ATR Volatility Based System Indicator for ThinkorSwim

[BenTen]

Found this interesting script on TradingView. I think it's based on Jim Berg's ATR Volatility Based System.

thinkScript Code

# ATR Volatility Based System Jim Berg
# Assembled by BenTen at useThinkScript.com
# Converted from https://www.tradingview.com/script/UxWO2H5P/

input length = 10;

def EntrySignal = close > (lowest(low, 20) + 2 * atr(Length));
def ExitSignal = close < (highest(high, 20) - 2 * atr(Length));
def TrailStop = highest(close - 2 * atr(Length), 15);
def ProfitTaker = expAverage(high, 13) + 2 * atr(Length);

assignPriceColor(if EntrySignal then Color.GREEN else if ExitSignal then Color.RED else Color.WHITE);

def entry = ((lowest(low, 20)) + 2 * atr(Length));
def exit = ((highest(high, 20)) - 2 * atr(Length));
plot trail = TrailStop;
plot profit_taker = ProfitTaker;

trail.SetDefaultColor(GetColor(0));
profit_taker.SetDefaultColor(GetColor(1));

AddCloud(entry, exit, color.yellow, color.yellow);

 

[diazlaz]

cool thanks Ben for the port and awareness. so, if the price is above the cloud long, if in the cloud neutral, outside (below) the cloud short?

 

[BenTen]

@diazlaz Yes, the color of the candles can also help too. If it switches from red to green or green to red then that's the reversal in trend.

 

[skynetgen]

I took liberty to improve it a bit. I really like scan results so far. I am gonna play FDP from for daily swing low

# ATR Volatility Based System Jim Berg
# Assembled by BenTen at useThinkScript.com
# Converted from https://www.tradingview.com/script/UxWO2H5P/
#https://trade29.com/jim-bergs-truth-about-volatility-trading-system/
#fixes for trail and profit taker .+ scan ready signal

input length = 10;
input fast=13;
input HHLLlength=20;
def TrailStop = highest(close - 2 * atr(Length), fast+2);
def EntrySignal = close > (lowest(low, HHLLlength) + 2 * atr(Length)) and close>trailstop ;
def ExitSignal = close < (highest(high, HHLLlength) - 2 * atr(Length)) and close<trailstop;
def ProfitTaker = expAverage(if entrysignal then high else low, fast)
                + 2 * atr(Length)*(if entrysignal then 1 else -1);

def neutral=!entrysignal and !exitsignal;
assignPriceColor( if  EntrySignal then Color.GREEN else if ExitSignal then Color.RED else Color.gray);

def entry = ((lowest(low,  HHLLlength)) + 2 * atr(Length));
def exit = ((highest(high,  HHLLlength)) - 2 * atr(Length));
plot trail = TrailStop;
plot profit_taker = ProfitTaker;

trail.SetDefaultColor(GetColor(0));
profit_taker.SetDefaultColor(GetColor(1));

AddCloud(entry, exit, color.orange, color.orange);
plot scan=if  !entrysignal[1] and entrysignal  then 1
        else if  !exitsignal[1] and exitsignal then -1
        else 0;

here is scan I am using https://tos.mx/HdogcGE

So excited for this scanner, entered 3 testing position - really like setups. Will update on them

 

[securedabag23]

@skynetgen Can you add chimes/bells for arrows when the they show up? I tried adding them myself and the alerts kept firing when no arrow was present.

 

[mc01439]

@BenTen - Why was the cloud added? I do not recall a cloud being used? I'm guessing it is used instead of the 34 week MA?

 

[BenTen]

@mc01439 I believe it was in the original code. Cloud = distance between exit and entry. Let me know if you see something else.

