Logarithmic Fair Value Anchor | PWLogarithmic Fair Value Anchor
This indicator overlays a dynamic "fair value" estimate on the price chart, anchored to the logarithmic rate of change (ROC) of a user-selected reference asset. It aims to provide a relative valuation perspective by comparing the chart symbol's smoothed log-price to the momentum of the anchor, with optional deviation bands for contextualizing price extremes. The design draws from observations of cross-asset relationships (e.g., liquidity proxies or commodities influencing crypto/equities), offering a flexible tool for exploring mean-reversion or divergence setups.
Core Mechanics and Math Overview
At its foundation, the fair value line starts with a baseline: the exponential of an EMA-smoothed natural log of the close price over a user-defined lookback (default 180 bars). This log transformation helps handle exponential growth common in assets like BTC, creating a smoother, scale-invariant trend estimate.
The anchor's influence is incorporated via its 1-period ROC (percentage change), smoothed with an EMA over the same lookback. This "base influence" multiplicatively adjusts the baseline: fair_value = baseline * exp(base_influence). An optional correlation filter weights this adjustment based on the absolute Pearson correlation between log(prices) and log(anchor) — if correlation falls below a threshold (default 0.0), the influence is reduced or zeroed, allowing manual override for custom emphasis.
The result is further smoothed with a DEMA (default length 14) for responsiveness. Deviation bands are plotted multiplicatively around this fair value using exp(deviation * level), ensuring proportionality on log charts. Users can switch between three band types:
Log Stdev: Standard deviation of the log(price / anchor) ratio over the lookback — dynamic and volatility-responsive.
Static Sigma: A fixed user-input deviation value (default 0.15) — non-adaptive, providing consistent relative widths influenced by the anchor's scale.
ATR: Relativized Average True Range (ATR / fair_value * scaling multiplier, default 3.0) — adjusts to recent range but smoother than stdev in high-vol markets.
Bands are asymmetric (separate upper/lower multipliers, defaults 1.8/1.25) with three levels (1-3x deviation), highlighting potential overbought/oversold zones.
Key Features
Anchor Flexibility: Predefined options include Gold (XAUUSD), Silver (XAGUSD), S&P 500 (SPX), BTC, or custom proxies like Global Liquidity Index (GLI) aggregates from FRED/ECONOMICS data sources.
Trend and Visuals: Basic trend detection (price vs. offset fair value) colors bars orange (bullish) or blue (bearish). Extreme band touches add diamond markers and background fills for quick identification.
Info Table (Toggleable): A compact dashboard showing current fair value, trend direction/duration (simple 8-bar slope and streak counter), z-score deviation (log(price / fair_value) / base_deviation, with approximate normal percentile for statistical context), and neutral bias notes.
Customization: Inputs for lengths, offsets, multipliers, and correlation settings allow tailoring to different assets or timeframes.
What Makes This Approach Distinct
Inspired by fair value models seen in online discussions (e.g., on X/Twitter), this script evolved from a liquidity-specific idea to a generalizable anchor-based tool. The logarithmic ROC adjustment provides a novel way to "pull" the fair value toward an external reference without direct ratioing, differing from traditional pairs trading or simple moving averages. Band variety addresses practical challenges like excessive volatility in crypto (where stdev bands can widen dramatically), offering alternatives like static sigma for benchmark-style consistency or ATR for range-focused adaptation — an exploration not commonly combined in one indicator.
Usage Suggestions
On Crypto Charts: Use GLI/M2 proxies as anchors for macro liquidity context; switch to ATR bands (longer ATR length like 180) to tame vol spikes. Monitor z-score >2σ for potential pullbacks.
On Equities/Indices: Anchor to Gold for inflation views or S&P for broad market ties; static sigma bands can highlight persistent deviations in trending regimes.
General Tips: Enable log scale on TradingView for visual accuracy. Use the offset (default 90) to "project" fair value forward for anticipation. Combine with your own filters — e.g., band crosses as entry signals or percentile extremes (>95%) as overextension alerts. The table's deviation metric helps quantify "how far" price has strayed, assuming approximate log-normality.
Testing: Backtest on historical data across anchors/bands to see fit; shorter lookbacks for intraday, longer for swings.
Available Anchors and Their Purpose
The indicator lets you select different reference assets/symbols to influence the fair value calculation. Each anchor brings its own momentum and context to the relative valuation:
Gold (XAUUSD) — Tracks gold price as a classic safe-haven and inflation-sensitive asset. Useful for spotting divergences in risk-on/risk-off environments.
