SOME EXAMPLES

Support / Resistance







Support/Resistance levels are market by White Triangles with dotted lines plotted from them, in real time. The indicator plots Ghost Triangles in anticipation of Support/Resistance, preparing the trader for the eventual confirmation of a zone of interest and signaling price is feeling Support or Resistance pressure.

Dialing the length of the S/R lines to 25 makes the indicator more useful.

Dialing the setting to 500 clearly shows macro S/R zones by conglomerating and bundling individual lines. The thicker the bundling and the confluence of lines, the more significant the zone.

Thus lower timeframe scalping and trading is made more easy, without the need to do nearly as much manual S/R charting. Support/Resistance analysis and plotting is entirely based on a modified ADX.

Heatmap



Sustainable moves are generally marked by Green price color and calm KAMA colors.

Unsustainable moves are usually marked by more extreme colors of price bars and KAMA. Red usually means price is unsustainably distanced from the KAMA, while deep Blue usually means price is undesirably close to the KAMA, foreshadowing a directional distancing.

Usually Teal color of price bars and KAMA foreshadow a change of sentiment of the outside Heatmap sentiment channel.

Red color of the outside channel always signals the direction of the desired sentimental movement, while Blue signals the extent at which the counter-element suffers. Thus, one side being Green, while the other is Blue, often means the Blue will soon evolve into a warmer color, attracting price in that direction. Outside Heatmap channel is entirely based on a modified DI.

Oscillator Chart



An example of Chart Diagnosis using the Oscillator and other elements of the G.O.A.T. Scalper:

• First (far left), a Resistance is plotted. This coincides with price bars being Red (distressed state). The thin colorful Oscillator line takes an Up-turn, signifying a period of price moving away from its Quadratic Kernel Regression (pink moving average).
  
• After Price cools down to Green sustainable colors, a Support is plotted. During this time, the thin colorful line is falling down, signifying a period when the distance between price action and its quadratic kernel regression average is decreasing.
  
• During this phase, the thin purple Oscillator line goes up. This signifies the slope of the price regression is restoring to the upside.
  
• Next, the thin colorful line starts going up again, signifying another period of price getting further away from its regression average. This time to the upside.
  
• Resistance is being broken and new support is established. At this point, the thin colorful line starts falling again, signifying distance between price and its regression MA is shortening. This is clearly visible as a sideways consolidation (with a slight tilt up of slope).
  
• A moment comes when all lines - the price and KAMA lines, and price and KAMA regression slopes, all point down. A new down period is clearly starting. This is further indicated by Teal price bars and new Resistance forming. Notice how the external heatmap channel goes into more balanced Green colors with trend enthusiasm calming down.
  

This analysis may appear to be overwhelming and confusing at first, as these metrics are unorthodox and unpopular. But different aspects of the indicator can be toggled ON/OFF to single them out, which makes observations much simpler for new users. After some time spent discovering personal patterns, or reviewing other users' catalogues with already published pattern libraries, it soon becomes easy to read charts in this new way.

Bollinger Bands



Bollinger Bands provide another way to produce patterns that give users specific chart information.

One noteworthy indication is when the price and KAMA Bollinger Bands separate their value zones. Since the zones of these Bands are based on the kernel regression values of the respective sources, their separation is significant and too often means violent reversals or violent continuations (which usually can be judged using the other metrics the System provides, or additional indicators of choice).

Another noteworthy Bollinger Band pattern is when price action leaves a prolonged trending move.

• First phase of the end of a prolonged trending move is the BB zones expanding and doing a significant overlap.
  
• Second stage is price getting reaccepted in the Price BB. This however doesn't mean reacceptance in the KAMA BB and if the moment isn't right, usually leads to bounces and continuations.
  
• The KAMA needs to "make space" for price to get reaccepted into the KAMA BB. While the KAMA is outside its BB or very near to its wall, price reacceptance into it is not very probable. When KAMA withdraws from its BB wall, opening an "entrance on its membrane", that's when price is eligible to get reaccepted into the KAMA BB. That's usually the moment the long awaited consolidation starts and a long trending move is over.
  

