Harmony Oscillator
The Harmony Oscillator is a combined Strength and Trend Oscillator that pulls over 50 points of data on each trading pair to show Strength and Trend; changes, reversal probability, overbought/oversold conditions, market deviations, and a detailed trading pair screener.
The Oscillator uses 10 different standardized indicators that are “Harmonized” arithmetically to give information about the Trend and Strength (Overbought/Oversold) conditions of a trading pair.
Oscillators are momentum indicators used in technical analysis, whose fluctuations are bounded by an upper and lower band.
When oscillator values approach these bands, they provide overbought or oversold signals as well as a Bullish or a bearish trend to traders.
Oscillators are often used to signal trend breakouts or reversals.
Some of the Features of this Indicator are:
- Combined Strength Band
- Combined Trend Band
- Detailed Dashboard
- Strength and Trend Divergences
- Reversal, Trend change, and Crossing Alerts
Dashboard Mode
The Dashboard Mode provides users with options to select between different modes such as Beginner and Advanced. These modes offer varying levels of complexity, helping traders understand strength and trend conditions across different trading pairs.
- Strength is calculated by an arithmetically harmonized combination of 5 oscillators that focus on Overbought and Oversold Conditions
- The Trend is calculated by taking Trending Moving Averages and Trend indicators and aggregating them on a balanced scale.
- The Beginner mode shows a simpler version of the Dashboard and is best used as a user browses between different trading pairs to find extreme strength or trend conditions.
- The Advanced mode shows detailed information about a specific trading pair that allows the user to look for specific changes in certain values indicating the start of a reversal of Price Action.
- Name
Dashboard Modes- Type
- mode
- Description
-
Off: Default setting, turns the Dashboard off.
-
Beginner: This dashboard breaks down the 10 different indicators used in the dashboard into 4 categories and shows 20 different values that are based on a rating system from 0 to 5 at increments of 1.
- Overbought and Oversold Ratings show how Overbought or Oversold a trading pair is on that timeframe on a scale from 0 to 5. The higher the value indicates that the trading pair is more overbought or oversold based on those different indicators.
- The Strength shown at the bottom left of the dashboard shows the aggregate strength of that trading pair. A higher Overbought Rating indicates that a downside reversal increases in probability. A higher Oversold Rating indicates that an upside reversal increases in probability.
- Downtrend and Uptrend Ratings show how the Trend is performing on that timeframe on a scale from 0 to 5. The higher the value indicates that the trading pair is Trending Up or Trending Down based on those indicators.
- The Trend shown at the bottom right of the dashboard shows the aggregate trend for that trading pair. A higher Downtrend Rating indicates that the trading pair is trending down instead of ranging. A higher Uptrend Rating indicates that the trading pair is trending up instead of ranging. The lower the scores indicates that the particular trading pair on that timeframe is ranging instead of trending.
-
Advanced: Provides detailed information about a specific trading pair, using a percentage value system rather than a 0-5 range.
- Oscillator Value - shows the Strength as a combined Overbought and Oversold rating in the form of a percentage. The higher the percentage means the Price is reaching higher levels of Overbought conditions whereas the lower the percentage indicates that the trading pair is reaching Oversold conditions. This is combined into the category called Strength which shows the general strength of that trading pair. Higher Strength indicates the strength of that Price Action moves whether to the upside or downside. The title under Oscillator titled Reversal calculates the Reversal chance to Strength where a higher value increases the probability of a Price Reversal based on Strength.
- Trend Value - shows the Trend as a combined Uptrend or Downtrend value in the form of a percentage. The higher the percentage means the Price is Trendinging up more than in a Range. The lower the percentage means the Price is Trending down more than in a Range. Values closer to 50% indicate that the Price is ranging and not trending. The Trend Value Category titled Trend shows the aggregate trend where a high percentage value indicates a general uptrend, a low percentage value indicates a downtrend, and a neutral or close to 50% value indicates that the Price is ranging. The title under Trend Value titled Reversal calculates the Reversal chance to Trend where a higher value increases the probability of a Price Reversal based on Trend.
