Vervoort Heiken-Ashi LongTerm Candlestick Oscillator

The Vervoort LongTerm Heiken-Ashi Candlestick Oscillator [LazyBear] indicator provides a specialized trend-following framework that identifies long-term market regimes by analyzing smoothed Heikin-Ashi price action.

Usage

The Usage section describes how the script can be used to identify trend transitions and manage positions. The indicator outputs a histogram with three distinct levels: 1, 0, and -1. These values represent specific market conditions:

• Bullish Regime (1): Indicated by green bars, this suggests an active long position or a strong upward trend.
• Neutral Regime (0): Indicated by blue bars, this suggests no active position or a period of trend exhaustion/consolidation.
• Bearish Regime (-1): Indicated by red bars, this suggests an active short position or a strong downward trend.

Trading Signals:

• Long Entry / Short Exit: Look for the oscillator rising from -1 or 0 to 1.
• Long Exit: Look for the oscillator falling from 1 to 0 or -1.
• Short Entry: Look for the oscillator falling from 1 or 0 to -1.

The tool can be toggled to Overlay Mode in the settings, allowing the signals to color the chart bars directly rather than appearing in a separate pane.

Details

The HACOLT (Heikin Ashi Candles Oscillator Long Term) was designed by Sylvain Vervoort as an evolution of the standard HACO indicator, specifically optimized for longer timeframes and trend stability.

The calculation relies on several layers of smoothing:

1. Heikin-Ashi Construction: It generates synthetic Heikin-Ashi open and close values to filter out price noise.
2. Triple Exponential Moving Average (TEMA): The script uses TEMA to smooth the Heikin-Ashi data and the HL2 (Median Price), reducing lag while maintaining responsiveness to significant price shifts.
3. Zero-Lag Logic: It incorporates a "Zero-Lag" technique by calculating the difference between the TEMA and a TEMA of that TEMA.
4. Trend Logic: It evaluates "keep" conditions based on candle size, candle relationships (higher highs/lower lows), and the position of smoothed price relative to an EMA to determine if a trend is persisting or if it has entered a neutral state.

Settings

• TEMA Period: (Default: 55) Sets the lookback period for the Triple Exponential Moving Average used in the core smoothing calculations.
• EMA Period: (Default: 60) Determines the length of the EMA used for the long-term sell signal filter.
• Candle size factor: (Default: 1.1) A multiplier used to determine if a candle is considered "short" based on its range, affecting the trend-holding logic.
• Overlay Mode: When enabled, the indicator colors the candles on the main chart instead of displaying a histogram in a separate pane.

FAQ

How do I interpret the blue bars in the HACOLT? Blue bars represent a neutral state (0). This typically occurs when a long trend has lost momentum or when price falls below the long-term EMA filter, suggesting it is safer to be out of the market.

What is the difference between this and the standard HACO? The HACOLT is specifically "Long Term." It includes more aggressive smoothing and an additional EMA filter (typically 60 periods) to ensure that signals align with the broader market direction rather than catching minor fluctuations.

How can I access the Vervoort LongTerm Heiken-Ashi Candlestick Oscillator [LazyBear]? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.