BSTrend: A Smoothed Price-Range Indicator for Currency Trend Signals

Summary

BSTrend classifies the prevailing currency trend into an up or down state. Its calculation compares the current bar’s midpoint with the highest high and lowest low over a lookback period, smooths and normalizes that range position, and applies a logarithmic transformation. The sign of the resulting series determines the state: positive values indicate an uptrend and negative values a downtrend. The supplied implementation uses a period of 12 and colors the two states differently.

The stated trading rule is to act on the first bar that changes to the up state for a buy signal or to the down state for a sell signal. The document explains the indicator’s logic and includes implementation code, but gives no tests, market examples, performance results, or guidance for exits and risk control. Signals may therefore lag or change as price moves, and the description alone does not establish that the approach is profitable.

Key ideas

• The indicator measures the current midpoint relative to the recent high-low range.
• A smoothed, normalized transformation produces a positive or negative trend state.
• Blue bars represent uptrend and violet bars represent downtrend.
• The suggested entries occur when the indicator first switches to the corresponding state.
• The document provides no performance evidence or risk-management rules.

Tags

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