So I’m having some trouble understanding how exactly the TTM Trend indicator (from John Carter’s book Mastering the trade) works… How the values that determine the color of the candlestick are calculated to be more exact.
So in the book JC writes:
If the average price of the prior six bars is in the upper half of that trading range, then it’ll paint the bar blue for bullish pressure.
So my understanding is, you compare the average price of the prior six bars to the midpoint of the trading range of that same 6 bars, and determine which direction the pressure is going. Ok fair enough, but 3 questions arise…
1) Average price of what? Do I simply take the average of the Close for the previous 6 bars? Or do I take the average of each bar ((H+L)/2), add them all up, and divide them by 6?
2) By “trading range”, does he mean ((Highest High in the last 6 bars + Lowest Low in the last 6 bars) divided by 2)?
3) So this indicator doesn’t take any values from today’s bar? Everything comes from the prior 6 bars?
I read on but, JC did not go into specifics in his book.
But then I found this video of him explaining how it worked in a video from like 8 years ago.
On one of his slides explaining the TTM Trend indicator, it said “If average closing price of the prior six bars is in the upper 50% channel of the trading range then…”.
So this suggests that he simply averages the closing price of the last 6 bars.
So to check if my understanding was right, I went to trading view and found this free indicator called “(JS) TTM Trend-Candles”, slapped it on my chart, used a spreadsheet and calculated the values myself, and checked to see if the color of the bars aligned. And… It did not (some parts where I got bullish color, the chart showed bearish color, and so on).
For the “average price” I simply averaged the prior 6 bars. For the “range”, I used the formula mentioned above in 2). Since the source code was hidden, I could not check the function this indicator used. I looked around online for a while but, couldn’t find anything credible… I’m trying to backtest a strategy using excel so, it’s important that I get these formulas right so…
So my questions are…
a) As to how this indicator works, am I understanding it correctly?
b) Does anyone have a source code for a TTM Trend indicator? (There’s only one on TV and it’s hidden so…)
Any help would be appreciated. Thank you!
So in the book JC writes:
If the average price of the prior six bars is in the upper half of that trading range, then it’ll paint the bar blue for bullish pressure.
So my understanding is, you compare the average price of the prior six bars to the midpoint of the trading range of that same 6 bars, and determine which direction the pressure is going. Ok fair enough, but 3 questions arise…
1) Average price of what? Do I simply take the average of the Close for the previous 6 bars? Or do I take the average of each bar ((H+L)/2), add them all up, and divide them by 6?
2) By “trading range”, does he mean ((Highest High in the last 6 bars + Lowest Low in the last 6 bars) divided by 2)?
3) So this indicator doesn’t take any values from today’s bar? Everything comes from the prior 6 bars?
I read on but, JC did not go into specifics in his book.
But then I found this video of him explaining how it worked in a video from like 8 years ago.
On one of his slides explaining the TTM Trend indicator, it said “If average closing price of the prior six bars is in the upper 50% channel of the trading range then…”.
So this suggests that he simply averages the closing price of the last 6 bars.
So to check if my understanding was right, I went to trading view and found this free indicator called “(JS) TTM Trend-Candles”, slapped it on my chart, used a spreadsheet and calculated the values myself, and checked to see if the color of the bars aligned. And… It did not (some parts where I got bullish color, the chart showed bearish color, and so on).
For the “average price” I simply averaged the prior 6 bars. For the “range”, I used the formula mentioned above in 2). Since the source code was hidden, I could not check the function this indicator used. I looked around online for a while but, couldn’t find anything credible… I’m trying to backtest a strategy using excel so, it’s important that I get these formulas right so…
So my questions are…
a) As to how this indicator works, am I understanding it correctly?
b) Does anyone have a source code for a TTM Trend indicator? (There’s only one on TV and it’s hidden so…)
Any help would be appreciated. Thank you!
