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Parabolic Regression Shapes Demo

This analyzer script opens up new possibilities of graphical analysis of price charts and is a useful addition to any trading strategy. It is mainly designed for manual trading, but the full version also contains means for integration with trading Expert Advisors. It does not perform trading operations.

Full version: https://www.mql5.com/en/market/product/19642


Method

The script builds the current non-linear trend and highlights the following price patterns based on quadratic regression

  • Linear Channel - a special case of a parabolic channel (quadratic regression channel)
  • Turn Up/Down - change in price direction
  • Trend weakening after movement Up and Flat/Down and Flat
  • moving up/down with acceleration after Flat and Up/Flat and Down price consolidation.

The script classifies trends based on their power, and assigns to each trend a power weight - Strong, Medium Strength, Slow or Almost Flat. Based on the last three detected patterns, the script displays data about the trend type and strength, also the patterns are displayed as channels on the chart. A separate color is used for each pattern.

Original features of the script:

  • analysis of the combination of the last two formed shapes, after which it gives a comment about the price behavior
  • defines the shape that is being formed and that you may expect in the near future
  • visual confirmation or disproof of signals from other indicators.


Restrictions in comparison with the full version

  • the number of bars used for detecting the shapes and calculating trend characteristics is set to 8 and cannot be modified
  • works only on M1
  • does not generate a prediction based on the latest and expected shape
  • does not create global variables


Peculiarities of usage

The script works on any currency pair.

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Version 2.0 - 2017.02.23
Added a traffic lights image, which shows the expected trend type.
The demo version only works on the Н1 time-frame with the 120-bar period.