Silver (XAGUSD) — Similar to gold but often more volatile and industrial-demand driven. Can highlight commodity cycles or broader metal trends.
S&P 500 (TVC:SPX) — Represents broad U.S. equity market performance. Helpful for comparing the chart asset to overall stock-market momentum.
BTC (INDEX:BTCUSD) — Self-referencing anchor (BTC to BTC). Useful as a neutral baseline or for testing the indicator's behavior on its native symbol.
GLI Proxy — An experimental, user-constructed approximation of global liquidity conditions. It combines select central bank balance sheet data (FRED/ECB/Japan/China) with major FX rates to create a rough composite proxy. Not an official economic index — purely illustrative and simplified for visualization purposes.
M2 Proxy — An experimental synthetic measure attempting to capture broad money supply trends across major economies (U.S., Eurozone, Japan, China, UK). It aggregates M2 data series multiplied by relevant exchange rates and scaled. Like the GLI proxy, this is not an economist-endorsed or precise M2 aggregate — it's a basic, illustrative construction meant for exploratory macro context only.
Important Notes on Proxies
The GLI Proxy and M2 Proxy are experimental approximations created within Pine Script using publicly available economic data feeds. They are not accurate substitutes for official global liquidity or money-supply metrics published by central banks or research institutions. Values can be noisy, delayed, or incomplete depending on data availability.
For best results, users should:
Test different anchors on their chosen asset and timeframe.
Adjust lookback length, correlation threshold, band type, and multipliers to better fit the specific market (e.g., longer lengths for lower timeframes or high-vol assets like crypto).
Be aware that proxy-based anchors may behave differently across symbols due to data quirks or correlation shifts.
This flexibility is what makes the tool adaptable — but it also means results are highly dependent on user configuration and market conditions.
This is an exploratory valuation overlay — results vary by market, settings, and anchor relevance. Not intended as trading advice; always verify with independent analysis.
Notes
Pine Script v6; requires access to external symbols via request.security().
Potential for minor repainting on realtime bars due to smoothing.
Community input welcome for refinements!
Statistics
Standard Deviation Linesplot standard deviation lines for 1sd, 2sd, 3sd. The user gives the data for the standard deviation and the time.
Price % Change from Time HighDisplays the following.
Highest in Last (interval)
Current Price:
% From High:
% To High:
% From (internal) Chart High:
Volume + ATR Robust Z-Score Suite (MAD)Plots relevant volume with relevant volatility using z-core to calculta de deviations
Today's Price Position On Intraday-From Low /High OVERVIEW
A clean, professional indicator that displays your stock's current position relative to today's high, today's low, and yesterday's close - all in one convenient table.
🎯 WHAT IT SHOWS
Three key metrics in real-time:
- From Low: How far price has moved from today's lowest point
- From High: How far price is from today's highest point
- % Today: Today's percentage change vs yesterday's 4 PM close
✨ KEY FEATURES
✓ Real-time percentage tracking throughout the trading day
✓ Works on ALL intraday timeframes (1min, 5min, 15min, etc.)
✓ Includes Pre-Market (4:00-9:30 AM) and Regular Trading Hours (9:30-4:00 PM)
✓ Color-coded indicators: Green (up), Red (down), Yellow (at reference point)
✓ Clean, non-intrusive table display in bottom-right corner
✓ Accurate reference to previous day's actual closing price
🔧 TESTING MODE
Built-in testing mode allows you to:
- Manually input test values for High, Low, Close, and Previous Close
- Verify calculations and behavior before live trading
📈 IDEAL FOR
- Day traders monitoring intraday price action
- Swing traders tracking daily momentum
- Anyone wanting quick visual reference of price position
- Traders who need to know "where we are" at a glance
💡 HOW TO USE
Simply add to your chart - no configuration needed! The indicator automatically:
1. Tracks today's high and low (including pre-market)
2. References yesterday's 4 PM closing price
3. Calculates your current position as percentages
4. Updates in real-time with color-coded signals
🎨 COLOR LEGEND
- Green: Price is up/above reference
- Red: Price is down/below reference
- Yellow: Price is exactly at reference point (unchanged)
- Orange: Previous day's close reference price
⚙️ TECHNICAL NOTES
- Automatically resets at start of each trading day
- Handles both pre-market and regular hours seamlessly
- Uses confirmed previous day close (no repainting)
- Lightweight and efficient - won't slow down your charts
Perfect for traders who want professional-grade information without chart clutter!