 

[skynetgen]

I love this study on daily so much. This is latest version . There is a lot of stuff to add and build on but as it is very very good for daily trend changes .
https://tos.mx/OJGiDuU
I have a theory why its so good and it fits in line with my thinking. - There is a lot which can be improve but its uncanny how such ATR volatility reflects market structure even in a simple study like this

 

[BenTen]

@skynetgen Thanks for the improvement. Will check on the daily

 

[securedabag23]

@

I love this study on daily so much. This is latest version . There is a lot of stuff to add and build on but as it is very very good for daily trend changes .
https://tos.mx/OJGiDuU
I have a theory why its so good and it fits in line with my thinking. - There is a lot which can be improve but its uncanny how such ATR volatility reflects market structure even in a simple study like this

Can you explain how you're using the new version?

 

[mc01439]

I love this study on daily so much. This is latest version . There is a lot of stuff to add and build on but as it is very very good for daily trend changes .
https://tos.mx/OJGiDuU
I have a theory why its so good and it fits in line with my thinking. - There is a lot which can be improve but its uncanny how such ATR volatility reflects market structure even in a simple study like this

@skynetgen - What is your theory?

 

[skynetgen]

@skynetgen - What is your theory?

Ill try to summarize:
1) Market structure is this: 1) zones of consolidation (sqz triangles, expanding triangles and boxes) 2) shakeouts 3) Trends
2) We want to catch trends while avoiding 1) and 2)
3) ATR volatility character change is basically a proxy indicator for a transition from consolidation to shakeout and/or trend

Goal is to build something more accurate, but this one is very very good as starting point

 

[markos]

Ill try to summarize:
1) Market structure is this: 1) zones of consolidation (sqz triangles, expanding triangles and boxes) 2) shakeouts 3) Trends
2) We want to catch trends while avoiding 1) and 2)
3) ATR volatility character change is basically a proxy indicator for a transition from consolidation to shakeout and/or trend

Goal is to build something more accurate, but this one is very very good as starting point

@skynetgen curious, what is your take on the 2 points below. Thanks.
1. Please go into a little detail on how you use the Cloud between the bands.
2. What does this show that Keltner Channels do not?

 

[skynetgen]

@skynetgen curious, what is your take on the 2 points below. Thanks.
1. Please go into a little detail on how you use the Cloud between the bands.
2. What does this show that Keltner Channels do not?

1) I dont use cloud - removed
2) it combines HHLL over period . I mean this with coloration and fixes I added is a different signal than Keltner. Keltner just gives you bands. This gives you signal when character of volatility changes. I added this to my main daily chart and signal it gives is amazing accuracy ( I use other things too, but for main trend direction this is now my main thing)

p.s. - Only testing it for daily. I use different approach for different intraday timeframe as price action there behave differently ( gaps , time of day etc ). - It might work there I dunno - not tested yet

 

[skynetgen]

So closing the swing I tested today. I ran scan on monday morning and chose 3 names : FDP, ULTA, TOT. I entered them in AM
I should have chosen more short names but whatever (maybe even makes for better test) :

FDP closed today near target for nice profit .
TOT closed on alert on crossing under trailstop on Tuesday (minor loss)
ULTA closed this morning on reversing below yest close ( and market -well you seen the market). good profit .

Will work more on analysis this weekend but so far pretty promising

 

[BenTen]

@skynetgen I'm really enjoying this indicator on the daily and hourly as well. Needs more testing but so far so good. I look forward to reading your analysis.

 

[J007RMC]

I really like this indicator so simple and clean on my daily chart.. Ive added a few things to the chart the advanced mm, volume reversal and Demark support and resistance as well the magic fib. Very excited to see where it goes from here,

 

[skynetgen]

Well I added it to every timeframe except weekly and monthly and went through my week analysis (all trades and setups done during the week). Its effing amazing. Will be using it in trades next week as core of my setup. The only thing it is a bit laggy with new trend setups on 30m for intraday plays. So when I see a gray bar on 30m and everything else is good (daily/5m) its good enough for entry

 

[jacqshen]

@skynetgen Thank you!!

 

[skynetgen]

So I think I found a perfect MTF compliment for this. This is based on hguru CCIATRMTF cloud (fixed a few bugs and simplified a bit)
using 15min for 5min and 4h for 30m

https://tos.mx/T8ikSO8