Long Term Heiken Ashi Candlestick Oscillator (HACOLT)

Notes:

These indicators and concepts are specifically designed for TradingView.com

Overview

The Vervoort LongTerm Heiken-Ashi Candlestick Oscillator is a technical analysis indicator that is used to identify trends and potential trading opportunities in financial markets. The indicator is based on Heiken-Ashi candlesticks, which are a modified form of traditional candlesticks. The Heiken-Ashi candlesticks use a moving average of the price data to smooth out the price movements and make the trend easier to identify. The Vervoort LongTerm Heiken-Ashi Candlestick Oscillator is calculated using a combination of the Triple Exponential Moving Average (TEMA) and the Heiken-Ashi candlesticks. The TEMA is used to smooth out the price data and provide a longer-term trend. The Heiken-Ashi candlesticks are then used to identify the shorter-term trends. The oscillator generates buy signals when the price is rising and sell signals when the price is falling. The signal is confirmed when the Vervoort LongTerm Heiken-Ashi Candlestick Oscillator crosses above or below the zero line.

How to Trade

You can use the HACOLT when the histogram crosses above the zero line, in this case it suggests a bullish trend, indicating a buying opportunity. Conversely, when the HACOLT crosses below the zero line, it suggests a bearish trend, indicating a selling opportunity. In addition the HACOLT histogram can be used to confirm the trend. When the histogram bars are positive and increasing, it confirms a bullish trend. Conversely, when the histogram bars are negative and decreasing, it confirms a bearish trend.

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How to Calculate

The Vervoort LongTerm Heiken-Ashi Candlestick Oscillator is calculated using the following steps:

1. Calculate the Heiken-Ashi Open: (previous Heiken-Ashi Open + previous Heiken-Ashi Close) / 2, or the current price if it's the first bar
2. Calculate the Heiken-Ashi Close: (Open + High + Low + Close) / 4
3. Smooth the Heiken-Ashi Close using a Triple Exponential Moving Average (TEMA) with a given period length
4. Calculate the smoothed TEMA value of the High-Low/2 using the same period length as in step 3
5. Smooth the TEMA value of the smoothed Heiken-Ashi Close using the same period length as in step 3
6. Determine whether the current bar is a short candle (i.e. the absolute difference between Open and Close is less than the candle size factor times the difference between High and Low)
7. Determine whether to keep the current bar in the uptrend, downtrend or neither based on the following conditions:

• Uptrend: Heiken-Ashi Close is greater than or equal to Heiken-Ashi Open, and either the current bar's Close is greater than or equal to the Heiken-Ashi Close, or the current bar's High is greater than the previous bar's High, or the current bar's Low is greater than the previous bar's Low, or the smoothed TEMA value of High-Low/2 is greater than or equal to the smoothed TEMA value of the smoothed Heiken-Ashi Close
• Downtrend: Heiken-Ashi Close is less than Heiken-Ashi Open, and either the current bar's Close is less than the Heiken-Ashi Close, or the current bar's Low is less than or equal to the previous bar's Low, or the current bar's High is less than the previous bar's High, or the smoothed TEMA value of High-Low/2 is less than the smoothed TEMA value of the smoothed Heiken-Ashi Close
• Neither: the current bar is a short candle and its High is greater than the previous bar's Low, or its Low is less than the previous bar's High

8. Determine whether there is an upward trend change, downward trend change or no change based on the current and previous trend
9. Assign a value of 1 for upward trend change, -1 for downward trend change, and 0 for no change
10. Plot the oscillator as a column chart with green for upward trend, red for downward trend, and blue for no change.