Combo Premium SMA Alert SystemShort Straddle for ATM Options Entry at SMA Cross over downside and SL or Exit SMA Cross over Upside
Position Size Gev_Risk ($)
The amount of money you are willing to lose if the stop-loss is hit.
Base Stop Price
The stop-loss price you set. The stop is recalculated in real time as price moves.
Fee (%) round-trip
Estimated total trading fees for opening and closing the position.
Stop Mode
With Buffer: adds extra distance to the stop, resulting in a smaller position size
No Buffer: uses the Base Stop Price exactly as entered
Stop Buffer (%)
The percentage added to the stop distance when Stop Mode is set to With Buffer.
Live adjustment behavior
The stop price updates continuously as price moves, and the position size is recalculated live to stay aligned with the selected Risk ($).
Entropy-Gated Expansion StateThis indicator identifies sustained directional expansion regimes by separating regime qualification from regime persistence. Directional entropy is used to detect when price transitions from a disordered environment into a structured one, acting as a gate that enables participation only during favorable market conditions. Once qualified, trend structure maintains the active state through consolidations and minor pullbacks, ensuring the indicator remains engaged throughout the expansion phase rather than firing as a short-lived signal.
The result is a persistent, state-based output that avoids sideways markets, reduces noise, and remains active during sustained trends across a wide range of assets, including high-volatility instruments.
Order VolumeGranular order volume.
Mainly to be used in other indicators where accurate order flow is needed.
Uses 1S security to pull higher resolution data and then adds into bin based on candle size of chart.
1S can be changed to different time frames based on data limitations.
Plot delta.
Return Skew (Directional Asymmetry)This indicator measures the asymmetry of returns over a rolling window, specifically evaluating whether positive returns dominate negative returns in magnitude rather than frequency. The purpose of this indicator is to identify assets whose upside moves are structurally stronger than their downside moves, indicating convex return behaviour. Unlike trend or momentum indicators, return skew captures the quality of price movement, distinguishing between assets that grind upward versus those that experience explosive upside relative to drawdowns. By requiring positive return skew, this indicator helps avoid assets that are rising through frequent small gains but are vulnerable to sharp downside moves, thereby favouring assets exhibiting genuine asymmetric upside potential.
FOMC Policy Events[nakano]### FOMC Policy Events
#### Summary / 概要
This indicator plots the historical policy decisions of the U.S. Federal Open Market Committee (FOMC) directly onto your chart. It is an essential tool for traders and analysts who want to visualize how the market reacts to changes in monetary policy. All historical event data from 2000 onwards is hard-coded into the script for fast and reliable performance.
このインジケーターは、米国連邦公開市場委員会(FOMC)の過去の政策決定をチャート上に直接プロットします。金融政策の変更に対する市場の反応を視覚的に分析したいトレーダーやアナリストにとって不可欠なツールです。2000年以降の全ての過去イベントデータが含まれます。
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#### Features / 主な機能
* **Comprehensive Historical Data / 包括的な過去データ**
Includes all historical scheduled and emergency FOMC rate decisions from January 2000.
2000年1月以降の、全ての定例および緊急のFOMC金利決定の履歴を含みます。
* **Detailed Event Labels / 詳細なイベントラベル**
Each event is marked with a clear label showing:
各イベントには、以下の情報を示す明確なラベルが表示されます:
* The exact date of the announcement.
発表の正確な日付
* The type of decision (Rate Hike, Rate Cut, Hold, or Emergency Cut).
決定内容(利上げ、利下げ、据え置き、緊急利下げ)
* The resulting Federal Funds Target Rate.
決定後の政策金利(FF金利ターゲット)
* **Fully Customizable Display / 柔軟な表示設定**
From the indicator's settings menu, you can:
インジケーターの設定画面から、以下の操作が可能です:
* Individually toggle the visibility of Rate Hikes, Rate Cuts, and Holds.
「利上げ」「利下げ」「据え置き」の表示・非表示を個別に切り替える
* Choose your preferred language for the labels (English or Japanese).
ラベルの表示言語を「英語」または「日本語」から選択する
* **Clear Visual Cues / 明確なビジュアル**
* **Rate Hikes:** Green labels positioned below the price bars.
**利上げ:** バーの下に緑色のラベル
* **Rate Cuts:** Red labels positioned above the price bars.
**利下げ:** バーの上に赤色のラベル
* **Holds:** Gray labels positioned above the price bars.
