Confluence Stack

Please read the instructions below. The code was mostly written using AI so may contain errors. Happy trading all and good luck. ATB Richard

INTENDED USE
This indicator is designed for technical traders who want to move beyond simple buy/sell signals and gain a deeper understanding of the underlying market dynamics. It is ideal for trend followers, swing traders, and anyone looking to confirm the quality of a trend.

WHO IS THIS FOR?

Traders who want to differentiate between strong, sustainable trends and weak, unreliable moves.

Analysts looking to identify high-conviction setups backed by multiple factors (e.g., momentum confirmed by volume).

Discretionary traders who need a quick, visual tool to gauge market sentiment and avoid choppy conditions.

WHY USE IT?

Traditional indicators often give conflicting signals. The Confluence Stack solves this by aggregating multiple perspectives into one clear visual. It helps you answer not just "Is the market going up?" but "WHY is it going up, and how strong is the conviction?". This allows for more informed decision-making and helps filter out low-probability trades.

DISCLAIMER AND LICENSE

This script is for educational purposes only and is not a recommendation to buy or sell any financial instrument. All trading and investment decisions are the sole responsibility of the user. Trading involves significant risk.

This source code is subject to the terms of the Mozilla Public License 2.0 at mozilla.org/en-US/MPL/2.0/

HOW TO USE THIS INDICATOR

This indicator is designed to show the 'character' of a market move by grouping signals into distinct categories. Instead of seeing many individual signals, you see the strength of the underlying forces driving the price.

1. READ THE HEIGHT (Strength of Confluence)
The total height of the stack shows the strength of agreement. A tall stack means many signals are aligned, indicating a high-conviction move. A short stack means weak agreement and a choppy, indecisive market.

2. READ THE COLOR (Character of the Move)
The colors tell you WHY the market is moving.

BLUE (Momentum): A stack of mostly blue shades indicates a trend driven by pure momentum. This is the 'speed' of the market.

RSI (Relative Strength Index): Measures the magnitude of recent price gains versus losses. A smooth measure of trend strength.

Stochastic Oscillator: Measures the current closing price's position within the recent high-low range. More sensitive to immediate price action.

CCI (Commodity Channel Index): Measures the price's deviation from its moving average. Excels at identifying cyclical turns.

MACD (Moving Average Convergence Divergence): A trend-following momentum indicator showing the relationship between two moving averages. Excellent for identifying the start and end of trends.

YELLOW (Volume): The appearance of yellow shades confirms the move is supported by high market participation. This is the 'fuel' for the trend.

Volume Ratio: A custom signal that triggers when buy or sell volume is unusually high compared to its recent average.

CRV (Candle Range Volume): A custom signal that looks for candles with significant price range and volume.

OBV (On-Balance Volume): A cumulative indicator that adds volume on up days and subtracts it on down days. It shows the long-term flow of money.

FUCHSIA (Volatility): A fuchsia block signals a volatility breakout. This adds a sense of urgency and confirms the price is moving with exceptional force.

Bollinger Bands: A signal triggers when the price closes outside of the upper or lower standard deviation bands.

ORANGE (Price Action): An orange block is a pure price structure signal. It's a raw statement of intent from the market.

Price Gap: A signal that triggers when there's a gap up or gap down between candles.

3. READ THE TRANSITION (Shift in Sentiment)
The most important signal from the stacks is the flip from one side of the zero line to the other.

Flipping from Negative to Positive: A bearish stack disappears and is replaced by a bullish stack. This indicates market sentiment is shifting from bearish to bullish.

Flipping from Positive to Negative: A bullish stack disappears and is replaced by a bearish stack. This warns of a potential top or the start of a new downtrend.

4. FILTER FOR NOISE (Plot Threshold)
In choppy markets, the stack can flicker with low signal counts (e.g., +1 or -1). To focus only on high-conviction moves, go to the indicator settings and increase the "Plot Threshold". A setting of 2 or 3 will hide all stacks that don't have at least 2 or 3 agreeing signals, effectively filtering out market noise and keeping your chart clean.

5. CUSTOMIZE YOUR SIGNALS (Enable/Disable)
This indicator is fully customizable. In the settings, you can enable or disable each of the 9 indicators individually. For example, if you are a pure momentum trader, you could disable all Volume, Volatility, and Price Action signals to focus only on the blue stacks. Tailor it to fit your specific trading style.

EXAMPLE INTERPRETATIONS
Strong, Confirmed Trend: A tall stack of mostly blue (Momentum) and yellow (Volume) indicates a high-quality trend backed by both speed and market participation.

Momentum-Only Trend: A tall stack of only blue is a strong momentum move, but the lack of yellow (Volume) is a warning that the move may lack the "fuel" to be sustained.

Choppy/Indecisive Market: A short, mixed-color stack flickering around the zero line means the market is choppy with no clear conviction. It's often best to stay out.

Volatility Breakout: A new stack that appears suddenly with a fuchsia (Bollinger Bands) block on its first bar suggests a volatility-driven breakout is initiating.

Exhaustion Move: An orange (Price Gap) block appearing at the peak of a tall, long-standing stack can signal an exhaustion gap, potentially marking the end of the trend.

Weakening Conviction (Divergence): If price makes a new high but the positive stack is visibly shorter than the stack at the previous price high, it suggests underlying conviction is weakening.