CAM_Indicator

Description

The CAM_Indicator is a trend-detecting study based on coordinated usage of the Average Directional Index (ADX) and the Moving Average Divergence/Convergence (MACD) oscillator on the same chart. The CAM prefix stands for Coordinated ADX and MACD. The ADX study is used to assess the strength of the current trend, while the MACD oscillator is used to detect the direction of that same trend.

By default, all of the four boolean study plots are hidden: instead, the price plot is colored based on the conditions represented by each. These conditions are listed with the corresponding plot names, default price plot coloring, and possible interpretations below:

  • CAM_UP: When both ADX and MACD are rising, the study recognizes an upside momentum and colors the price plot green.
  • CAM_PB: When both ADX and MACD are declining, the study recognizes a possible pullback and colors the price plot yellow.
  • CAM_DN: When ADX is rising but MACD is declining, the study recognizes possible downtrend conditions and colors the price plot red.
  • CAM_CT: When MACD is rising but ADX is declining, the study recognizes a possible countertrend rally and colors the price plot blue.    

Input Parameters

Parameter

Description

adx length

Defines the period over which ADX is to be calculated.

macd fast length

Defines the period over which the fast component of MACD is to be calculated.

macd slow length

Defines the period over which the slow component of MACD is to be calculated.

paint bars

Defines whether or not to color the price plot according to the predefined algorithm (see the study description). 

Plots

Plot

Description

CAM_UP

A boolean plot: true when both ADX and MACD are rising; otherwise, false. Hidden by default.

CAM_PB

A boolean plot: true when both ADX and MACD are declining; otherwise, false. Hidden by default.

CAM_DN

A boolean plot: true when ADX is rising but MACD is declining; otherwise, false. Hidden by default.

CAM_CT

A boolean plot: true when MACD is rising but ADX is declining; otherwise, false. Hidden by default.

Further Reading

1."The CAM Indicator For Trends And Countertrends" by Barbara Star, PhD. Technical Analysis of Stocks & Commodities, January 2018.

Example*

*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.

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