Yang Trader is a smoothed moving average. The special adaptive smoothing makes the moving average more responsive to price. The indicator better describes the price direction compared to simple moving average, exponential moving average etc. Rising Yang Trader line shows uptrend and falling yang trader line show down trend. It can be used as trend filter. In an up tend price trade above the indicator line and in down trend price trade below indicator line.
Buy position can be opened when the Yang Trader line turns up and Sell position can be opened when the indicator line turns down. In trending markets, the indicator generates good signals. But in consolidating markets price usually trade above and below the indicator line and produce whip saws. Filtering the consolidating market is important to get good signals. The Yang Trader line can be used to filter consolidation also. When price trades around the indicator line, it is a consolidation phase. When price moves away from indicator line, it is beginning of trend.
The indicator parameters are indicator calculation period, moving average smoothing window and sensitivity of smoothing. Parameter values are changed in VTL editor.
yang_trader_indicator.zip (2.78 KB)