**据え置き:** バーの上に灰色のラベル
* **Emergency Events:** Specially highlighted in maroon for easy identification.
**緊急イベント:** 識別しやすいように特別な色(ワインレッド)で強調表示
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#### How to Use / 使用方法
1. Add the indicator to your chart.
インジケーターをチャートに追加します。
2. Click the **Settings (gear icon)** next to the indicator name on your chart.
チャート上のインジケーター名の横にある**設定(歯車アイコン)**をクリックします。
3. In the "Display Settings" section, check or uncheck the boxes to show or hide different event types.
「Display Settings」セクションで、各イベントタイプの表示・非表示をチェックボックスで切り替えます。
4. In the "Language Settings" section, select your preferred language from the dropdown menu.
「Language Settings」セクションで、ドロップダウンメニューからお好みの言語を選択します。
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#### A Note on Data / データについて
The event data included in this script is static and contains historical decisions up to September 2025. The script does not plot future scheduled meetings and will need to be manually updated as new policy decisions are made.
このスクリプトに含まれるイベントデータは静的なものであり、2026年1月までの過去の決定を含んでいます。未来のスケジュールをプロットする機能はなく、新しい金融政策が決定された場合は、スクリプトの手動更新が必要です。
Laguerre Filter [BackQuant]Laguerre Filter
Overview
The Laguerre Filter is a powerful trend-following tool designed to smooth price action while maintaining responsiveness to market changes. It is based on the Laguerre recursive filter, which is a type of signal processing filter that adapts to both the current price dynamics and the underlying trend. The Laguerre Filter can be seen as a method to reduce market noise, enabling traders to more easily identify the strength and direction of trends while minimizing lag.
The Laguerre Filter is well-suited for markets with varying volatility levels, offering a smoother representation of price action without the delay associated with traditional moving averages. By dynamically adjusting to price movements, the Laguerre Filter provides a more adaptive and reliable signal compared to simpler smoothing techniques.
What is the Laguerre Filter?
The Laguerre Filter is derived from the Laguerre polynomial, which is used in signal processing for smooth filtering of data. The Laguerre filter is a recursive filter, meaning that each new value is calculated based on both the current price data and previous values, with a weighting system that allows it to adapt to market conditions. This recursive nature helps reduce the impact of short-term fluctuations, enabling the filter to focus on the underlying trend.
The Laguerre filter uses a feedback mechanism, where the input signal (price data) is smoothed iteratively. This iterative process helps avoid the lag that is typically associated with traditional moving averages while still capturing the overall trend direction.
The filter is designed to have:
Adaptive behavior: It reacts quickly to significant price changes while ignoring minor fluctuations.
Reduced noise: By filtering out random short-term price movements, it provides a clearer view of the underlying trend.
Customizability: Traders can adjust the filter’s sensitivity through user inputs, making it adaptable to different market conditions.
Core Calculation Methodology
The core of the Laguerre Filter lies in its recursive calculation:
Each new value is calculated using the previous value along with the current price input.
The recursive formula is governed by two key parameters: the damping factor (gamma) and the order of the filter (number of Laguerre elements).
The damping factor controls how responsive the filter is to changes in price. A higher gamma value makes the filter smoother but introduces more lag, while a lower gamma value makes it more reactive to price changes but can introduce more noise.
The order defines how many Laguerre elements are used in the calculation. A higher order results in a smoother output but with more delay, while a lower order provides a faster response but less smoothing.
The filter works by weighting previous values with a binomial weighting system, which assigns more weight to recent values and less weight to older values. This creates a dynamic smoothing effect that adapts to price volatility, ensuring that the filter is neither too slow nor too noisy.
Signal Logic and Trend Detection
The Laguerre Filter continuously evaluates the strength and direction of the trend by comparing the current smoothed value to the previous value:
If the current value is greater than the previous value, the trend is considered bullish, and the filter will signal a long condition.
If the current value is less than the previous value, the trend is considered bearish, and the filter will signal a short condition.
The trend detection logic is based on the recursive nature of the filter, which smooths price movements over time. This allows the filter to capture the broader trend while minimizing the influence of short-term price fluctuations.
The trend state is also visually represented by color-coding:
Green color represents an uptrend (bullish condition).
Red color represents a downtrend (bearish condition).
Neutral (white) indicates no clear trend direction.
This color-coding helps traders easily identify the prevailing trend and decide whether to enter or exit trades based on the trend's strength.
