The idea after PZO is about finding a smoother alternative to Relative Strength Index (RSI) that measures momentum and strength of the price movement.

PZO depends on one condition: If today’s closing price is higher than yesterday’s one, then the closing price will have a positive value (bullish); otherwise it will have a negative value (bearish).

PZO Version 3 uses a volatility filter to find signals in trending markets only.

How it works

• PZO will give buy signals only if the trend filter is strong and price is trending to the upside.
• PZO will give sell signals only if the trend filter is strong and price is trending to the downside.
• If volatility is weak, any signal is ignored and no arrows appear on the chart.
• When PZO crosses its overbought level (whether dynamic or fixed), then the trend might reverse direction to the downside.
• When PZO crosses its oversold level (whether dynamic or fixed), then the trend might reverse direction to the upside.
• Default number of candles used in calculation is 14 candle and we suggest not changing it except for a good reason.
• Default calculation price is Close price but I added the ability to change it to other prices like High, Low, Open.

• As a leading oscillator, divergence between the price line and PZO could help you find a reversal area in trend direction faster.

Features

• Green PZO shadow for uptrend with high volatility.
• Red PZO shadow for downtrend with high volatility.
• No shadow means low volatility and no trade signals.
• Trend filter label that reads in percent between 0 and 100%.
• Users can switch between both Ordinary and Dynamic levels.
• Buy, Sell arrows to help identifying PZO oversold, overbought signals.
• Sound, email and mobile alerts depending on user choice.
• Well-designed style that user can control.

Parameters

1) PZO Line Inputs

• PZO Price: price used in calculation (Open, High, Low…). Default is Close.
• PZO Bars: number of bars or candles used in calculation. Default is 14 bars.
• PZO Color: Default is White.
• PZO Width: Default is two.

2) Shadows & Trend Filter Inputs

• PZO Style: Choose to show PZO main line with trend filter shadow around it. Default is to Show Shadow.
• Trend Filter Info Corner: Choose the corner to show Trend Filter Label. Default is right lower corner.
• Trend Filter Bars: Number of bars or candles used in Trend Filter calculation. Default is 100.

3) Levels Style Inputs

• Choose Levels Style: Users can choose between dynamic or fixed levels for the overbought and oversold conditions. Default is Dynamic.
• Over Bought Line Color: Default is Green.
• Midline Color: Default is White (midline appear in fixed style only).
• Over Sold Line Color: Default is Brown.
• Over Bought in Fixed Style: Default is +45.
• Midline in Fixed Style: Default is zero.
• Over Sold Line in Fixed Style: Default is -45.

4) Arrows Custom Inputs

• Show Signal: Choose to show or hide PZO Arrow Signals.
• Buy Arrow Color: Default is Yellow Green.
• Sell Arrow Color: Default is Chocolate.

5) alerts Setting

• alert: Users can choose to see an alert message when a new trading signal appears on the chart (default is yes).
• Send email: Users can choose to see an email to his inbox when a new trading signal appears on the chart (default is no).
• Send Notification: Users can choose to send push notifications to the mobile terminals (default is no).