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Crossover/Convergence of Several Trading indicators

by QuantShare, 3402 days ago
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The crossover/convergence trading indicator allows you to generate signals when two, three or four indicators are almost equal. Given a sensitivity parameter the crossover/convergence indicator calculates the different differences between each provided technical indicator and then generates a signal if the lowest difference is lower than the specified sensitivity threshold.

In the first four arguments of the crossover/convergence indicator you can specify your technical analysis indicators. The fifth argument allows you to specify the sensitivity parameter. The sensitivity value should depend on the stock or security you are analyzing, you can for example specify a value that is dependent on the security price.

In case you want to find less than four indicators with the same value, you can ignore the next indicators by specifying dummy values. In this case the dummy value will be the first trading indicator you specified as an argument.

Here is an example of a trading rule that generates a signal when three moving averages, each one with a different lookback period, are almost equal:
IsEqual(sma(10), sma(30), sma(60), sma(10), 0.5);

A signal is returned only when the difference between the 10-Bar simple moving average and the 30-Bar simple moving average is lower than 0.5, the difference between the 10-Bar SMA and 60-Bar SMA is lower than 0.5 and the same for the difference between the 30-Bar SMA and 60-BAR SMA.
A low sensitivity value makes the indicator generates few signals while a high value makes it generates more signals.

Here is an example using a sensitivity value that depends on the security price:
IsEqual(sma(10), sma(30), sma(60), sma(10), close/100);

The higher the close price is the higher the sensitivity parameter value became.




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Type: Trading Indicator

Object ID: 626


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Style:
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Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.