Laguerre Filter Behavior and Performance
The performance of the Laguerre Filter can be influenced by several factors:
Gamma (Damping Factor): A higher gamma value results in a smoother filter but increases lag. A lower gamma value allows for a faster response but may introduce more noise, making it more reactive to smaller price changes.
Filter Order: The order determines how many Laguerre elements are used in the filter calculation. A higher order provides more smoothing but increases lag, while a lower order results in a quicker response but less smoothing.
The sweet spot for gamma is typically between 0.7 and 0.85, where the filter offers a good balance between smoothness and responsiveness. The filter order is usually set to 4 for classic Laguerre filtering, but higher orders can be used for more smoothing if needed.
The Laguerre Filter’s performance shines in markets with sustained trends, where the filter can effectively capture and represent the underlying direction without excessive lag. It is particularly useful in volatile markets, as it helps smooth out noise while providing a clear picture of the trend.
Visual Presentation
The Laguerre Filter provides a dynamic, color-coded line that follows the trend direction. This line can be displayed alongside price data to visually highlight the market trend. In addition to the main Laguerre line, several visual enhancements can be applied:
Gradient fill between the price and the Laguerre Filter line, providing a visual cue for bullish or bearish market conditions.
Candle coloring to reflect the current trend, making it easier to spot trend reversals or confirmations directly on the chart.
Background shading to visually highlight areas of strong trend or consolidation.
Edge glow effect that highlights trend boundaries, making it easy to spot key levels of support or resistance.
These visual elements enhance the usability of the Laguerre Filter, allowing traders to quickly assess the market trend and make informed decisions.
Practical Use Cases
1) Trend Following
The Laguerre Filter is ideal for trend-following strategies. By using the filter to identify the prevailing trend, traders can:
Enter long positions when the Laguerre Filter turns bullish (green).
Enter short positions when the Laguerre Filter turns bearish (red).
By aligning trades with the dominant trend, traders can improve their chances of success.
2) Trend Strength Assessment
The Laguerre Filter can also be used to assess the strength of the trend:
A rising Laguerre value indicates a strengthening uptrend.
A falling Laguerre value indicates a strengthening downtrend.
A flattening Laguerre value signals weakening momentum or consolidation.
This information can be used to adjust position sizing or to decide when to enter or exit a trade.
3) Trade Management
The Laguerre Filter can also assist in trade management:
Use the Laguerre line as a trailing stop for long positions in an uptrend.
Scale out of positions as the Laguerre value begins to flatten or reverse.
Use the Laguerre Filter to avoid trades when the market is in consolidation or lacks a clear trend.
Tuning Guidelines
The Laguerre Filter can be adjusted for different market conditions using the following parameters:
Gamma (Damping Factor): Adjust for the desired level of responsiveness versus smoothness. Typical values range from 0.7 to 0.85.
Filter Order: Adjust to control the level of smoothing. The default value of 4 is a good starting point, but higher orders can be used for smoother filters.
Summary
The Laguerre Filter is a versatile and adaptive trend-following indicator that smooths price data and reduces noise, making it easier to identify and follow trends. By using recursive smoothing techniques and adjustable parameters, the Laguerre Filter provides an accurate representation of market conditions with minimal lag. It is especially useful in volatile markets where traditional moving averages may fail to capture the underlying trend. With its color-coded trend detection, gradient fills, and customizable settings, the Laguerre Filter is a powerful tool for traders looking to stay aligned with the prevailing market direction.
Smart Position Calculator: Risk, Margin & TicksAre you tired of manually calculating position sizes or using clumsy external calculators? This minimalist indicator solves the problem directly on your chart.
It tells you exactly how much to buy/sell to risk a specific dollar amount (e.g., $50), considering your leverage and commissions.
Key Benefits:
Protect your deposit: Standardize your risk per trade.
Plan better: See your Risk/Reward ratio and Commission costs instantly.
Trade comfortably: The UI adapts to your screen (Dark/Light modes + Font Size control).
Scalp precisely: See distance in Ticks.
How it works:
Add to Favorites.
Select Entry, Stop, and Take Profit points on the chart.
Read the table.
Growth Comparison (Gold, Silver, Copper, Platinum & Crypto)
Data Sources
The symbols configured this time point to globally trusted data sources (providers).
・OANDA (XAUUSD, XAGUSD, XCUUSD, XPTUSD):
Data from OANDA, one of the world's largest FX and commodity providers. It reflects the “spot prices” for gold, silver, copper, and platinum in near real-time.
