TMA Overlay

The TMA Overlay indicator provides a comprehensive trend-following framework by combining smoothed moving averages with visual price action patterns like engulfing candles and three-line strikes.

Usage

The Usage section describes how the script can be used to identify trend direction and potential reversal points. Users can monitor the interaction between price and several Smoothed Moving Averages (SMMA) to gauge market momentum.

• Trend Identification: The indicator plots four SMMA lines (21, 50, 100, and 200 periods). When price is above these averages and the "Trend Fill" is green, the market is considered bullish. Conversely, price below the averages with a red fill indicates a bearish environment.
• Price Action Signals: The script highlights specific candlestick formations. A "3 Line Strike" occurs after three consecutive candles of the same direction are engulfed by a large fourth candle, suggesting a trend continuation or sharp reversal. Engulfing candles are also marked to identify immediate shifts in momentum.
• Session Trading: Traders can define specific analysis and trading windows (e.g., CME Open). The chart background highlights these periods, allowing users to focus on price action during high-liquidity sessions.

Details

The TMA Overlay utilizes Smoothed Moving Averages (SMMA), which provide a balance between the responsiveness of an EMA and the stability of an SMA. The "Trend Fill" logic compares a fast 2-period EMA against the 200-period SMMA to provide a macro trend visualization.

The candle pattern logic is strictly defined:

• 3 Line Strike: Requires three consecutive bullish/bearish candles followed by a single candle that opens within or beyond the third candle and closes past the first candle's open.
• Engulfing Candles: Identified when the current candle's body completely overlaps the previous candle's body.

Settings

• Smoothed MA Inputs: Toggle visibility for the 100-period SMMA and the trend-based background fill between the fast EMA and 200 SMMA.
• 3 Line Strike: Enable or disable bullish and bearish 3-line strike triangle shapes.
• Big Ass Candles: Enable or disable bullish and bearish engulfing candle markers.
• Trade Session:
  • Show Trade Session: Toggles the background highlighting for specific times.
  • Timezone: Sets the reference timezone for session calculations.
  • Start/End Hours & Minutes: Defines the "Analysis" and "Session" time ranges.
  • Days of the Week: Select which days the session highlighting should appear.

FAQ

How do I interpret the colored background fill? The fill represents the relationship between short-term price action (2-period EMA) and the long-term trend (200-period SMMA). A green fill suggests a bullish macro trend, while a red fill suggests a bearish macro trend.

What is the difference between the 3s-Bull and the tiny triangle? The "3s-Bull/Bear" labels represent the Three Line Strike pattern, which involves four candles. The tiny triangles represent standard Engulfing patterns involving two candles.

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