SwingArm ATR Trend Indicator

The SwingArm ATR Trend Indicator indicator provides visual confirmation of trend changes using color-coded trailing stops and Fibonacci-based entry zones to assist traders in identifying market direction and potential retracement entries.

Usage

The Usage section describes how the script can be used to identify market trends and potential entry points.

• Trend Identification: The primary component is the color-coded trailing stop line. When the price is above the line, it turns green, signaling a bullish trend. When the price falls below the line, it turns red, signaling a bearish trend.
• Fibonacci Retracement Zones: The indicator plots three Fibonacci levels (61.8%, 78.6%, and 88.6%) between the current trend's extreme price point and the trailing stop. These levels create shaded "entry zones" that highlight where price pullbacks may occur during a sustained trend.
• Pullback Signals: Small blue triangles appear when the price retraces into the Fibonacci zones. These signals suggest that the price is testing deep retracement levels while the primary trend remains intact.

Details

The script is a refactored version of the Blackflag FTS, based on the work of Jose Azcarate. It utilizes a Wilder’s Moving Average (WildMA) applied to a True Range calculation to determine the trailing stop distance.

A unique aspect of the script is the "modified" trail type, which caps the high-low range at 1.5 times the Simple Moving Average of the range to filter out extreme volatility. The indicator also tracks an "Extremum" value—the highest price reached during an uptrend or the lowest reached during a downtrend—which serves as the anchor for the Fibonacci levels. This allows the entry zones to dynamically expand or contract as the trend reaches new highs or lows.

Settings

• Trailtype: Selects between "modified" (uses a capped range calculation) and "unmodified" (standard ATR-based calculation).
• ATR Period: Defines the lookback period used for the Average True Range and Wilder's Moving Average calculations.
• ATR Factor: Sets the multiplier applied to the ATR to determine the distance of the trailing stop from the price.
• Show Fib Entries?: Toggles the visibility of the blue triangle shapes that mark price crosses into Fibonacci retracement levels.

FAQ

What do the red and green colors indicate? The green color indicates a bullish market environment where the price is holding above the trailing stop, while the red color indicates a bearish environment where price is below the stop.

How are the Fibonacci levels calculated? The levels are calculated based on the distance between the "Extremum" (the peak or trough of the current trend) and the trailing stop line, highlighting 61.8%, 78.6%, and 88.6% retracements.

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