Discussing the article: "The Parafrac V2 Oscillator: Integrating Parabolic SAR with Average True Range"
This might provide some clarity for re-entry in manual trading, but the trend changes are nothing new in comparison to the original parabolic sar trend change, therefore it will not be good in thin markets.
I think it's better if you color the histogram grey on weakened volatility in the trend. I attached a code edit.
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Check out the new article: The Parafrac V2 Oscillator: Integrating Parabolic SAR with Average True Range.
The Parafrac V2 Oscillator is an advanced technical analysis tool that integrates the Parabolic SAR with the Average True Range (ATR) to overcome limitations of its predecessor, which relied on fractals and was prone to signal spikes overshadowing previous and current signals. By leveraging ATR’s volatility measure, the version 2 offers a smoother, more reliable method for detecting trends, reversals, and divergences, helping traders reduce chart congestion and analysis paralysis.
In the domain of technical analysis, the quest for a singular, reliable signal often compels market participants to employ a multitude of indicators concurrently to validate trading signals. This practice, while aimed at increasing confirmation, frequently results in interface clutter and interpretive complexity. A more elegant solution lies in the conceptual integration of multiple analytical techniques into a single, cohesive oscillator. Such a composite indicator can harness the synergistic properties of its components, potentially offering more nuanced and dependable signals.
The original Parafrac Oscillator represented an initial attempt into this methodology, merging the trend-following capabilities of the Parabolic SAR with the volatility identification of the Fractal indicator. While effective in many scenarios, empirical observation revealed a susceptibility to signal distortion caused by isolated, high-volatility price bars. To mitigate this noise, a cap was applied to the oscillator's output, constraining its range to between -10 and +10. The present research builds upon this foundation by proposing a more foundational enhancement: the replacement of the Fractal indicator with the ATR. This article explores the theoretical rationale for this substitution and examines its impact on the oscillator's signal generation profile, thereby introducing theParafrac V2 Oscillator.
Author: Daniel Opoku