Scalper Pro SMI

Scalper Pro SMI

The Scalper Pro SMI is a technical indicator designed to assist traders in identifying potential overbought and oversold conditions in the market. It uses the Stochastic Momentum Index (SMI), which is a refined version of the Stochastic Oscillator, to provide more precise signals for price momentum.

How It Works:

• The SMI measures the distance of the current price from the midpoint of the highest and lowest prices over a specified period (lengthK, set to 50 by default).
• The indicator smooths these values using exponential moving averages (EMA) to reduce noise and improve accuracy.
• The resulting SMI values range between positive and negative values, indicating whether the market is trending toward overbought (high positive values) or oversold (high negative values) conditions.

Key Features:

1. Overbought/Oversold Levels:

   • Two horizontal lines at +40 and -40 represent the overbought and oversold regions, respectively.
   • When the SMI crosses above +40, the market might be overbought, suggesting potential selling opportunities.
   • When the SMI crosses below -40, the market might be oversold, indicating potential buying opportunities.

2. Gradient Visuals:

   • The script uses gradient fills to visually highlight overbought and oversold areas:
     • Blue gradient for the overbought zone (+40 to +120).
     • Red gradient for the oversold zone (-40 to -120).
   • This color-coding makes it easy to quickly assess the current market condition.

3. Center Line:

• A middle line is plotted at 0, which helps traders identify whether the SMI is in a positive (bullish) or negative (bearish) region.

How to Use:

• Buy signals occur when the SMI rises from the oversold region (below -40) and crosses the center line toward positive values, indicating potential upward momentum.
• Sell signals appear when the SMI drops from the overbought region (above +40) and crosses downward, indicating potential bearish momentum.
• The gradient fill provides a visual aid to quickly spot these zones and act accordingly.

Benefits for Users:

• Early signal detection: The SMI is a leading momentum indicator, helping traders identify potential reversals before they occur.
• Clear visual guidance: The gradient fills and color-coding make it easier to spot overbought and oversold conditions without needing to interpret complex charts.
• Customizable settings: Users can adjust the lengths for the smoothing periods to fit different assets or trading styles.

Scalper Pro SMI is ideal TradingView indicator for scalpers and day traders looking for quick entries and exits based on short-term price momentum.