・BINANCE (BTCUSDT, ETHUSDT, XRPUSDT):
Data from Binance, the world's largest cryptocurrency exchange. It has the highest trading volume and is used as the global standard price indicator. Retrieves BTC, ETH, and XRP.
How the Script Works (Technical Explanation)
・Fixed Starting Price:
The script internally stores the price on the set “comparison start date” (e.g., January 1, 2025).
・Real-Time Calculation:
It constantly retrieves the latest current price and continuously calculates the percentage using the following formula.
Formula: (Current Price - January 1, 2025 Price) ÷ January 1, 2025 Price × 100
*Since January 1 is a global market holiday (New Year's Day) with no prices available, the script automatically adopts the next market opening price (e.g., January 2 morning's open price) as the baseline.
・Automatic label tracking:
The program displays labels like “GOLD” at the right edge of the graph. This ensures you never lose track of which line corresponds to which asset, even when lines overlap.
Translated with DeepL.com (free version)
3Y Rolling Correlation vs SPY (Daily)Correlation vs SPY as measured by daily returns over the Trailing Three Years
PPAO - Propagator Price Action Oscillator
How PPAO works in one cycle (what it does every candle)
PPAO has 3 moving parts that run every bar:
1) It measures new candle pressure (the “push”)
This is the forcing term.
Return (ret): did price go up or down from last close?
Body: did the candle close above or below its open?
CLV: did the candle close near the high or near the low of its range?
With Option B, the “price action push” is directional:
Body is positive on bullish candles, negative on bearish candles.
CLV is:
near +1 if the candle closes near the high (buying strength),
near -1 if it closes near the low (selling strength).
So a candle that closes weak (near the low) pushes PPAO downward even if the candle range is large.
2) It decides how much to remember vs forget (the “friction”)
This is damping / decay.
High volatility (noisy market) → forget faster
Low volatility (cleaner market) → remember longer
So PPAO adapts: in chop it won’t hold bias for long; in smooth trends it will.
3) It updates a hidden “momentum engine” (state)
Internally it keeps two numbers (p and q) that store the market’s impulse with memory.
Every candle:
it shrinks the old state (decay),
rotates it a bit (momentum/volatility creates oscillation),
then adds the candle push (forcing).
Finally, it converts that hidden state into a 0–100 line:
> 50 means the state is aligned bullish,
< 50 means it’s aligned bearish.
The image below will give you an example of a deep analysis using the Propagator Price Action Oscillator (PPAO).
PPAO below 30
What that means mechanically
Below 30 = bearish impulse extreme.
It happens when the recent candles are consistently “bearish pressure” according to the forcing inputs:
returns are negative and/or
candles close weak inside their range (CLV negative) and/or
bodies are bearish (close < open)
Also, if volatility is elevated, damping can make this flip faster and stay extreme during a strong impulse.
What it means behaviorally
PPAO < 30 is not “prediction.” It is diagnosis:
“Recent candle pressure has been strongly bearish.”
This can show up in two common market contexts:
Continuation context
Price is breaking structure down, and candles keep closing weak → PPAO stays < 30.
Distribution / hidden weakness context (important)
Price may look stable or near a high, but candles are repeatedly closing poorly inside their ranges (negative CLV).
That makes PPAO drop under 30 even if price hasn’t collapsed yet.
That second case is exactly why Option B (Body + CLV) is useful: it can flag weak closes / selling absorption earlier than “price-only” oscillators.
PPAO above 70
What that means mechanically
Above 70 = bullish impulse extreme.
It occurs when the forcing inputs are strongly positive:
returns are positive and/or
candles close strong inside their range (CLV positive) and/or
bodies are bullish (close > open)
If volatility is not exploding, damping won’t erase the accumulated bullish state quickly, so PPAO can stay above 70 during sustained buying pressure.
What it means behaviorally
Again: not a prophecy, but an impulse read:
“Recent candle pressure has been strongly bullish.”
Two common contexts:
Trend continuation
Price is pushing higher and closes are strong → PPAO remains > 70.
Exhaustion risk
If price is hitting major resistance/liquidity and you start seeing weaker closes (CLV drops) while PPAO stops making new highs → that’s where reversals begin to appear.
The key takeaway using both images
PPAO extremes are best understood as:
Below 30: “Sellers are currently dominating candle pressure.”
Above 70: “Buyers are currently dominating candle pressure.”
Whether that dominance leads to continuation or reversal depends on what price does next (structure + where you are on the chart). PPAO is measuring pressure, not guaranteeing outcome.


















