Expanded Cloud [LuxAlgo]

The Expanded Cloud tool allows traders to identify and follow trends accurately. It is based on the well-known Donchian Channels, but with enhanced features.

It features a trailing cloud that expands with the price and a trading stats dashboard.

🔶 USAGE



The tool is super easy to use. Traders can identify bigger or smaller trends just by adjusting the length from the settings panel.

Trend identification is based on Donchian Channels. An uptrend is indicated when the cloud is located below the price, while a downtrend is indicated when the cloud is above it.

Dots signal the start of a new trend, and the width of the clouds identifies the strength of the price expansion. The wider the cloud, the bigger the move.

The expanded cloud, due to its visual, can also act as a trailing stop.

🔹 Trend Identification



As we can see in the chart above, different length values identify different trends on the same BTC daily chart. Larger values identify larger trends.

🔹 Cloud Expansion



From the settings panel, traders can adjust how the clouds expand based on the Expansion % parameter. It accepts values from 0 to 100, which controls how much of the expansion is taken into account. Higher values will make the cloud expand and get closer to the price faster.

When the cloud moves opposite to the direction of the indicated trend (e.g: the cloud decreases while being below the price), it is often indicative of the end of a retracement, and we can expect the price to move with the indicated trend.

The chart above shows the effect of different Expansion % values.

🔹 Dashboard



The trading statistics dashboard informs traders of key metrics derived from the tool. The following are notable:

• PNL: Theoretical profit or loss from all trends identified by the tool in the right scale units.
  
• EXPECT.: Expected value of each trade. It is derived from win rate and risk-to-reward metrics.
  
• AVG: 1st TOUCH: The average number of bars from the beginning of a new trend until the price touches the cloud for the first time.
  

🔶 SETTINGS

• Length: Length for trend detection
  
• Expansion %: Percentage of price expansion for cloud formation
  
• Source: Source of the data
  

🔹 Dashboard

• Show Dashboard: Enable/disable the statistics dashboard
  
• Location: Dashboard location
  
• Size: Dashboard size