This is an improvement of the script published by LazyBear, tradingview.com/script/tzZx7dTy-Indicator-Balance-Of-Power/ The improvements are: 1. it includes gaps because it uses true range in stead of the current bar, 2. it has been turned into a percent oscillator as the basic algorithm belongs in the family of stochastic oscillators. Unlike the usual stochatics I refrained from over the top averaging and smoothing, nor did I attempt a signal line. There’s no need to make a mock MACD. The indicator should be interpreted as a stochastics, the difference between Stochs and MACD is that stochs report inclinations, i.e. in which direction the market is edging, while MACD reports movements, in which direction the market is moving. Stochs are an early indicator, MACD is lagging. The emoline is a 30 period linear regression, I use linear regressions because these have no lagging, react immidiately to changes, I use a 30 period version because that is not so nervous. You might say that an MA gives an average while a linear regression gives an ‘over all’ of the periods. The back ground color is red when the emoline is below zero, that is where the market ‘looks down’, white where the market ‘looks up’. This doesn’t mean that the market will actually go down or up, it may allways change its mind. Have fun and take care, Eykpunter.
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I fixed the fault that changing the periods in the inputs had no effect. Now it has.
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Added comments in the script and changed the names of some variables in more suggestive mnemonics.