- Metric / (10) - shows other metrics based on a 10-bar lookback period. The metrics shown are ATR (Average True Range), BBW (Bolling Band Values), Highs (10 bar highs), Lows, (10 Bar Lows), Volume, Change %, and HTF (high timeframe) Trend. These values specifically show extra information about the current Trading Pair based on a 10-bar look-back period. The high timeframe trend shows a multi-day trend, and green or red colored values indicate if those values are more “Bullish” or more “Bearish overall
The Dashboard in both Beginner and Advanced shows detailed information about each Trading Pair. The Beginner Mode is very effective as it simplifies values allowing a user to cycle between sever different trading pairs. The Advanced Mode is much more geared towards a high information trader who uses extra points of trading pair information to initiate trades.
-
- Name
Stacked Dashboard- Type
- boolean
- Description
Enables vertical stacking of the Dashboard layout instead of the default horizontal layout.
- Name
Bull Color- Type
- color
- Description
Changes the default color of Bullish indicators from Green to any other color.
- Name
Bear Color- Type
- color
- Description
Changes the default color of Bearish indicators from Red to any other color.
- Name
Strong Reversal- Type
- indicator
- Description
Strong Reversal shows on the indicator specific points that are points of reversal that are shown on the upper band or lower band depending on if it is a potential downside or upside reversal respectively. The default color of Yellow can be changed to any color.
- Name
Trend Change- Type
- indicator
- Description
Trend change is a signal that activates on the Trend Band and shows when the trend breaks from uptrend to downtrend or downtrend to uptrend. Trend change shows most specifically potential trend breaks which can be a leading indicator as the Bullish or Bearish trend breaks down. The default color of Aqua can be changed to any color.
- Name
Cross Change- Type
- indicator
- Description
Cross Change shows when Strength and Trend Bands cross. This may not always be a highly important indicator but it can be used to show an increase or decrease in the overbought or overlord conditions to up trending, down trending, or neutral Price Action. The default color is Purple and can be changed to any color.
Strength / Trend Settings
The Strength and Trend Bands of the Harmony Oscillator are created using specific different indicators that are arithmetically "harmonized". The Strength Line is shown as the thinner line on the Oscillator, moving quicker than the Trend band, indicating overbought or oversold conditions. The Trend Line, the thicker line, indicates more Bullish or Bearish Trends.
- Name
Strength Settings- Type
- settings
- Description
The Strength Band uses - Stochastic RSI, Relative Strength Index, Commodity Channel Index, Awesome Oscillator, and TTM Squeeze in its calculation Turning any of these different indicators on or off can be done by ticking or unticking the checkbox next to that indicator.
- Stochastic RSI
- Relative Strength Index
- Commodity Channel Index
- Awesome Oscillator
- TTM Squeeze
- Name
Strength Sensitivity- Type
- sensitivity
- Description
- This is related to the Sensitivity of the Strength Band and changes how smooth or how choppy the Strength Line will appear.
- The default setting is 5 and has a sensitivity range of 1 to 10 at .5 increments.
- Increasing the sensitivity will plot the Strength Line closer to the current Price Action and deviations will appear more frequently. Decreasing the sensitivity will plot the Strength Line further away from the current Price Action and deviations will appear less frequently.
- It is important to adjust sensitivity based on the current Price Action and based on the timeframe that is being used. Decreasing the sensitivity will have a “smoothing” effect on the Strength Line and is suitable when Price Action moves the Strength Line too erratically. Increasing the sensitivity will have a chopping effect on the Strength Line and is suitable when Price Action moves the Strength Line too slowly to be actionable.
- Name
Trend Settings- Type
- settings
- Description
The Trend Band uses - Moving Average Convergence Divergence, Directional Movement Index, Schaff Trend Cycle, Simply moving Averages, and Exponential Moving Averages in its calculation. Turning any of these different indicators on or off can be done by ticking or unticking the checkbox next to that indicator.
