[FXAN] 71 Cygni Algorithm (Scalping)

4月4日

⚜️ FXAN CYGNI INDICATORS ORIGINALITY

Originality comes from proprietary formula we use to measure the relationship between Volume and Price Volatility in relation to overall current market positioning in developing Volume Profile and multiple custom period Volume Profiles. We combine that with our own approach to measure price velocity in correlation to average daily/weekly/monthly ranges of the given market.

The relationship between current volume and price volatility gives us information about how much the volume that is currently coming into the market affects the price movement (volatility) and which side is more dominant/involved in the market (Buyers/Sellers). We call this the "Volume Impact" factor.

This information is then compared in relation to the overall current market positioning in developing Volume Profile and Multiple custom period Volume Profiles. We have created a rating system based on current price positioning in relation to the Volume Profile. Volume profile consists of different volume nodes, high volume nodes where we consider market interest to be high (a lot of transactions - High Volume) and low volume nodes where we consider market interest to be low (not a lot of transactions - Low Volume). We call this the current "Market Interest" factor.

We combine this information with our own approach to measure price velocity in correlation to the higher-timeframe price ranges. Calculation is done by measuring current ranges of market movement in correlation to average daily/weekly/monthly ranges. We call this "Price Velocity" factor.

This approach was applied to develop key components of our Tradingview Indicators, we've simplified some of the calculations and made them easy to use by programming them to display buying/selling volume pressure with colors.

In addition to our own proprietary formulas and criterias to measure volume impact on price, we've also used an array of indicators that measure the percentage change in volume over custom specified periods of time, including custom period ranged Volume Profile, Developing VA, Accumulation/Distribution (A/D Line), Volume Rate of Change (VROC), Volume Price Trend (VPT) - all of them with of course fine-tuned settings to fit the purpose in the overall calculation.

Reasons for multiple indicator use:
Custom period ranged Volume Profiles: To determine current interest of market participants. Used for "Market Interest"
Developing VA: To determine current fair price of the market (value area). Used for "Market Interest".
Accumulation/Distribution (A/D Line): Helping to gauge the strength of buying and selling pressure. Used for "Volume Impact"
Volume Rate of Change (VROC): To give us information about percentage change in volume. Used for "Volume Impact"
Volume Price Trend (VPT): To help identify potential trends. Used for "Volume Impact".
Average True Range (ATR): Used for measuring volatility. Used for "Volume Impact" and "Price Velocity".
Average Daily Range (ADR): Used for measuring average market price movement. Used for "Price Velocity".

How it all works together:
"Volume Impact" factor tells us the influence of incoming market volume on price movement. This information alongside the overall market positioning information derived from "Market Interest" factor combined with information about speed and direction relative to higher-timeframe price ranges frin "Price Velocity.

This is the basis of our proprietary developed Volume Dynamics analysis approach
"Volume Impact" x "Market Interest" x "Price Velocity"

Combining this factors together gives a good overall understanding of which side is currently more involved in the market to gauge the direction ("Volume Impact"), where the market is currently positioned to gauge the context ("Market Interest") and what the current market's momentum to improve the timing of our trades ("Price Velocity"). This increases our probabilities for successful trades, executed with good timing.

To simplify - our indicators will always analyze the volume behind every price movement and rate those movements based on the relationship between movement distance and volume behind it through an array of criterias and rate them.

Colors displayed by the indicators will be a result of that, suggesting which side of the market (Buyers or sellers) is currently more involved in the market, aiming to increase the probabilities for profitable trades. With the help of our indicators you have deep volume analysis behind price movements done without looking at anything else then indicator components.


🔷 OVERVIEW
Cygni 71 Algorithm is a TradingView indicator designed for short-term trading (scalping) and enhancing the precision of your entries/exits based on a higher timeframe market context. It analyzes the underlying volume behind market movements and colors the candles with the help of the Heiken-Ashi methodology to provide a clearer perspective on the market's potential direction and intentions.


🔷 KEY FEATURES
▊ Candle Coloring
▊ Upper Colored Bar
▊ Lower Colored Bar


🔷 HOW DOES IT WORK?
□ Candles will color in reference to the Heiken ashi "average bar" methodology, which uses a modified formula based on two-period averages. This way, you can observe the normal candlesticks with less noise as colors will suggest the most likely direction where the market might be heading.
□ Upper Colored Bar analyzes daily volume dynamics in the market's price action by referencing the daily average price weighted by volume. If the market is bullish, you’ll see the green bars, and if the market is bearish, the bars will color red.
□ Lower Colored Bar analyzes volume dynamics and the market's price action every few second and minute intervals by referencing average price weighted by volume. This makes it much more sensitive than the Upper Colored Bar. If the market is bullish, you’ll see the green bars, and if the market is bearish, the bars will color red.


🔷 HOW TO USE IT?
□ In general, we look for areas where all components are in sync. These are valid trading signals (refer to the usage example below).
□ If all components are not in sync, we should look for at least two of them to be in sync while one of them must be Upper Colored Bar.
□ Candle Colors: Looking for longs when the candles are green and looking for shorts when the colors are red
□ Upper Colored Bar: The most important component of this indicator is that we favor trading in the direction suggested by this component. Additional confirmation of other components is a bonus. The green color suggests a bullish market, trading long. Red color suggests bearish market, trading short.
□ Lower Colored Bar: This should not be used on its own but always combined with at least one of the other components due to its sensitivity. Colors are indicating longs when green and shorts when red.


🔷 COMBINING THE COMPONENTS
Each component of the indicator serves it's own purpose and analyzes the market from it's own perspective and with its own custom settings and formulas. The calculation of the individual component is done independently from other components. Once all of them align, we're able to execute trades with an edge as it signals that different aspects of volume and price analysis line up for the trading opportunity.

- Candle Colors are used for improving the timing of your entries/exits based on market structure
- Upper Colored Bar is used for determining the favorable direction of the market based on Daily Volume Dynamics.
- Lower Colored Bar used for determining the favorable direction of the market based on Second/Minute/3-minute Volume Dynamics.

It's important to combine the components to increase the probability of success - here's how you should look for a trade:

1. Assess the current most favorable market direction by referencing the Upper Colored bar, look for longs if it’s green and for shorts if it’s red
2. Look for the Candle Colors to align with the Upper Colored bar, look for longs if it’s green and for shorts if it’s red
3. Look for short-time frame volume dynamics to align with your entries, by referencing the Lower Colored Bar - look for longs if it’s green and for shorts if it’s red.

A valid example of the trade would be:
- Upper Colored Bar is green, indicating the favorable trading directions is long
- Lower Colored Bar is green, indicating the favorable trading directions is long
- Candle Colors are green, indicating the market structure is favorable to enter your positions


📊 USAGE EXAMPLE