Persistency with Moving Averages

The Persistency with Moving Averages tool tracks the durability of trends by measuring how long price remains on one side of key moving averages. It provides traders with quantitative data on trend resilience, helping to distinguish between temporary momentum and sustained market moves.

Usage

The Usage section describes how the script can be used to evaluate trend strength and time market entries or exits.

• Trend Identification: The script monitors up to four customizable moving averages. A positive count indicates the price is consistently above the MA (bullish persistency), while a negative count indicates it is below (bearish persistency).
• Decisive Exit Logic: Users can enable a "Decisive Exit" mechanism. Unlike a simple crossover, this feature initiates a "Pending Exit" when price shows initial weakness (e.g., closing below the MA). A final exit signal is only confirmed if the price subsequently breaches the low of the trigger bar. This helps filter out minor fluctuations or "whipsaws."
• Max Persistency: On daily or higher timeframes, the script tracks the historical maximum consecutive bars the price has stayed on one side of a specific MA within a chosen lookback period (1, 3, 5, or 10 years). This provides a benchmark to compare current trend strength against historical extremes.
• Momentum Assessment: A dashboard displays real-time counts, percentage returns since the signal, and a directional header (↑ for upward, ↓ for downward, and → for mixed/sideways momentum).

Details

The script is based on Pradeep Bonde's concept of "Persistency," which posits that stocks maintaining a trend consistently over time have a higher probability of continuation. While the original concept focuses on close-to-close comparisons, this implementation uses Moving Averages (EMA or SMA) as dynamic baselines.

The "Decisive Exit" logic introduces a two-step confirmation process:

1. Pending State: Triggered when the selected price source (Close or High/Low) crosses the MA. The script stores the extreme (low for long, high for short) of that bar.
2. Execution: The exit is executed only if price hits the stored level. If price recovers and crosses back over the MA before the level is hit, the pending exit is cancelled, and the count continues.

Settings

Customization

• Dark Mode: Adjusts the visual theme of the dashboard.
• Show color label column?: Toggles color-coded indicators in the table.
• Show Entry/Exit on chart?: Displays markers at signal locations.
• Show only the latest signal on chart?: Limits plot visibility to the most recent signal.

Decisive Exit

• Use decisive exit for count?: Enables/disables the confirmation logic for trend changes.
• Use decisive exit for count? (Price Type): Determines if the Close or High/Low is used to trigger the pending exit state.
• Show pending exit column?: Adds a status indicator to the table showing if an exit is currently pending.

Table & Lookback

• Table Size/Position: Standard adjustments for UI placement and scale.
• Show Returns (%) Column?: Displays price performance since the current trend count began.
• Select Lookback Period (Years): Sets the historical range for calculating "Max Persistency."
• Show Max Persistency Column?: Toggles the display of historical trend records.

Moving Averages

• MA #1 to #4: Toggle switches to enable or disable individual averages.
• MA Type: Selection between Simple Moving Average (SMA) and Exponential Moving Average (EMA).
• MA Length: The period for the calculation (e.g., 10, 21, 50, 200).
• MA Color: Individual color selection for each MA line.

FAQ

How do I interpret a "Max Persistency" value? If the Max Persistency for a 50-day EMA is 100, it means that at some point in your selected lookback period, the price stayed above that EMA for 100 consecutive days. This helps you understand if a current count of 80 is approaching historical exhaustion or has more room to run.

What is the difference between a simple crossover and a Decisive Exit? A simple crossover triggers a signal the moment the price crosses the MA. A Decisive Exit requires the price to cross the MA and then break the extreme of the crossing bar, providing a filter against market noise.

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