Theory:
The original indicator was described by B. Williams as fourth dimension - Trading Zone:
- If the current bars of AC and AO are trending up, it shows that the zone is up
- If the current bars of АС and АО down, it shows that the zone is down.
- If the bars of AC and AO are differently directed then the bar is colored grey.
This version:
The indicator is based on the following 3 indicators:
- Heiken Ashi
- smoothed (if the smoothing period is >1)
- regular (if the smoothing period is <=1)
- Accelerator Oscillator.
- Awesome Oscillator.
Comparing the slope of the smoothed Heiken ashi can filter out some of the false signals. The combined states and values of the 3 are producing zones and trade signals. This version is adding the smoothing possibility using one of the 4 average types :
- simple moving average
- exponential moving average
- smoothed moving average
- linear weighted moving average
