ICT index correlated market indicator

The ICT index correlated market indicator tool allows traders to overlay and monitor correlated assets directly on their chart to identify market divergences and institutional entry signals.

Usage

The Usage section describes how to utilize this tool for multi-market analysis. By displaying a secondary correlated asset (such as another equity index or the DXY), traders can apply concepts like SMT (Smart Money Technique) Divergence.

• Divergence Analysis: Use the indicator to compare price action between the S&P 500, Nasdaq, and Dow Jones Industrial Average. If one index makes a lower low while another makes a higher low, it can signal a trend reversal or institutional accumulation.
• Trigger Confirmation: Traders can use price action triggers on one index (e.g., the "hidden entry pattern") to execute trades on a more volatile index like the Nasdaq.
• Custom Correlation: While the tool provides defaults for major indices and forex pairs, users can input any custom ticker symbol to analyze specific correlations relevant to their strategy.

Details

The script functions by utilizing the request.security function to fetch data from a secondary ticker and plotting it as a candle overlay on the existing chart. This implementation allows for a visual comparison of price action structures across different instruments without needing to toggle between multiple tabs. This is particularly useful for identifying Intermarket Divergence, a concept popularized by traders like Linda Raschke and ICT, where lack of confirmation between correlated markets suggests a potential shift in market direction.

Settings

• Main Source: Select from a list of pre-defined correlated assets including S&P500, Nasdaq, Dow Jones IA, DXY, EURUSD, and GBPUSD.
• Use Other Source: Enables the manual entry of a custom ticker symbol.
• Other Source Input: Allows the user to specify any available symbol from the TradingView library for correlation analysis.
• Bull Body: Sets the color for bullish candles of the correlated asset.
• Bear Body: Sets the color for bearish candles of the correlated asset.

FAQ

How do I use this for SMT Divergence?

You can load the Nasdaq on your main chart and use this indicator to display the S&P 500. Compare the swing highs and lows; if the Nasdaq reaches a new high but the S&P 500 fails to do so, it indicates an SMT Divergence.

Can I use this for Forex?

Yes, the indicator includes presets for the US Dollar Index (DXY), EURUSD, and GBPUSD, which are commonly used to find correlations in the currency markets.

How can I access the ICT index correlated market indicator?

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