Custom Indicator Clearly Shows If Bulls or Bears are in Control!

The CM_TotalConsecutive_Up_Down_V2 indicator tracks and visualizes the momentum of market trends by calculating consecutive price closes relative to historical reference points to identify whether bulls or bears are in control. It provides a lag-free visual representation of trend strength across stocks, forex, and futures on any timeframe.

Usage

The Usage section describes how the script can be used to gauge trend exhaustion or continuation. Users can monitor the histogram to see the count of consecutive bars closing above or below a specific threshold.

• Trend Strength Identification: A rising green histogram indicates a sustained bullish trend where the current close is consistently higher than the previous reference point. Conversely, a rising red histogram indicates bearish dominance.
• Reversal Spotting: By using the horizontal line or standard deviation settings, traders can identify when a streak of consecutive bars has reached an extreme, potentially signaling an upcoming trend reversal or mean reversion.
• Midpoint vs. Close: Traders can toggle between using the previous bar's midpoint (HL2) or the previous bar's close as the benchmark. Using the midpoint often filters out minor price fluctuations, focusing on whether the price is maintaining strength relative to the previous range.

Details

The script calculates momentum by measuring "bars since" a specific condition was not met. There are two primary logic modes:

1. Midpoint Logic: Compares the current close to the midpoint (High + Low / 2) of the previous bar. This method highlights price action that is significantly bullish or bearish relative to the immediate previous volatility.
2. Previous Close Logic: Compares the current close directly to the previous close. This is a traditional measure of consecutive momentum.

The indicator further enhances these calculations by offering optional overlays such as Moving Averages of the consecutive counts, Standard Deviation bands to detect statistical outliers in trend duration, and Highest High lookbacks to show historical trend peaks.

Settings

• Use Midpoint: When checked, the script compares the current close to the previous bar's midpoint. When unchecked, it compares the current close to the previous close.
• Highest Bar Look Back Period (Midpoint/Close): Enables a line showing the maximum number of consecutive bars reached within the specified lookback period.
• Standard Dev (Midpoint/Close): Enables volatility bands based on the standard deviation of the consecutive bar counts.
• Moving Average (Midpoint/Close): Enables a smoothing line to show the average length of recent trends.
• Horizontal Line: Sets a static threshold on the histogram to signal when a trend has reached a specific number of consecutive bars.
• Highest Bar Look Back Period: Defines the window of bars used to calculate the historical peak trend length.
• Standard Dev Length: Sets the lookback period for the standard deviation calculation.
• Standard Dev Multiple: Adjusts the sensitivity (multiplier) of the standard deviation bands.
• Moving Average Length: Sets the lookback period for the smoothing of the consecutive counts.

FAQ

How do I interpret the green and red histograms? The green histogram counts how many consecutive bars have closed "up" (above the midpoint or previous close), while the red histogram counts how many consecutive bars have closed "down." The higher the bar, the longer the current streak.

What is the benefit of using the Midpoint setting? Using the midpoint (HL2) of the previous bar acts as a filter. It requires the price to close above the median of the previous bar's range, which can be a more robust sign of strength than simply closing higher than the previous close.

How can I get access to the CM_TotalConsecutive_Up_Down_V2 indicator? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.