Moving Average Cycles

The Moving Average Cycles indicator identifies and analyzes bullish and bearish market cycles by measuring price movement relative to a specific moving average. It provides traders with statistical insights into trend duration and price extension to help gauge market momentum and potential reversal points.

Usage

The Usage section describes how the script can be used to monitor trend transitions and historical performance.

• Cycle Identification: Bullish cycles are represented by green histograms, while bearish cycles are represented by red histograms. These show the number of candles price has remained on one side of the moving average.
• Momentum Analysis: The indicator includes a secondary histogram showing the maximum percentage distance price has moved from the crossover point, helping traders identify overextended trends.
• Statistical Benchmarking: Use the on-screen table to compare the current cycle's length and distance against historical averages and all-time maximums. This helps determine if a trend is mature or likely to continue.

Details

The Moving Average Cycles tool calculates price positioning against a Moving Average (MA) that can be set to a different timeframe than the current chart (e.g., viewing Daily MA cycles on a 1-hour chart).

The script supports two distinct logic modes:

• Sharp: A cycle change is triggered immediately upon price crossing the MA.
• Smoothed: Requires a user-defined number of consecutive candles to close on the opposite side of the MA before confirming a cycle change. This filter helps reduce noise and "whipsaws" during sideways market conditions.

The indicator tracks several metrics throughout the duration of a cycle, including the peak/trough price and the price at the moment of the initial crossover to calculate the percentage distance accurately.

Settings

• MA Period: Sets the lookback period for the Simple Moving Average.
• MA Resolution: Determines the timeframe used for the MA calculation (Daily, Weekly, Monthly).
• Text Size: Adjusts the size of the text within the metrics table.
• Cycle Mode: Chooses between "Sharp" (immediate crossover) and "Smoothed" (requires multiple candles for confirmation).
• Smoothed Cycle Candles: Defines the number of candles required to confirm a new cycle when using Smoothed mode.

FAQ

How do I interpret the percentage distance metrics? The percentage distance measures how far price has moved from the MA since the cycle began. Comparing the "Current Max % Dist" to the "Avg Bull/Bear Cycle Dist" in the table can indicate if the current move is reaching historical exhaustion levels.

Can I use this on any timeframe? Yes, the indicator is compatible with all timeframes, though the MA Resolution setting allows you to track higher-timeframe cycles on lower-timeframe charts.

How do I access the Moving Average Cycles indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.