OPEN-SOURCE SCRIPT
R-Squared Trend Strength and Direction [CHE]
Introduction
TradingView is a web-based platform that allows traders and investors to conduct comprehensive technical analyses, develop trading strategies, and track market movements in real-time. One of the many features TradingView offers is the ability to create custom indicators using Pine Script. In this presentation, we will focus on the implementation and application of an R-Squared indicator for analyzing trend strength and direction, as well as using the T3 indicator for trend direction confirmation.
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What is R-Squared?
R-Squared (R²), also known as the coefficient of determination, is a statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable(s). In technical analysis, R-Squared is used to quantify the clarity of a trend. A higher R-Squared indicates a clearer trend, less affected by random price fluctuations.
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Pine Script: Implementing the R-Squared Indicator
Inputs:
- Source: The data source to be analyzed, such as the average of high and low prices.
- Period: The period length for calculating sums and R-Squared values.
Sum Calculations:
- Sum X and Sum XX: These sums relate to the indices of the selected period.
- Sum XY and Sum YY: These sums relate to the products of the indices and their respective price values.
- Sum Y: The sum of price values over the chosen period.
Q-Values Calculation:
- Q-values are used to calculate the R-Squared value, which indicates trend clarity.
Trend State:
- Based on the R-Squared value, a trend state is determined, indicating whether a clear trend is present. Specific threshold values are used to identify trend changes.
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Using the T3 Indicator
The T3 indicator is used exclusively for confirming the trend direction in this strategy. It helps verify the direction of the trend identified by the R-Squared indicator.
T3 Indicator Calculation:
- The T3 indicator uses a series of exponential smoothings to smooth price movements and provide a clearer view of the trend direction.
- The T3 indicator confirms the trend direction indicated by the R-Squared indicator.
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Functioning of the R-Squared and T3 Combination
1. Input Parameters:
- Define the data source and period length for calculating sums and R-Squared values.
2. Sum Calculations:
- Calculate various sums over the defined period needed to derive Q-values.
3. Q-Values Calculation:
- Derive Q1, Q2, and Q3 from the sums to calculate the R-Squared value.
4. Trend State:
- Use the R-Squared value to determine if a clear trend is present, utilizing threshold values to recognize trend changes.
5. Trend Direction Confirmation with T3:
- Calculate the T3 indicator to confirm the trend direction. The T3 is used solely for direction confirmation, not for clarity.
6. Long and Short Conditions:
- Define long and short entry conditions based on the combination of R-Squared and T3 indicators, and visualize them on the chart.
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Conclusion
The R-Squared indicator is a powerful tool for analyzing the clarity of a trend. By integrating it into TradingView using Pine Script, traders can make informed decisions and optimize their trading strategies. The T3 indicator is used exclusively in this strategy to confirm the trend direction, enhancing the accuracy of trading signals.
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Questions and Discussion
Are there any questions about the implementation or application of the R-Squared indicator in TradingView? How can we further improve this indicator or integrate it into existing strategies?
Best regards
Chervolino
TradingView is a web-based platform that allows traders and investors to conduct comprehensive technical analyses, develop trading strategies, and track market movements in real-time. One of the many features TradingView offers is the ability to create custom indicators using Pine Script. In this presentation, we will focus on the implementation and application of an R-Squared indicator for analyzing trend strength and direction, as well as using the T3 indicator for trend direction confirmation.
---
What is R-Squared?
R-Squared (R²), also known as the coefficient of determination, is a statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable(s). In technical analysis, R-Squared is used to quantify the clarity of a trend. A higher R-Squared indicates a clearer trend, less affected by random price fluctuations.
---
Pine Script: Implementing the R-Squared Indicator
Inputs:
- Source: The data source to be analyzed, such as the average of high and low prices.
- Period: The period length for calculating sums and R-Squared values.
Sum Calculations:
- Sum X and Sum XX: These sums relate to the indices of the selected period.
- Sum XY and Sum YY: These sums relate to the products of the indices and their respective price values.
- Sum Y: The sum of price values over the chosen period.
Q-Values Calculation:
- Q-values are used to calculate the R-Squared value, which indicates trend clarity.
Trend State:
- Based on the R-Squared value, a trend state is determined, indicating whether a clear trend is present. Specific threshold values are used to identify trend changes.
---
Using the T3 Indicator
The T3 indicator is used exclusively for confirming the trend direction in this strategy. It helps verify the direction of the trend identified by the R-Squared indicator.
T3 Indicator Calculation:
- The T3 indicator uses a series of exponential smoothings to smooth price movements and provide a clearer view of the trend direction.
- The T3 indicator confirms the trend direction indicated by the R-Squared indicator.
---
Functioning of the R-Squared and T3 Combination
1. Input Parameters:
- Define the data source and period length for calculating sums and R-Squared values.
2. Sum Calculations:
- Calculate various sums over the defined period needed to derive Q-values.
3. Q-Values Calculation:
- Derive Q1, Q2, and Q3 from the sums to calculate the R-Squared value.
4. Trend State:
- Use the R-Squared value to determine if a clear trend is present, utilizing threshold values to recognize trend changes.
5. Trend Direction Confirmation with T3:
- Calculate the T3 indicator to confirm the trend direction. The T3 is used solely for direction confirmation, not for clarity.
6. Long and Short Conditions:
- Define long and short entry conditions based on the combination of R-Squared and T3 indicators, and visualize them on the chart.
---
Conclusion
The R-Squared indicator is a powerful tool for analyzing the clarity of a trend. By integrating it into TradingView using Pine Script, traders can make informed decisions and optimize their trading strategies. The T3 indicator is used exclusively in this strategy to confirm the trend direction, enhancing the accuracy of trading signals.
---
Questions and Discussion
Are there any questions about the implementation or application of the R-Squared indicator in TradingView? How can we further improve this indicator or integrate it into existing strategies?
Best regards
Chervolino
开源脚本
本着TradingView的真正精神，此脚本的创建者将其开源，以便交易者可以查看和验证其功能。向作者致敬！虽然您可以免费使用它，但请记住，重新发布代码必须遵守我们的网站规则。
免责声明
这些信息和出版物并不意味着也不构成TradingView提供或认可的金融、投资、交易或其它类型的建议或背书。请在使用条款阅读更多信息。
开源脚本
本着TradingView的真正精神，此脚本的创建者将其开源，以便交易者可以查看和验证其功能。向作者致敬！虽然您可以免费使用它，但请记住，重新发布代码必须遵守我们的网站规则。
免责声明
这些信息和出版物并不意味着也不构成TradingView提供或认可的金融、投资、交易或其它类型的建议或背书。请在使用条款阅读更多信息。