Dynamic Trend Indicator Using Period Highs, Lows, and Signal Arrows

Summary

This document explains a trend indicator that plots a direction line in two colors and marks potential changes with arrows. Its two inputs are a lookback period and a strengthening percentage. The line calculation uses the close at the highest close within the period when price is below the previous line, and the close at the lowest close when price is above it, with the percentage adjustment applied to those values.

The stated arrow rules compare closes and lagged line values to generate upward or downward markers. The description gives calculation logic but no chart examples, trading rules for entering or exiting positions, or performance evidence. It also leaves important implementation details unclear, including how the percentage parameter is scaled and how line values are initialized. Treat the arrows as indicator signals requiring independent testing, rather than evidence of a profitable strategy.

Key ideas

• The indicator plots a two-color line intended to show trend direction.
• Its inputs are a calculation period and a strengthening percentage.
• The line uses period highs or lows of closing prices, adjusted by the percentage parameter.
• Arrow signals are defined by comparisons among recent closes and lagged line values.
• The document does not provide a trading system, implementation details for initialization, or performance results.

Tags

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