Purple Cloud Signals with ATR Bands, SuperTrend, and EMAs
Summary
The Purple Cloud indicator combines ATR-based volatility bands, a SuperTrend trend filter, and 20-, 50-, and 200-period exponential moving averages. It marks potential reversals when price crosses a band and the indicator’s trend state changes. SuperTrend position classifies signals as stronger or standard, while candle colors show the current bullish or bearish state. The description also outlines reversal entries and exits, and using EMA crossovers to support trend assessment.
The article lists adjustable ATR, band, pressure-threshold, and display settings, with suggested parameter changes for faster or steadier markets. It recommends testing settings across assets and backtesting, but provides no performance results or systematic validation. Signal rules are described alongside implementation code, though the band and pressure calculations are not fully explained in the displayed excerpt. Treat the labels as indicator conditions rather than evidence of profitable or high-probability trades.
Key ideas
- Purple Cloud combines ATR-based bands with SuperTrend confirmation and exponential moving averages.
- Signals require a band condition and a change in the indicator’s trend state.
- SuperTrend position determines whether a signal receives a stronger classification.
- More reactive parameter settings may increase false signals, so the article recommends testing and backtesting.
- The document describes indicator rules but supplies no measured evidence of profitability.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.