Users of the G.O.A.T. Scalper Diagnostics can discover many more patterns and correlations between patterns within the System. But the System itself can multiply all possible patterns when inspected in the context of additional indicators, leading to vast possibilities of signal and pattern discovery with huge potential.

A very good idea would probably be to use the G.O.A.T. Diagnostics together with the Ichimoku.

Ichimoku has always been famous for its genius simplicity and elegant profoundness, but notorious for its total lack of accuracy, as well as general uselessness on lower timeframes. The G.O.A.T. System has the potential to enhance all of Ichimoku's strengths and cure its weaknesses.

Yet another good idea may be to pair it with kindred indicators, like the Gaussian Channel, which has a stunning performance, but suffers from too high level of generalization. The Diagnostics can provide the intricate texture of price manoeuvres the Gaussian Channel fails to register, while the GC can give the Scalper even more solid context for its patterns.

The worthwhile possibilities seem endless...

Entry Table



I've added a little Entry Table at the bottom right corner. It's designed to potentially help scalpers trade faster, and to visualize a potential trade they're thinking about before they execute it. A Stop Loss is visually plotted in real time to better visualize it's placement in the chart context.

It encourages responsible risk management in its settings:

The user enters the amount of their trading portfolio;

Then specify the percentage of their portfolio they're willing to risk at every trade;

After that the user can chose to specify a flat percentage Stop Loss.

The table will calculate the size of the entry of a market order, so the user only risks the specified percentage of their portfolio should the specified Stop Loss level is hit.

There's also the option to use automatically suggested Stop Loss, based on recent volatility. The actual Stop Loss is calculated 20% away from the actual volatility level, to better protect from unforeseen wicks.

• In the current example, the user with a $1000 trading portfolio has to do a $1000 entry to lose 1% of their portfolio ($10) at a 1% Stop Loss.
  
• But the user has to do a $2,525 entry in order to lose 1% of their portfolio (%10) at a much closer Stop Loss which is less than 1%, based on recent volatility.
  

The Entry Table should be considered as a cosmetic convenience and not a dedicated risk management tool.

CONCLUSION:

The G.O.A.T. Scalper Diagnostics is an indicator System, based on popular, but modified and tweaked versions of indicators like the ADX and DI, Stochastic, Bollinger Bands and MAs. It also leverages the remarkable work of inspired creators: JDehorty's Quadratic Kernel Regression library, and The_Caretaker's PMARP.

The G.O.A.T. Scalper Diagnostics indicator system enables users to discover so-called new "indicator-pattern alphabets", reading price charts in new and unorthodox ways, thus gaining an edge over the majority of market participants they trade against.

The high degree of freedom when discovering new patterns, either within the System itself or correlating its output to external auxiliary indicators, highlights the System's potential for original discoveries leading to highly personalized trading strategies. Exchanging information about personal pattern libraries can potentially also give birth to new private trading communities.

5 сент.

Информация о релизе

Update: Removed unnecessary visualizations that proved to be of little practical use.
Changed some visualizations to make Oscillator interpretation less confusing:

• Thin oscillator line is now Red or Green, if price is below or above it's Regression, respectively. This makes directional orientation easier.
  
• A cosmetic purple 0 line is now plotted on the Oscillator, symbolizing the price Regression. Makes it easier for users to remember that when thin line is falling down, it's a convergence cycle, when it's going up, it's a divergence cycle.
  
• Thin purple line still represents Regression Slope change.
  

9 сент.

Информация о релизе

MAJOR UPDATE: Added new data series - the Volume Analysis. It provides Liquidity zones plot and Volume Heatmap for additional insight into price action (based on the already described approach). Minor updates in Settings Menu, some redundant data series (slopes of MAs) were removed. Some redundant coloring was removed (Bollinger Band walls).

9 сент.

Информация о релизе

UPD: Updated chart

3 дня назад

Информация о релизе

UPD: KAMA regression is added to visibility settings.