Shifted Buy Pressure

Differentiated Buy Pressure Indicator Documentation

Overview: The Differentiated Buy Pressure indicator is a custom Pine Script™ indicator designed to measure and visualize buy and sell pressure in the market. It calculates buy pressure based on a combination of volume, range, and gap, and provides a differentiated buy pressure which is shifted by 90°, offering predictive insights.

Inputs:

Window Size: The window size for average calculation (default: 20).
Show Overlay: Option to show the price overlay (default: false).
Overlay Boost Factor: Boosting factor for overlaying the price (default: 0.01).
Calculations:

Relative Range: Calculated as (high - low) / close.
Average Range: Simple moving average of the relative range over the specified window.
Average Volume: Simple moving average of the volume over the specified window.
Relative Gap: Calculated as open / close[1].
Average Gap: Simple moving average of the relative gap over the specified window.
Buy Pressure: Calculated using the formula:

buy_pressure = -math.log(relative_range / avg_range * volume / avg_volume * relative_gap / avg_gap)

Differentiated Buy Pressure: Calculated as the difference between the current and previous buy pressure:

diff_buy_pressure = buy_pressure - buy_pressure[1]

Plots:

Zero Line: A horizontal line at zero for reference.
Buy Pressure: Plotted in blue, representing the calculated buy pressure.
Differentiated Buy Pressure: Plotted in red, representing the differentiated buy pressure.
Overlay: Optionally plots the price overlay boosted by the differentiated buy pressure.
Labels:

Labels are created to display the buy pressure and differentiated buy pressure values on the chart.
Usage: This indicator helps traders visualize the buy and sell pressure in the market. Positive values indicate buy pressure, while negative values indicate sell pressure. The differentiated buy pressure, shifted by 90°, provides predictive insights into future market movements.

This documentation provides a comprehensive overview of the Differentiated Buy Pressure indicator, explaining its purpose, inputs, calculations, and usage.