Institutional Cycle Filter ICF
- Indicators
- Version: 1.0
Description
The Institutional Cycle Filter (ICF) is a sophisticated trend-following tool that replaces standard moving averages with a "Signal Dot" system. It is designed to minimize lag while maintaining smoothness, making it highly effective for identifying trend reversals in volatile markets like Gold.
How It Works (The Logic)
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Cosine Weighting: Unlike a Simple Moving Average (SMA) or Exponential Moving Average (EMA), this algorithm uses a Cosine function to calculate weights. This allows the indicator to "dampen" older data more effectively and react faster to recent price changes without the "whipsaw" effect of standard fast indicators.
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Point Filtering: It includes a Filter parameter (in points). If the calculated trend moves less than this amount, the indicator ignores the movement. This removes "flat" market noise.
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Color Logic:
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Lime Dots: Up Trend (Price momentum is positive).
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Red Dots: Down Trend (Price momentum is negative).
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Yellow/Hidden: Neutral or flat market (if filtering is high).
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Input Parameters Explained
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Length (10): The main period of calculation. Higher values = smoother, slower line. Lower values = faster, more sensitive.
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Filter (0): The noise filter.
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Set to 0: Captures every small trend change (good for scalping).
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Set to 50-100 (for Gold): Ignores small chops, only showing major trend shifts.
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ColorBarBack (2): A visual setting that helps "paint back" the dots to make the visual trend line look continuous.
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Deviation (0): Allows you to shift the line vertically by a percentage (useful for creating envelopes or bands, but usually kept at 0).
Why use this with your previous "Candle" indicator?
These two indicators work perfectly together as a Confluence System:
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The Candle Indicator (ATRStops): Shows you the Volatility Breakout.
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This Dot Indicator (ICF): Shows you the Momentum direction.
Signal Strategy:
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Strong BUY: The Candles turn Green AND the Dots turn Green.
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Strong SELL: The Candles turn Pink AND the Dots turn Red.
