Sigma 2.0 - Advanced Buy and Sell Signal Indicator

22 Eyl

Overview:

Sigma 2.0 is a sophisticated trading indicator designed to help traders identify potential buy and sell opportunities across various financial markets. By leveraging advanced mathematical calculations and incorporating multiple analytical tools, Sigma 2.0 aims to enhance trading strategies by providing precise entry and exit signals.

Key Features:

Advanced Sigma Calculations:

Utilizes a combination of Exponential Moving Averages (EMAs) and price deviations to calculate the Sigma lines (sigma1 and sigma2).
Detects potential trend reversals through the crossover of these Sigma lines.

Customizable Signal Filtering:

Offers the ability to filter buy and sell signals based on user-defined thresholds.
Helps reduce false signals in volatile markets by setting overbought and oversold levels.

Overbought and Oversold Detection:

Identifies extreme market conditions where price reversals are more likely.
Changes the background color of the chart to visually indicate overbought or oversold states.

Integration of Exponential Moving Averages (EMAs):

Includes EMAs of different lengths (10, 21, 55, 200) to assist in identifying market trends.
EMAs act as dynamic support and resistance levels.

Higher Timeframe Signal Incorporation:

Allows users to include signals from a higher timeframe to align trades with the broader market trend.
Enhances the reliability of signals by considering multiple timeframes.

Custom Alerts:

Provides alert conditions for both buy and sell signals.
Enables traders to receive notifications, ensuring timely decision-making.

How It Works:

Sigma Calculation Methodology:

The indicator calculates an average price (ap) and applies EMAs to derive the Sigma lines.
sigma1 represents the smoothed price deviation, while sigma2 is a moving average of sigma1.
A crossover of sigma1 above sigma2 generates a buy signal, indicating potential upward momentum.
Conversely, a crossover of sigma1 below sigma2 generates a sell signal.
Signal Filtering and Thresholds:

Users can enable filtering to only consider signals when sigma1 is below or above certain thresholds.
This helps in focusing on more significant market movements and reducing noise.

Overbought/Oversold Levels:

The indicator monitors sigma1 to detect when the market is in extreme conditions.
Background color changes provide a quick visual cue for these conditions.

EMA Analysis:

The plotted EMAs help in confirming the trend direction.
They can be used alongside Sigma signals to validate trade entries and exits.

Higher Timeframe Signals:

Incorporates signals from a user-selected higher timeframe.
Helps in aligning trades with the overall market trend, increasing the potential success rate.

How to Use:

Adding the Indicator to Your Chart:

Search for "Sigma 2.0" in the TradingView Indicators menu and add it to your chart.

Configuring the Settings:

Adjust the Sigma configurations (Channel Length, Average Length, Signal Line Length) to suit your trading style.
Set the overbought and oversold levels according to your risk tolerance.
Choose whether to filter signals by thresholds.
Select the higher timeframe for additional signal confirmation.

Interpreting the Signals:

Buy Signals:
Indicated by a green triangle below the price bar.
Occur when sigma1 crosses above sigma2 and other conditions are met.

Sell Signals:
Indicated by a red triangle above the price bar.
Occur when sigma1 crosses below sigma2 and other conditions are met.

Higher Timeframe Signals:
Plotted with lime (buy) and maroon (sell) triangles.
Help confirm signals in the current timeframe.

Utilizing EMAs:

Observe the EMAs to gauge the overall trend.
Consider aligning buy signals when the price is above key EMAs and sell signals when below.

Setting Up Alerts:

Use the built-in alert conditions to receive notifications for buy and sell signals.
Customize alert messages as needed.

Credits:

Original Concept Inspiration:
This indicator is inspired by the WaveTrend oscillator and other momentum-based indicators.
Special thanks to the original authors whose work laid the foundation for this enhanced version.

Disclaimer:

Trading involves significant risk, and past performance is not indicative of future results.
This indicator is a tool to assist in analysis and should not be the sole basis for any trading decision.
Always perform thorough analysis and consider multiple factors before entering a trade.

Note:

Ensure your chart is clean and only includes this indicator when publishing.
The script is open-source and can be modified to fit individual trading strategies.
For any questions or support, feel free to reach out or comment.

24 Eyl

Sürüm Notları

Overview:

Sigma 2.0 is a sophisticated trading indicator designed to help traders identify potential buy and sell opportunities across various financial markets. By leveraging advanced mathematical calculations and incorporating multiple analytical tools, Sigma 2.0 aims to enhance trading strategies by providing precise entry and exit signals.

Key Features:

Advanced Sigma Calculations:

Utilizes a combination of Exponential Moving Averages (EMAs) and price deviations to calculate the Sigma lines (sigma1 and sigma2).
Detects potential trend reversals through the crossover of these Sigma lines.

Customizable Signal Filtering:

Offers the ability to filter buy and sell signals based on user-defined thresholds.
Helps reduce false signals in volatile markets by setting overbought and oversold levels.

Overbought and Oversold Detection:

Identifies extreme market conditions where price reversals are more likely.
Changes the background color of the chart to visually indicate overbought or oversold states.

Integration of Exponential Moving Averages (EMAs):

Includes EMAs of different lengths (10, 21, 55, 200) to assist in identifying market trends.
EMAs act as dynamic support and resistance levels.

Higher Timeframe Signal Incorporation:

Allows users to include signals from a higher timeframe to align trades with the broader market trend.
Enhances the reliability of signals by considering multiple timeframes.

Custom Alerts:

Provides alert conditions for both buy and sell signals.
Enables traders to receive notifications, ensuring timely decision-making.

