VCP Pivot Signals with Moving Average Trend Filters

Summary

This Pine Script strategy combines a moving average trend filter with measures of recent price compression to highlight possible VCP pivot setups. Its trend condition requires price and shorter averages to align above longer averages, with the long average rising. It calculates recent high-low and close ranges, ranks one range against a lookback history, and marks selected low-range conditions on the chart. The visible code also plots several configurable moving averages and volume averages.

The document is incomplete: it ends as the code begins defining a high-lookback calculation, before any full entry, exit, or position-sizing rules are shown. It provides no backtest results or evidence that the signals are profitable. The visible calculations and thresholds are configurable, and would require independent testing; the title alone does not establish that the implementation fully captures the usual volatility contraction pattern method.

Key ideas

• The trend filter requires price and shorter moving averages to sit above longer averages, with selected averages rising.
• Recent price ranges are compared with historical percentiles to identify compressed conditions.
• The script marks qualifying compression states on the chart using background colors.
• The available excerpt ends before complete pivot, trade entry, exit, and sizing rules are visible.
• No performance evidence is provided, so the signals require independent validation.

Tags

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