TBCRI - Trend Bar Color Reversal Indicator

The TBCRI - Trend Bar Color Reversal Indicator tool provides a visual classification of market trends by coloring chart bars based on normalized price action relative to a historical range.

Usage

The Usage section focuses on the three-phase color system used to identify the current market state. By analyzing the position of the price within a normalized range, the indicator highlights potential trend continuations and reversals:

• Green Bars: Indicate a strong uptrend where the normalized close is significantly high relative to its recent range.
• Red Bars: Indicate a strong downtrend where the normalized close is significantly low relative to its recent range.
• Blue Bars (Neutral): Indicate a "don't care" or transition phase where the price does not meet the threshold for a strong directional bias.

Traders can use these color changes to identify entry points when the bars switch from neutral to green/red, or as exit signals when a trend color reverts to neutral.

Details

The script operates by calculating the Simple Moving Average (SMA) and Standard Deviation of the closing price over a user-defined length. It then calculates a Z-score (normalized close). To determine the trend state, it compares this normalized value against the highest and lowest values found within the same period.

A trend is triggered when the current normalized value exceeds half of the historical peak or trough within the lookback window. This method ensures that the trend detection is adaptive to the volatility of the specific asset being analyzed.

Settings

• Length: Determines the lookback period used for the Simple Moving Average, Variance, and range calculations. A higher length results in smoother trend detection with less noise, while a shorter length makes the indicator more responsive to recent price changes.

FAQ

How do I use the TBCRI alerts?

The indicator includes built-in alerts that trigger when an uptrend starts, a downtrend starts, or when a trend ends (returning to neutral). You can configure these in the TradingView Alert menu by selecting the TBCRI script.

What timeframe is best for this indicator?

While the indicator is versatile, it is typically used on higher timeframes (1H, 4H, Daily) to filter out market noise, though the "Length" setting can be adjusted to suit scalping or day trading strategies.

How can I access TBCRI?

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