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Interceptor is a professional indicator of quantity and cost extremes.

Interceptor unites four kinds of normalized indicators in one algorithm, determining cost extremes that lead to corrections and trend reversals. its algorithm relies mainly on a combination of Accumulation/Distribution, On Balance Volume, Money Flow Index and Relative Strength Index.

that the first parameter (interceptor_depth) defines the normalization interval in pubs for the analysis of Accumulation/Distribution and On Balance Volume. You want to check as many distinct values of interceptor_depth as potential . in particular, I recommend trying 75, 150, 250, and 460. remember: the lower the parameter value (normalization interval), the faster the indicator’s response to changes in volume and price.

The second parameter (total_bars) determines the number of visible bars in the indicator window. The fewer bars, the less resources are required to build the indicator line (and the faster it works, especially when trading on multiple pairs, for example, on a virtual server ‚Äď a similar situation is shown in one of the screenshots below).

The following four parameters determine the A/D, OBV, MFI, and RSI weights. You can fine-tune the accuracy of the Interceptor for each currency pair, stock, commodity, etc., as well as the timeframe, using the weight of each component of the algorithm and adjusting the levels. Individual components of the algorithm can be completely disabled by setting the parameter weight to 0. For example, if we want to analyze only changes in volume, we need to set rsi_weight to 0.

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The next two parameter blocks contain settings for the Money Flow Index and Relative Strength Index. In both cases, the indicator algorithm is affected only by the period (mfi_period and RSI_Period). All levels (mfi_low_level, mfi_high_level, rsi_low_level, and rsi_high_level) determine the final appearance of the indicator line by filtering out divergent RSI and MFI values and setting the Interceptor line to a neutral level of 50. For example, with mfi_low_level=20, mfi_high_level=80, rsi_low_level=30, and rsi_high_level=70, the Interceptor line will only be above 50 if the MFI value exceeds 80 and the RSI is above 70. The indicator line will be below 50 only if the MFI value falls below 20 and the RSI falls below 30. To completely disable filtering with levels, set mfi_low_level to 100, mfi_high_level to 0, rsi_low_level to 100, and rsi_high_level to 0. However, I recommend using at least 30/70 or 40/60 levels to get only meaningful signals. For the RSI, you can also set the type of price used. The default is the Close price (closing price).

The last set of parameters controls the alerts. There are several types of alerts: alerts in the MetaTrader terminal (shown in one of the screenshots), push notifications for mobile devices (smartphones, tablets), emails (for example, from a virtual server) and audio alerts in MT4. You can set the minimum and maximum levels for alerts (send_alerts_below_level and send_alerts_above_level), as well as the delay period between the previous and subsequent alerts (wait_candles_between_alerts). The last parameter (use_only_closed_candles_for_alerts) determines whether the alert should be activated immediately when the indicator crosses the minimum or maximum level (send_alerts_below_level and send_alerts_above_level) if False or only after the candle closes.

With the default settings, I advise buying only if the indicator line is below 20 or 15 and selling only if the indicator line is above 80 or 85. These levels depend on the settings of all system components on a specific currency and timeframe, but I suggest changing the parameters depending on the currency pair.

By default, after running the indicator on the chart, you will see one solid line (dark blue) and four dotted lines in the indicator window: the normalized Accumulation/Distribution line (green), the normalized On Balance Volume line (orange), the Relative Strength Index line (cornflowerblue ) and the Money Flow Index line (brown). All colors are customizable. If you want to leave only the main line, set the colors of all lines except the main one (dark blue) to None.

When developing a trading strategy based on the indicator, I advise you to wait for the next candle as confirmation. Before opening a new order, the following should be formed:“Absorption” or “Doji” (or something similar), after which the price should go in the opposite direction. If you need more tips on using the indicator, write to me.

Remember, no one else is responsible for any investment decisions you make.

Good luck!

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Published

04 December 2015

Updated

01 September 2016

Current Version

2.0

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Roberto Cesar Ruarte Pedraza December 29, 2020 10:53 am
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cvelasco56 Velasco December 29, 2020 10:53 am
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Great index Dominik, fine work! Keep this up! Highly suggested.

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