Tabajara + 3 MA + Vwap + Volume Confirmation + Background Color

The Tabajara + 3 MA + Vwap + Volume Confirmation + Background Color indicator provides a comprehensive trend-following toolkit designed to identify high-probability entries based on moving average alignment and volume confirmation. It integrates the Tabajara rule—a popular trend-following methodology—with multiple moving averages and volume filters to help traders visualize the market trend and institutional strength.

Usage

The tool is primarily used for trend-following strategies, particularly effective in liquid markets like futures and major forex pairs.

• Trend Identification: The indicator colors the background and moving averages based on their slope. Green indicates an uptrend (MA rising), and red indicates a downtrend (MA falling).
• Bar Coloring: Candles are painted green or red when the price action confirms the trend. A green candle appears when price closes above a rising Tabajara MA with sufficient volume. Conversely, a red candle appears when price closes below a falling Tabajara MA with sufficient volume.
• Volume Confirmation: The script includes a volume SMA filter. Signals are only validated when the current volume exceeds the 21-period volume average, ensuring the trend has participation.
• Entry Signals: The indicator plots "BUY" and "SELL" shapes on the chart when specific confluence criteria are met, including moving average alignment (SMA/EMA), price crossover, and volume expansion.

Details

The script is based on the Tabajara Rule, a system focused on trading only in the direction of the established trend. It utilizes a combination of:

• Tabajara MA: A core trend indicator (typically a 21-period VWMA or SMA).
• EMA Ribbon: Uses a 9-period and 21-period EMA to detect short and medium-term momentum.
• Long SMA: A 200-period SMA to determine the primary market bias.
• VWAP: Used as a benchmark for intraday price relative to volume.
• Wick Analysis: The script filters out "long wick" candles to ensure the signal candles represent strong directional conviction rather than rejection.

Settings

Primary Lengths

• Long SMA: Sets the length for the long-term trend SMA (default 200).
• Tabajara: Sets the period for the core Tabajara moving average (default 21).
• Long EMA: Sets the length for the medium-term EMA (default 21).
• EMA: Sets the length for the short-term EMA (default 9).
• SMA Volume: Sets the length for the volume moving average used for confirmation (default 21).

Sources

• Moving Average Sources: Allows users to select the calculation source (Close, Open, High, Low, etc.) for each moving average.

FAQ

How do I interpret the background colors?

The background color is determined by the slope of the 21-period Long EMA. A green background suggests a bullish bias, while a red background suggests a bearish bias.

What does it mean when a candle is colored?

A colored candle indicates that the Tabajara rule and volume confirmation are synchronized. A green bar means price is above a rising MA with high volume; a red bar means price is below a falling MA with high volume.

How do I access this indicator?

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