On Chart Anticipated Moving Average Crossover Indicator

The On Chart Anticipated Moving Average Crossover indicator identifies the specific price levels required for a moving average crossover to occur on the next bar, effectively removing one bar of lag from traditional crossover signals.

Usage

The Usage section describes how the script can be used, examples should be provided in this section. This tool functions by plotting six user-defined Simple Moving Averages (SMAs) alongside dynamic price levels that represent the "intersection" point for the next close.

• Trend Identification: Users can monitor six different SMA lengths simultaneously to determine the primary market trend.
• Predictive Levels: The indicator plots five price levels relative to a "Test SMA." If the current price reaches these plotted levels, it indicates that the Test SMA will cross the corresponding SMA on the next bar close.
• Signal Execution: Arrows appear on the chart when an anticipated crossover is detected. For example, if the short-term SMA is projected to cross above a long-term SMA based on current price action, an "Anticipated Cross Up" arrow is displayed.
• Alerting: Traders can set alerts for specific SMA pairs to be notified before a standard crossover is printed on the chart.

Details

The script is based on the concepts developed by Dimitris Tsokakis. Standard moving averages are lagging indicators because they require a completed bar to calculate a new value. This script mathematically solves for the price ($P$) required at the next close to make $SMA(x) = SMA(y)$.

By calculating this value in advance, the script provides a real-time look at how close the market is to a trend shift. The implementation includes a "Lower Cutoff Factor" to prevent the anticipated levels from skewing the chart scale during extreme volatility or when calculations result in outlier values.

Settings

• Price Source: Determines the price data used for the SMA calculations (default is Close).
• Test SMA [ 1 - 6 ]: Selects which of the six SMAs will be used as the primary "Base" for calculating the anticipated crossover levels against the other five.
• SMA 1-6 Length: Sets the lookback period for each of the six Simple Moving Averages.
• SMA 1-6 Color: Customizes the visual color for each SMA line and its associated anticipated price level.
• Lower Cutoff Factor: A numerical filter used to prevent the plotted levels from dropping too far below the current price, maintaining chart readability.

FAQ

How do I interpret the arrows on the chart? The arrows signal an "anticipated" crossover. An up arrow indicates the price has reached the level necessary for the selected Test SMA to cross above another SMA on the next close.

Why are there multiple price levels plotted on the chart? These levels show exactly where the price needs to close for the Test SMA to intersect with each of the other five defined moving averages.

How can I access this indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.