- Moving Average Convergence Divergence
- Directional Movement Index
- Schaff Trend Cycle
- Simply Moving Averages
- Exponential Moving Averages
- Name
Trend Sensitivity- Type
- sensitivity
- Description
This is related to the Sensitivity of the Trend Band and changes how smooth or how choppy the Trend Line will appear
The default setting is 5 and has a sensitivity range of 1 to 10 at .5 increments.
Increasing the sensitivity will plot the Trend Line closer to the current Price Action and deviations will appear more frequently. Decreasing the sensitivity will plot the Trend Line further away from the current Price Action and deviations will appear less frequently.
It is important to adjust sensitivity based on the current Price Action and based on the timeframe that is being used. Decreasing the sensitivity will have a “smoothing” effect on the Trend Line and is suitable when Price Action moves the Strength Line too erratically. Increasing the sensitivity will have a chopping effect on the Strength Line and is suitable when Price Action moves the Trend Line too slowly to be actionable.
Divergences
Divergence occurs when the price of a trading pair moves in the opposite direction of the Oscillator, serving as an early warning system for a potential price reversal. The Harmony Oscillator can show both Regular and Hidden Divergences on the Strength Oscillators, indicating potential momentum changes or trend breakdowns respectively.
Divergence is when the price of trading pair is moving in the opposite direction of the Oscillator. Divergence warns that the current price trend may be weakening, and in some cases may lead to the price changing direction.
There is Bullish and Bearish divergence. Bullish divergence indicates a move higher in the price of the asset is possible. Bearish divergence signals that a move lower in the asset is possible.
Bullish Regular divergence is the pattern that occurs when the price falls to lower lows, while the technical indicator reaches higher lows. This would be seen as a sign that market momentum is strengthening, and that the price could soon start to move upward to catch up with the indicator.
Bearish Regular divergence is the pattern that occurs when the price reaches higher highs, while the technical indicator makes lower highs. Although there is a bullish attitude on the market, the discrepancy means that the momentum is slowing. Therefore it is likely that there will be a rapid price decline.
While regular divergence often indicates trend reversals, hidden divergence tends to be a continuation indicator that shows when an opportunity to take advantage of a pullback in a trend may exist. This means that a trader can now choose to enter the market in the direction of the trend to profit from its continuation.
The Haromy Oscillator can show Regular and Hidden Divergences on either the Strength Oscillators. Strength Divergences usually show Momentum changes and can be an early warning sign of a reversal. Trend Divergences show a significant breakdown of the Trend and act as a confirmation of price reversal.
- Name
Divergence Modes- Type
- mode
- Description
- Strength: Calculates Regular or Hidden Divergences based on the Strength Line.
- Trend: Calculates Regular or Hidden Divergences.
Divergences are often used as an early warning system for a potential price reversal, we recommend always waiting for confirmation as Price breaks some form of structural support.
Harmony Oscillator Use
- The Harmony Oscillator visually shows Strength and Trend as it related to the current Price Action.
- The Upper and Lower bands on the Oscillator act as s sort of heat map and as Strength and Trend approach the Upper Band or Lower Band the colors will become more vibrant. As the Strength and Trend Bands move down the Brighter Red Colors indicate a potential Bottom on the current move. As the Strength and Trend Bands move up the Brighter Green Colors indicate a potential Top on the current move.
- Other significant signals are the Strong Reversal (yellow colored dots), Cross Change (purple colored dots), and Trend Change (aqua colored dots). A Bullish or Bearish shift in the trend is shown by a blue dot and depending on whether this is higher in the chart or lower in the chart can be a leading indicator for a Trend change, Strong Reversal dots will activate when there is a significant change in the movement, and Cross Change indicates Strength breaking above or below the Trendline.
- The more points of information better show changes in Strength and Trend
- As an example, if Strength and Trend are moving fully to the upside or downside then the user should look for other signals such as Cross Change, Trend Change, and Strong Reversal indicators. More of these signals together generate “Confluence” in that a general reversal is potentially occurring. Another factor to improve finding Reversals is Regular Divergences which can be leading indicators for a Price Reversal.