Trend Filter (2-pole) [BigBeluga]

1月17日

Trend Filter (2-pole) [BigBeluga]

The Trend Filter (2-pole) is an advanced trend-following indicator based on a two-pole filter, which smooths out market noise while effectively highlighting trends and their strength. It incorporates color gradients and support/resistance dots to enhance trend visualization and decision-making for traders.

SP500:


🔵What is a Two-Pole Filter?
A two-pole filter is a digital signal processing technique widely used in electronics, control systems, and time series data analysis to smooth data and reduce noise.

//@function Two-pole filter
//@param src (series float) Source data (e.g., price)
//@param length (float) Length of the filter (higher value means smoother output)
//@param damping (float) Damping factor for the filter
//@returns (series float) Filtered value
method two_pole_filter(float src, int length, float damping) =>
    // Calculate filter coefficients
    float omega = 2.0 * math.pi / length
    float alpha = damping * omega
    float beta = math.pow(omega, 2)
    
    // Initialize the filter variables
    var float f1 = na
    var float f2 = na

    // Update the filter
    f1 := nz(f1[1]) + alpha * (src - nz(f1[1]))
    f2 := nz(f2[1]) + beta * (f1 - nz(f2[1]))
    
    f2

• It operates using two cascaded smoothing stages (poles), allowing for a more refined and responsive output compared to simple moving averages or other basic filters.
  
• Two-pole filters are particularly valued for their ability to maintain smooth transitions while reducing lag, making them ideal for applications where precision and responsiveness are critical.
  
• In trading, this filter helps detect trends by smoothing price data while preserving significant directional changes.
  

🔵Key Features of the Indicator:

• Gradient-Colored Trend Filter Line: The main filter line dynamically changes color based on trend strength and direction:
  - Green: Strong uptrend.
  - Red: Strong downtrend.
  - Yellow: Indicates a transition phase, signaling potential trend shifts.
  
• Support and Resistance Dots with Signals:
  - Dots are plotted below the filter line during uptrends and above it during downtrends.
  - These dots represent consecutive rising or falling conditions of the filter line, which traders can set in the settings (e.g., the number of consecutive rises or falls required).
  - The dots often act as dynamic support or resistance levels, providing valuable guidance during trends.
  
  - Trend Signals:
  
• Customizable Sensitivity: The indicator allows traders to adjust the filter length, damping factor, and the threshold for rising/falling conditions, enabling it to adapt to different trading styles and timeframes.
  
• Bar Color Option: The indicator can optionally color bars to match the gradient of the filter line, enhancing visual clarity of trends directly on the price chart.
  

🔵How It Works:

• The Trend Filter (2-pole) smooths price data using a two-pole filter, which reduces noise and highlights the underlying trend.
  
• The gradient coloring of the filter line helps traders visually assess the strength and direction of trends.
  
• Rising and falling conditions of the filter line are tracked, and dots are plotted when consecutive conditions meet the threshold, acting as potential support or resistance levels during trends.
  
• The yellow transition color signals periods of indecision, helping traders anticipate potential reversals or consolidations.
  

🔵Use Cases:

• Identify and follow strong uptrends and downtrends with gradient-based visual cues.
  
• Use the yellow transition color to anticipate trend shifts or consolidation zones.
  
• Leverage the plotted dots as dynamic support and resistance levels to refine entry and exit strategies.
  
• Combine with other indicators for confirmation of trends and reversals.
  

This indicator is perfect for traders who want a visually intuitive and highly customizable tool to spot trends, gauge their strength, and make informed trading decisions.

1月20日

リリースノート

- "Bands" input. Defines distance of bands from a main line