How It Works:

Sigma Calculation Methodology:

The indicator calculates an average price (ap) and applies EMAs to derive the Sigma lines.
sigma1 represents the smoothed price deviation, while sigma2 is a moving average of sigma1.
A crossover of sigma1 above sigma2 generates a buy signal, indicating potential upward momentum.
Conversely, a crossover of sigma1 below sigma2 generates a sell signal.
Signal Filtering and Thresholds:

Users can enable filtering to only consider signals when sigma1 is below or above certain thresholds.
This helps in focusing on more significant market movements and reducing noise.

Overbought/Oversold Levels:

The indicator monitors sigma1 to detect when the market is in extreme conditions.
Background color changes provide a quick visual cue for these conditions.

EMA Analysis:

The plotted EMAs help in confirming the trend direction.
They can be used alongside Sigma signals to validate trade entries and exits.

Higher Timeframe Signals:

Incorporates signals from a user-selected higher timeframe.
Helps in aligning trades with the overall market trend, increasing the potential success rate.

How to Use:

Adding the Indicator to Your Chart:

Search for "Sigma 2.0" in the TradingView Indicators menu and add it to your chart.

Configuring the Settings:

Adjust the Sigma configurations (Channel Length, Average Length, Signal Line Length) to suit your trading style.
Set the overbought and oversold levels according to your risk tolerance.
Choose whether to filter signals by thresholds.
Select the higher timeframe for additional signal confirmation.

Interpreting the Signals:

Buy Signals:
Indicated by a green triangle below the price bar.
Occur when sigma1 crosses above sigma2 and other conditions are met.

Sell Signals:
Indicated by a red triangle above the price bar.
Occur when sigma1 crosses below sigma2 and other conditions are met.

Higher Timeframe Signals:
Plotted with lime (buy) and maroon (sell) triangles.
Help confirm signals in the current timeframe.

Utilizing EMAs:

Observe the EMAs to gauge the overall trend.
Consider aligning buy signals when the price is above key EMAs and sell signals when below.

Setting Up Alerts:

Use the built-in alert conditions to receive notifications for buy and sell signals.
Customize alert messages as needed.

Credits:

Original Concept Inspiration:
This indicator is inspired by the WaveTrend oscillator and other momentum-based indicators.
Special thanks to the original authors whose work laid the foundation for this enhanced version.

Disclaimer:

Trading involves significant risk, and past performance is not indicative of future results.
This indicator is a tool to assist in analysis and should not be the sole basis for any trading decision.
Always perform thorough analysis and consider multiple factors before entering a trade.

Note:

Ensure your chart is clean and only includes this indicator when publishing.
The script is open-source and can be modified to fit individual trading strategies.
For any questions or support, feel free to reach out or comment.

24 Eyl

Sürüm Notları

Chart updated.

25 Eyl

Sürüm Notları

Note on Recent Improvements to the Sigma 2.0 Indicator

We have made several significant enhancements to the Sigma 2.0 indicator to optimize its performance and usability on TradingView. Below are the details of the updates:

Avoiding Repainting:

The indicator has been adjusted to eliminate the repainting issue when using data from different timeframes.
Now, all signals are confirmed at the close of the candle and do not change retroactively, increasing the reliability of the indicator.

Signal Style for Additional Timeframes:

A new style has been implemented for signals originating from higher and lower timeframes.
Signals from additional timeframes are represented with triangles of specific sizes and colors, making them easy to identify on the chart.

Automatic Configurations Based on Timeframe:

A function has been added that automatically adjusts the indicator's settings based on the selected timeframe.
This ensures that signals are optimal in each timeframe without the need for manual adjustments.

Configurations adapt for the following timeframes:

Monthly, Weekly, and Daily: Parameters adjusted for long-term analysis.
4 Hours and 1 Hour: Parameters optimized for intraday and short-term trading.

Optimal for Swing Trading:

The Sigma 2.0 indicator is particularly effective for swing trading strategies.
It provides clear and reliable signals on higher timeframes, such as the daily chart.

27 Kas

Sürüm Notları

Adjusted the lookahead parameter in the request.security function to barmerge.lookahead_on. This ensures that buy and sell signals from higher timeframes are correctly aligned with the current day when viewed on lower timeframes (e.g., 4H, 1H, 15m), eliminating the one-day lag previously experienced.

10 Ara

Sürüm Notları

Sigma 2.5 is an enhanced swing trading indicator designed to work optimally with the 4-hour (4H) and daily (1D) timeframes, though it can be adapted to other timeframes. The main idea is to wait for a buy signal on the daily chart, then switch to the 4H chart and enter partial buys as signals appear. This method helps achieve a more favorable average entry price. Similarly, when sell signals with labels occur on the 4H chart, take partial profits and adjust your stop loss upward each time a new sell signal is generated. This approach allows incremental profit-taking and capital protection, while maintaining flexibility to fine-tune the strategy on different timeframes. Keep in mind that the effectiveness of the signals depends on deeper technical analysis, market context, and the trend in the higher reference timeframe.

How to Use:

1. Select the daily timeframe and wait for a buy signal.
   
2. After the daily buy signal appears, switch to the 4H chart.
   
3. Execute partial buys on each 4H buy signal, improving your average cost basis.
   
4. On each 4H sell signal, take partial profits and move your stop loss to protect capital.
   
5. Adjust the ‘Additional Timeframe’ setting to analyze higher or lower timeframes (15m, 1h, 4h, 1D, 1W, 1M) according to your strategy, ensuring the daily sell signal is not active for lower timeframe buys.