This is an old and simple concept of mine that I am revisiting. It looks similar to the Vortex Indicator but the formulation is different. I was sick and tired of buying late at the top of the peaks, so I wanted to relate the current price to historic highs and lows (you can change how far you want to go back Time Length = tl). The functions are incredible simple:
lo = close -lowest(close,tl) hi = highest(close,tl) -close
This generates a weaving pattern that shows bullish (lo>hi) and bearish (lo<hi) zones. WMA's (Fast and Long which can be changed and I have the defaults set kind or high) are used to smooth the functions. Only the long is shown for the "hi" function to keep the plot cleaner. I used crossover points of the "lo" WMA curves to specify places of possible bearish "turn around" points and bullish "entry" points. Alerts can set set for these along with the main crossovers where the plots cross bullish (green) and bearish (red). It seems to be a really good companion to popular buy/sell indicators like the Supertrend.
Hope you like it and let me know if there are any questions.