Market Cipher B Free version with Buy and sell

The Market Cipher B Free version with Buy and sell indicator provides a comprehensive momentum-based oscillator that identifies overbought and oversold market conditions through WaveTrend crossovers and visual area gradients.

Usage

The Usage section describes how the script can be used to identify potential market reversals and trend shifts. The indicator consists of two primary oscillator lines (wt1 and wt2) and a histogram-like area representing the difference between them.

• Crossover Signals: When the fast line (wt1) crosses the slow line (wt2), a circle is plotted on the oscillator. A green circle typically indicates a bullish crossover, while a red circle indicates a bearish crossunder.
• Overbought/Oversold Levels: The indicator uses fixed horizontal levels (60, 53, -53, -60) to define extreme market conditions. Readings above 53/60 suggest the asset is overbought, while readings below -53/-60 suggest it is oversold.
• Momentum Waves: The area filled between the lines helps traders visualize the strength of current momentum. A yellow area appearing between the lines highlights the divergence/convergence between the two wave calculations.

Details

The indicator is built upon the WaveTrend algorithm originally developed by falconCoin and later popularized by LazyBear. It calculates a customized version of a channel index by processing the average price (HLC3) through multiple layers of Exponential Moving Averages (EMA).

The core calculation involves:

1. ESA: An EMA of the HLC3 price.
2. Mean Deviation: An EMA of the absolute difference between the price and the ESA.
3. CI (Channel Index): Calculated as (Price - ESA) / (0.015 * Mean Deviation).
4. TCI (WaveTrend): An EMA of the CI, which serves as the primary oscillator line (wt1).
5. Signal Line: A 4-period Simple Moving Average of wt1 (wt2).

Settings

• Channel Length: Sets the lookback period for the initial EMA and mean deviation calculations.
• Average Length: Determines the smoothing period for the WaveTrend indicator line.
• Over Bought Level 1: The primary upper threshold for identifying overbought conditions (default 60).
• Over Bought Level 2: The secondary upper threshold for identifying overbought conditions (default 53).
• Over Sold Level 1: The primary lower threshold for identifying oversold conditions (default -60).
• Over Sold Level 2: The secondary lower threshold for identifying oversold conditions (default -53).

FAQ

What are the primary signals provided by this indicator? The primary signals are the bullish and bearish crossovers of the wt1 and wt2 lines, visually represented by colored circles and supported by overbought/oversold levels.

How does the WaveTrend calculation differ from a standard RSI? Unlike the Relative Strength Index (RSI), WaveTrend uses EMAs of price deviations to create a more responsive momentum oscillator that fluctuates around a zero midline with specific volatility-adjusted boundaries.

How can I access the Market Cipher B Free version with Buy and sell? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.