In my 'Volatility Adjusted Profit Target' indicator, I've crafted a dynamic tool for calculating target profit percentages suitable for both long and short trading strategies. It evaluates the highest and lowest prices over the anticipated duration of your trade, establishing a profit target that shifts with market volatility. As volatility increases, the potential for profit follows, with the target percentage rising accordingly; conversely, it declines with decreasing volatility. As a trader, setting an optimal Take Profit level has always been a challenge. This indicator not only helps in determining that level but also dynamically adjusts it throughout the trade's duration, providing a strategic edge in volatile markets.
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Code refactor
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Modified the target profit percentage calculation to reflect the delta between the highest and lowest prices SMA in relation to the SMA of the lowest price, enhancing the indicator's sensitivity to range volatility. This adjustment offers a higher profit target, better capturing potential gains when the target is achieved, thereby aligning more closely with market volatility trends.
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Updated Profit Target Calculation: The denominator in the profit target percentage calculation now varies based on the direction of the trade. For long trades, the target percentage is calculated using the lowest price (as the base), reflecting potential upward price movement from this point. For short trades, the highest price is used, aligning with expectations of price decline from the peak. This adjustment ensures the profit target more accurately mirrors the volatility range and potential profit avenues specific to each trade direction, aiming for higher precision in setting achievable and strategic profit goals.
Very interesting script. Is it possible to make this in the strategy format with the strategy.entry, strategy.exit, and strategy.close using the alert_message? I’m new to the coding and I’m fascinated by what code can do and super appreciative of people that share their scripts so that others like myself can learn tremendously. And so thank you for sharing this with the community!