Correlated Movement Indicator V2Hello!
This script was briefly known as as Bing Chilling. I converted this to Pine Script V5 to ensure compliance with publishing requirements.
This script tracks RSI and inserts an indicator when correlated movement is detected. Proximity of current tick to indicator origin tick determines freshness of the indicator.
DO NOT sit on the indicator for a long time. This is not a magic solution. It is very accurate but, not always precise. Ensure that you use other factors to determine the relevance of the indicator on current tick. This script can technically be used on any security/commodity/currency. Your Mileage May Vary! Proceed with caution as always.
General Workflow:
Look at proximity to where the flag is placed, general volatility, and other indicators and you can potentially determine the direction/strength. Not always the duration. The indicator could be for 30s, 1hr, 1 day, or whatever the market feels like. It depends on precision/quantity of pricing data. ex. 30min tick rate pricing vs. 1 day tick rate pricing will change the scope.
So if the time scope shows all sell from 1 week -> 3 months except for a couple recent buy indicators on the day, then it may be a bad call long term but, might be good for a short term play. Very volatile. Careful.
If it was all green with long term indicators such as 1 month -> 1 year, then it looks more like a buy and forget type strategy.
If it's all green with a recent red then you can try and figure out what the relative the bottom is so you can buy for long term at a slightly more favorable price.
Flip all that for shorting. I highly recommend AGAINST shorting since the stakes are very different and usually involves taking out what is essentially a loan to bet against the market.
This script pairs nicely with the top pick indicator when you search "Heiken Ashi". I use that to determine peaks and pits to better guess a good time to open a position.
This should be used alongside other indicators. Good for short term day trading and long term hold and forget. (Don't actually forget. Set some alerts periodically.)
Please use caution. Please do not take what I've said here as fact and diamond pepe hands bet all on green to the moon. This, like all the other strategies and indicators on this site, are used as tools to inform you about potential and to categorize/depict data in a more human recognizable way. If you have access to a paper account try there first.
Happy trading!
- Zetsu
