Various extended lines are displayed in order to see if the peaks and troughs made by the can act as potential lines.
- Length : Period of the channel indicator, higher values will return fewer changes of directions from the line
- Bounce Speed : Determine the speed of bounces made by the line, with higher values making the line converge faster toward the extremities of the channel.
- Gradient : Determine whether to use a gradient to color the area between each channel extremities, "On" by default.
- Transparency : Transparency of the area between each channel extremities.
It is clear that this is not a very common indicator to see, as such usages can be limited and very hypothetical. Nonetheless, when a bounce speed value of 1 is used, the line will have the tendency to lag behind the price, and as such can provides crosses with the prices which can provide potential entries.
The advantage of this approach against most indicators relying on crosses with the price is that the linear nature of the indicator allows avoiding retracements, thus potentially holding a position for the entirety of the trend.
Altho this indicator would not necessarily be the most adapted to this kind of usage.
When using a bounce speed superior to 1, we can see the predictive aspects of the indicator:
We can link the peaks/troughs made by the with the precedent ones made to get potential lines, while such a method is not necessarily accurate it still allows for an additional to interpret the indicator.
We presented an indicator aiming to replicate the behaviour of a indicator. While somehow experimental, it has the benefits of being innovative and might inspire users in one way or another.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.