Average Sentiment Oscillator - MetaTrader 4 Script | Trading Script Download - MT4/MT5 Resources

Average Sentiment Oscillator

Momentum oscillator for average Bull/Bear percentage.

This is an improvement on the formula we use for the mood meter in FX Multimeter III. We recommend using it as a relatively accurate way to measure sentiment for a given candle period, as a trend filter or as an entry/exit signal.

It is a combination of two algorithms that are essentially the same but applied in different ways. The first one uses OHLC price analysis for call/put for each bar and then averages all the percentages in the period group of the bar (say 10) to give the final percentage value. The second treats the group of period bars as one bar and then uses the OHLC points of that group to determine the sentiment percentage. The first one is noisy but more accurate for intra-bar sentiment, while the second one gives smoother results and adds more weight to the price range. They can be used individually as Mode 1 and Mode 2 in the indicator settings, or in combination as Mode 0.

Combining the two formulas we get the following result, which is the default mode 0.

The blue line is Bull% and the red line is Bear%. Since they are both percentages of 100, they mirror each other. The higher line is the dominant emotion. The line crossing the 50% center line marks a shift in power between bulls and bears, which usually provides a good entry or exit signal, i.e. if the blue line closes above 50% of the last bar, then buy or exit the sell; if the red line closes above 50% of the last bar, then sell or exit the buy. These entries perform better when average trading volume is higher.

Changing the fixed minimum and maximum values ​​to 20 and 80 increases the oscillator width as shown. Any row can be hidden in settings.

Update: A coding error occurred during the first upload, which has now been corrected.

Attachment download

📎 ASO.mq4 (4.23 KB)

Source: MQL5 #10036