PSAR + Volatility Filter Buy Alerts

The PSAR + Volatility Filter Buy Alerts indicator provides optimized entry signals by combining the classic Parabolic SAR trend-following logic with a custom volatility filter based on spread ratios. It is designed to filter out excessive volatility and generate high-probability buy signals suitable for automated trading bots or manual DCA strategies.

Usage

The indicator is primarily used to identify trend reversals from bearish to bullish while ensuring the price action meets specific volatility criteria. A buy signal is generated when the Parabolic SAR switches from falling to rising, provided the current "Open Spread" is within a defined threshold relative to the previous trend's spread.

Examples of usage include:

• DCA Bot Integration: Connect the alert output to 3commas or similar platforms to automate long entries.
• Trend Confirmation: Use the PSAR crosses as a baseline for trend direction, using the volatility filter to avoid "fakeouts" during highly erratic market moves.
• Manual Trading: Look for the green label icons below the bars as confirmation of a new bullish regime supported by the spread ratio logic.

Details

The script utilizes the standard ta.sar() function to determine trend direction. The unique aspect of this tool is the "Open Spread Ratio" logic.

The "Open Spread" is calculated as the difference between the last falling SAR value and the initial rising SAR value. By comparing the current spread to the previous one, the script determines if the current trend initiation is too volatile or within acceptable parameters defined by the user.

Note on Repainting: This indicator uses logic that can involve repainting by design. It is recommended to use the "Once per bar" alert style to ensure signals are confirmed upon the close of the candle.

Settings

• PSAR Start: The initial value for the Parabolic SAR acceleration factor.
• PSAR Increment: The step value by which the acceleration factor increases each time the price makes a new high (or low).
• PSAR Maximum: The maximum cap for the acceleration factor.
• Open Spread Ratio Threshold: A multiplier (0.1 to 1.0) used to filter signals. It compares the current trend spread to the previous trend spread; a lower value makes the filter stricter, requiring less volatility for a signal to trigger.

FAQ

How do I use this with a 3commas DCA bot?

You can set up a custom signal in 3commas and copy the provided webhook URL into the TradingView alert settings. Use the "Buy [PSAR]" alert condition to trigger your bot's entry.

Why did a signal disappear after it appeared?

The indicator is designed with a specific logic that may repaint during the formation of a bar. To mitigate this, ensure your alerts are set to "Once per bar" or "Once per bar close."

How can I access the PSAR + Volatility Filter Buy Alerts?

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