A Trend Weakness Indicator Using HMA, Parabolic SAR, Volume, and RSI
Summary
The Danger Zones indicator is designed to flag possible weakening within an existing trend. It classifies direction by comparing the close with both the Hull Moving Average and Parabolic SAR. For an uptrend warning, it combines slowing buying-volume momentum with negative average price movement and an RSI below its moving average. A downtrend warning uses the opposite price and RSI conditions alongside slowing selling-volume momentum. The signals are displayed through chart background colors.
The document lists configurable periods and SAR parameters, and describes using the warnings to reconsider entries or exits. It supplies implementation code, but no backtest, market examples, or evidence that the signals predict reversals. Its volume slowdown calculation and trend labels depend on chosen settings, which may behave differently across assets and time frames. The material advises testing configurations, but does not establish an optimal parameter set or quantify risk of false signals.
Key ideas
- Trend direction is defined by whether price is above or below both the HMA and Parabolic SAR.
- An uptrend warning requires slowing buying-volume momentum, negative average price movement, and RSI below its moving average.
- A downtrend warning applies corresponding opposite price and RSI conditions with slowing selling-volume momentum.
- The indicator exposes trend, volume, and RSI settings for adjustment across markets and time frames.
- The document provides no backtest or measured evidence that its warning conditions anticipate reversals.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.