Two EMA Cross+ Indicator

The Two EMA Cross+ indicator provides a trend-following framework that utilizes dual exponential moving averages and price action confirmation to identify high-probability crossover signals.

Usage

The Usage section describes how the script can be used to identify market transitions and trend strength. The indicator plots two lines: a Fast EMA (default 9) and a Slow EMA (default 30).

• Bullish Crossover: Occurs when the Fast EMA crosses above the Slow EMA. This is signaled by a green flag labeled "Bullish Signal."
• Bearish Crossover: Occurs when the Fast EMA crosses below the Slow EMA. This is signaled by a red flag labeled "Bearish Signal."
• Strong Bullish Signal: Triggered when a bullish crossover occurs while price is trading above the Slow EMA (acting as support). If the filter is enabled, this also requires market volatility (Bollinger Band width) to be above its moving average.
• Strong Bearish Signal: Triggered when a bearish crossover occurs while price is trading below the Slow EMA (acting as resistance). If the filter is enabled, this also requires market volatility to be above its moving average.

Traders can utilize these signals to determine entry points, with "Strong" signals suggesting higher momentum or better trend alignment.

Details

The script is built upon the Exponential Moving Average (EMA) formula, which prioritizes recent price data to reduce lag compared to a Simple Moving Average (SMA). The core logic evaluates the interaction between the Fast EMA, the Slow EMA, and the current price candle.

To refine signal quality, the tool includes a volatility filter based on Bollinger Band width. When the "Filter" setting is active, "Strong" signals are only validated if the current price spread (volatility) exceeds the average spread of the last 10 periods (Length of Filter). This helps in avoiding signals during low-liquidity or sideways market conditions.

Settings

• Length of fast EMA: Sets the period for the faster, more reactive moving average.
• Source of fast EMA: Determines the price data (e.g., Close, Open, High, Low) used for the fast EMA calculation.
• Offset of fast EMA: Shifts the fast EMA plot forward or backward in time.
• Length of slow EMA: Sets the period for the slower, trend-defining moving average.
• Source of slow EMA: Determines the price data used for the slow EMA calculation.
• Offset of slow EMA: Shifts the slow EMA plot forward or backward in time.
• Length of Filter: Defines the lookback period for the Bollinger Band width moving average used in signal confirmation.
• Filter: A toggle to enable or disable volatility-based confirmation for "Strong" signals.

FAQ

How do the "Strong" signals differ from regular signals? Regular signals trigger on any EMA crossover. "Strong" signals require the crossover to happen in alignment with price positioning (price above/below the Slow EMA) and optionally require volatility to be above the average level.

Can I change the sensitivity of the signals? Yes, by shortening the lengths of the Fast and Slow EMAs, the indicator will become more sensitive to price changes. Lengthening them will result in fewer, more lagged signals that focus on long-term trends.

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