PriceZoneOscillatorLX

Description

The PriceZoneOscillatorLX strategy generates Long Exit signals when PZO values reach certain levels. Uptrend and non-trending market conditions are considered in this strategy. To check for trend existence, PriceZoneOscillator strategies use the Average Directional Index (ADX). If the ADX indicates trending conditions, an exponential moving average (EMA) is used for defining trend direction. By default, the strategy employs the 14 period ADX and the 60 period EMA.

In case the trend mode is spotted (ADX > 18), Long Exit signals are issued when:

  • PZO values rise above the "+60" level and start to go down afterwards, or

  • the price is below EMA (downtrend) and PZO is negative.

In non-trending conditions (ADX < 18), these signals are issued when:

  • having crossed the "+40" level from above, the PZO rises above the "+60" level and starts to go down, or

  • having crossed the "+40" level from above, the PZO falls below zero while the price is below the EMA, or

  • having crossed the "+15" level from below, the PZO fails to rise above "+40" and falls below "-5".

Input Parameters

Parameter Description
price The price for which the PZO and EMA are calculated.
length The number of bars used to calculate the PZO and the ADX.
ema length The number of bars used to calculate the EMA.

Further Reading

1. "Entering the Price Zone" by Walid Khalil and David Steckler. Technical Analysis of Stocks & Commodities, June 2011.

Backtesting is the evaluation of a particular trading strategy using historical data. Results presented are hypothetical, and there is no guarantee that the same strategy implemented today would produce similar results.

Technical analysis is not recommended as a sole means of investment research.

For educational purposes only. Not a recommendation of a specific security or investment strategy.

You may also like
MomentumPercentDiff
The Momentum Percent Diff is a momentum-based technical indicator. Unlike the regular Momentum ...
STARCBands
The Stoller Average Range Channel (STARC) Bands are two bands plotted around a short-term simple ...
FW_MOBO_Advanced
MOBO (Momentum Breakout Bands) study suggests that all markets and stock prices have a period ...