Combined EMA, SMMA, and 60-Day Cycle Indicator V2

The Combined EMA, SMMA, and 60-Day Cycle Indicator V2 tool integrates multi-timeframe moving averages and cyclic price extremes to provide a comprehensive trend visualization and signal generation system.

Usage

The tool is designed to help traders identify the prevailing market trend through color-coded clouds and actionable buy/sell signals based on price action relative to historical cycles.

• Trend Visualization: Use the three distinct clouds to determine market sentiment. The 200/400 EMA cloud represents long-term bias, the 55/89 EMA cloud represents medium-term bias, and the 21/9 SMMA cloud represents short-term momentum.
• Cycle Extremes: The indicator plots horizontal lines representing the highest and lowest prices over a user-defined period (default 60 days). These serve as dynamic support and resistance levels.
• Buy Signals: A "BUY" label appears when price crosses above the cycle low while the long-term and medium-term EMAs are in a bullish alignment (200 > 400 and 55 > 89).
• Sell Signals: A "SELL" label appears when price crosses below the cycle high while the long-term and medium-term EMAs are in a bearish alignment (200 < 400 and 55 < 89).

Details

This script utilizes three layers of trend analysis:

1. Exponential Moving Averages (EMA): These focus on more recent price data to identify primary and secondary trends.
2. Smoothed Moving Averages (SMMA): These provide a more "stable" average by incorporating a longer lookback in its smoothing calculation compared to a standard EMA, reducing noise in short-term trend detection.
3. Cycle Analysis: By calculating the highest and lowest points over a specific lookback, the indicator identifies local exhaustion points. The logic assumes that a reversal from these extremes, supported by a trend filter, indicates a high-probability entry point.

Settings

Moving Average Lengths

• 200 EMA Length: Sets the period for the primary long-term EMA.
• 400 EMA Length: Sets the period for the baseline long-term EMA.
• 55 EMA Length: Sets the period for the primary medium-term EMA.
• 89 EMA Length: Sets the period for the baseline medium-term EMA.
• 21 SMMA Length: Sets the period for the primary short-term SMMA.
• 9 SMMA Length: Sets the period for the baseline short-term SMMA.

Colors and Visuals

• Cloud Colors: Various inputs to customize the transparency and color of the three cloud layers based on whether the shorter average is above or below the longer average.

Cycle Settings

• Cycle Length: Determines the lookback period used to calculate the cycle high and cycle low.

FAQ

How do I interpret the different clouds?

The clouds indicate trend strength and direction. Green clouds generally represent bullish conditions, while red or orange clouds indicate bearish or corrective conditions. When all three clouds align in color, it suggests a strong trending environment.

Can I change the cycle period?

Yes, the "Cycle Length" setting allows you to adjust the lookback for high and low levels. While defaulted to approximately 60 days (62 bars), you can shorten this for more frequent signals or lengthen it for major swing points.

How do I access Combined EMA, SMMA, and 60-Day Cycle Indicator V2?

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