Relative Andean Scalping

The Relative Andean Scalping indicator is a specialized scalping tool that combines volatility-based signal generation with bandwidth filtering to identify high-probability entry points in various market conditions. It integrates the logic of the Andean Oscillator for trend identification and the Relative Bandwidth Filter to exclude low-volatility price action.

Usage

The indicator generates buy and sell signals based on the interaction between three main components: the Bull line, the Bear line, and a Signal line.

• Long Signals: Occur when the Bull line crosses over the Signal line while remaining above the Bear line, provided the Relative Bandwidth is below the reference middle line (indicating a compression phase).
• Short Signals: Occur when the Bear line crosses over the Signal line while remaining above the Bull line, provided the Relative Bandwidth is below the reference middle line.

The script includes a built-in filter that prevents signal clutter by checking for preceding signals within a 5-bar window. This ensures that only the initial breakout or trend shift is highlighted for the user.

Details

The script utilizes two primary quantitative concepts:

1. Andean Oscillator: Developed by Alex Grover, this component calculates the "Bull" and "Bear" components based on price displacement relative to an exponential moving average logic. It aims to visualize the strength of buying and selling pressure.
2. Relative Bandwidth Filter: Based on concepts by HeWhoMustNotBeNamed, this filter normalizes the width of price bands (Bollinger, Keltner, or Donchian) by the Average True Range (ATR). By default, the script looks for signals when the bandwidth is below the mean (middle band), suggesting a period of low relative volatility that often precedes a significant move.

Settings

Andean Oscillator Settings

• Andean Length: Sets the lookback period for the Bull and Bear line calculations.
• Andean Signal Length: Determines the smoothing period for the Signal line (EMA).

Relative Bandwidth Filter Bands

• Bands Type: Choose between Bollinger Bands (BB), Keltner Channels (KC), or Donchian Channels (DC).
• Bands Source: The price source used for band calculations.
• Bands Type (Moving Average): The calculation method for the bands (e.g., Linreg, SMA, EMA).
• Bands Length: The lookback period for the selected band type.
• Bands Multiplier: The standard deviation or ATR multiplier for the band width.
• Bands Use True Range (KC): Toggles the use of True Range for Keltner Channels.
• Sticky Lines: Enables or disables the "sticky" calculation mode for bands.

Relative Bandwidth Filter ATR

• ATR Length: Sets the period for the ATR used to normalize the bandwidth.

Relative Bandwidth Filter BBands

• BBands Type: Calculation method for the bandwidth's internal Bollinger Bands.
• BBands Length: The lookback period for the bandwidth reference lines.
• BBands Multiplier: The multiplier for the bandwidth reference bands.

Relative Bandwidth Filter General

• Desired Condition: Determines if signals are generated during "Higher Bandwidth" or "Lower Bandwidth" periods.
• Reference Band: Selects which band (Upper, Middle, or Lower) acts as the threshold for the volatility filter.

FAQ

How do I access Relative Andean Scalping?

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

What is the best timeframe for this indicator?

While designed for scalping, the indicator is experimental. Users typically find the best results on lower timeframes like 1m, 5m, or 15m, depending on the volatility of the asset.

Can I change the signal sensitivity?

Yes, you can adjust the Andean Length and Andean Signal Length settings. Increasing these values will result in fewer, more lagged signals, while decreasing them will produce faster, more frequent signals.