A Moving Average Cloud Colored by Trend and Relative Direction

Summary

The indicator plots a fast and a slow moving average and fills the space between them. Its color depends on whether the fast average is above or below the slow average and whether the fast average is rising or falling. This produces four visual states that combine relative trend direction with the short average’s slope. The example settings use an exponential fast average and a simple slow average, with periods of 50 and 200, respectively.

The code is presented as a conversion of an existing indicator for use in another charting environment. It returns both averages and draws the band between their higher and lower values. The description does not define a trading entry or exit rule, nor does it provide backtest evidence or performance claims. The cloud is therefore a visualization of moving-average relationships; traders would need to decide how to interpret its states and evaluate any resulting rules across instruments and market conditions.

Key ideas

• The indicator visualizes the area between a fast and a slow moving average.
• Its fill color combines the fast average’s position relative to the slow average with its slope.
• The example uses an exponential fast average and a simple slow average.
• The indicator provides a charting signal visualization but no entry, exit, or risk rules.
• The document reports no backtest or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.