WVF - Oscillator

Another attempt on making use of CM-Williams-Vix-Fix-Finds-Market-Bottoms from Chris Moody - which is arguably one of the best indicator available on pine and tradingview platform. Every time I revisit this, I get new ideas on applying this method.

I have slightly altered formula to

highest(source)-source/highest(source)

from the original formula

highest(close)-low/highest(close)

Process is simple:

• Calculate WVF for OHLC values separately
  
• Calculate momentum on each of the WVF values based on distance from moving average
  
• Plot the candles based on OHLC momentum.
  
• Candle color depends on whether close, open and previous close. If close is higher than open and previous close, we get green coloured candles. If close is lower than previous close and open then we get red coloured candles. In all other cases, we will have silver candles.
  
• High/Low bands are calculated based on median of highest and lowest values of VixFix. We also plot median of close which can be used in some cases.
  

How to use this to find market bottom. Look for one of the below conditions:

• First red candle above high band - which signals momentum of vix fix is about to fall.
  
• First red candle above median line - can be used only if upward momentum of wvf candles are trending well.
  
• Crossunder of wvf candles under high band.
  

Possible exit scenarios

• Green WVF candle formed above WVF high line
  
• Entry is taken on first red candle above median line - but, candles turned green before WVF crossing under median line - may signal our thesis is wrong and price may drop further.
  

Some examples.