Moving Average Bounce

The Moving Average Bounce indicator for NinjaTrader 8 is a powerful tool designed to identify potential trade setups based on price action around a moving average. It helps traders spot instances where the price bounces off the moving average, indicating potential reversals or continuations of trends.

The indicator provides two setup types: "Touch" and "Close."

Setup Type: Signal on "Touch"

The "Touch" setup type is specifically designed for traders who wish to combine the Moving Average Bounce indicator with other indicators or strategies. With this option, the indicator generates a signal when the price touches the moving average. Traders can specify the number of bars (Validity Bars) after the touch that the signal remains active. This setup type allows traders to use the indicator as a confirming tool, waiting for a touch of the moving average before considering other indicators or criteria for taking action.

Setup Type: Signal on "Close"

The "Close" setup type is suitable for traders who prefer a more definitive signal based on the price closing below or above the moving average. With this option, the indicator provides signals when the price closes below or above the moving average, depending on the desired trade direction.

• For Long Trades: The indicator waits for the price to close below the moving average. Once it closes below, the indicator monitors subsequent bars to identify a close back above the moving average. The bar that closes back above becomes the signal bar for long trades. Traders can define the number of bars (Validity Bars) after the close below to monitor for the close back above.
• For Short Trades: Alternatively, the indicator can be set to identify short trade setups where the price closes above the moving average and then below. The indicator waits for the price to close above the moving average. Once it closes above, the indicator monitors subsequent bars to identify a close back below the moving average. The bar that closes back below becomes the signal bar for short trades. Traders can again define the number of bars (Validity Bars) after the close above to monitor for the close back below.

By utilizing the "Signal on Close" setup type, traders can effectively capture trade opportunities based on clear closing price action relative to the moving average. This setup type provides a more definitive signal for potential trade entries or exits, allowing traders to react to confirmed price movements and capitalize on trend reversals or continuations.

Traders can customize various parameters to fine-tune the Moving Average Bounce indicator according to their trading strategies and preferences. The indicator allows customization of the moving average period, moving average type, the number of bars required for the price to stay away from the moving average, signal duration, and plot offset. Additionally, the indicator provides parameters related to the minimum gap required, such as the number of bars, minimum ticks, minimum ATR multiple, minimum range percent, ATR period, and Donchian Channel period. These parameters provide flexibility to adapt the indicator to various market conditions and trading preferences.

The Moving Average Bounce indicator empowers traders to effectively identify potential bounce setups around a moving average, providing valuable insights for trading decisions. Whether used for long or short trades, and whether combined with other indicators or as a standalone tool, this indicator helps traders seize trading opportunities with enhanced precision.

Base Parameters:

• MA Period (int): This parameter allows you to specify the period or length of the moving average. It determines the number of bars used to calculate the moving average.
• Moving Average Type (TdjMovingAverageProperties.MovingAverageType): Choose the type of moving average you prefer, such as Simple, Exponential, or Double Exponential. The moving average type affects the calculation methodology.
• Bars Not Touching (int): Set the number of bars required for the price to stay away from the moving average. This condition must be met for the indicator to consider a potential bounce.
• Setup Type (TdjMovingAverageBounceProperties.SetupType): The indicator provides two setup types:
  • a. Signal on "Touch": With this option, the indicator generates a signal when the price touches the moving average. Traders can specify the number of bars (Validity Bars) after the touch that the signal remains active.
  • b. Signal on "Close": This option waits for the price to close below the moving average. Once it closes below, the indicator monitors subsequent bars to identify a close back above the moving average. The bar that closes back above becomes the signal bar. Traders can define the number of bars (Validity Bars) after the close below to monitor for the close back above.
• Validity Bars (int): Specify the number of bars to generate a signal after the price meets the setup conditions. It determines the duration of the signal.
• Plot Offset (Ticks) (int): Adjust the plot offset to align the indicator's plot with the price chart. It allows for visual customization and ensures clear visualization.

Minimum Gap Parameters:

• Bars Not Touching (Min Gap) (int): Determine the minimum number of bars required for the price to stay away from the moving average to satisfy the gap condition.
• Min Ticks (int): Set the minimum gap size in ticks between the low or high of a bar and the moving average to satisfy the gap condition.
• Min ATR Multiple (double): Specify a multiple of the Average True Range (ATR) to define the minimum gap size. It allows for dynamic gap size based on market volatility.
• Min Range Percent (int): The "Min Range Percent" parameter determines the minimum percentage deviation between the low of a bar and the moving average to satisfy the gap condition. To calculate this deviation, the indicator utilizes the Donchian Channel. The Donchian Channel measures the price range by subtracting the lower channel value from the upper channel value. The gap between the low of a bar and the moving average must be at least the specified percentage of this price range to fulfil the gap condition. By adjusting the "Min Range Percent" parameter, traders can control the minimum percentage deviation required for a potential bounce.
• ATR Period (int): Set the period or length of the Average True Range (ATR) indicator used in calculating the dynamic gap size based on volatility.
• DC Period (int): Specify the period or length of the Donchian Channel (DC) indicator used in calculating the dynamic gap size based on the range.

• IndicatorSignalUp (double): When a bar meets the conditions set by the indicator parameters, the IndicatorSignalUp plot will have a value that is equal to the low of the bar minus the Plot Offset number of ticks.
• IndicatorSignalDown (double): When a bar meets the conditions set by the indicator parameters, the IndicatorSignalDown plot will have a value that is equal to the high of the bar plus the Plot Offset number of ticks.
• SignalUp (bool): same as IndicatorSignalUp, but instead of having a double type, we have a bool type. Its value is true when the conditions are met and false when they are not.
• SignalDown (bool): same as IndicatorSignalDown, but instead of having a double type, we have a bool type. Its value is true when the conditions are met and false when they are not.