Mastering Pine Script: A Comprehensive Guide for Mastering Pine Script Interview Questions

Pine Script, TradingView’s programming language, has become the best way for traders to make their own indicators and strategies quickly and accurately.

This Pine Script tutorial will give you a practical way to learn this complicated programming language by giving you useful examples to get you started. Whether you’re a new coder or a seasoned trader, this guide will help you get better at technical analysis.

I will teach you the basic ideas and advanced techniques of Pine Script using a collection of carefully chosen example scripts. This will allow you to create, test, and improve your trading hypotheses in a dynamic, real-time setting.

Identifying Price Channels For Scaling In To A Position

Let’s say we have an asset that we want to buy into over a period of time. We could dollar cost average in or use a vwap bot, or we could try to figure out fair value and then bid when the price is just on the edge of what it should be.

We will use moving averages and average true range, two of the most important tools in technical analysis, to do this. We’ve used this moving average before; the only thing that makes it different is that I want to use an EMA exponential moving average to make it more powerful. ATR, which stands for “average true range,” shows how volatile the price is and how far it is likely to move from its fair value.

Set up a strategy and decide on the moving average period, the longest time we will hold a trade, and a multiplier that tells us how far price needs to go below our fair value range before we enter a trade.

Note that for the multiplier we are defining a input. float rather than an integer which means we can use decimal values. We also set the step increments to 0. 1 so that this is reflected in the settings when the user clicks up or down.

We then calculate support and resistance bands using the moving average +- the atr * multiplier. We will now have a Bollinger band type of indicator, which looks much better on a chart than in a back test.

We plot all three lines on the chart for fair value (ema), support and resistance. One thing to note here is the color’s that I’m defining as RGBA (red, green, blue, alpha) values. There’s a nice color picker here if you want to create your own style.

Finally we set up the trade entry and two trade closes. The strategy will enter a trade when price goes below the support line. When price goes above resistance or 30 days have passed since the last time it went below support, the trade will end.

We have a long strategy that is only slightly profitable, and we’ve found places where the price is below its fair value. This helps us enter long-term positions over time.

Creating A Strategy From An Indicator

In this case, we’ll make a trend-following trading strategy and add a second simple moving average. If the fast moving average goes above the slow moving average, we are long because the price is going up. If it goes below the slow moving average, we are short.

On line 2, we list our name and overlay as a strategy instead of an indicator. This is the first thing people should notice.

Now let’s set the stage for our two main characters:

• shortMA is the short moving average, and its period is set to 30 by default.
• longMA is the long moving average, which has a period of 200 by default.

We create user input settings for these with input. int and then use the ta. sma function to set the values, then we plot both lines on the chart using the plot function. All of this is done in the exact same way as the previous example.

We go on to define our conditions for making trades using the ta. crossover and ta. crossunder functions. When the shortMA line crosses over the longMA, the longCondition signal goes off. This means the market is heating up and it might be time to get in. If, on the other hand, shortMA falls below longMA, it means that things may be cooling down and there’s more room for the price to go down. This is called the short condition.

Our script then puts these signals into action with the strategy. entry and strategy. close functions. The crossover is like a green light that says “Go long,” and the crossunder is like a red light that says “Stop the long and go short.”

This is what I call a “flip/flap” strategy: it goes from long to short depending on the market, but it always has a position in one direction. Let’s see what it looks like on a chart.

When we open the next tab, Strategy Tester (shown above), we can see how well this has worked in the past using historical data.

Take note that this simple strategy for following trends on the daily S We could change the moving averages to find points where profits rise, but that would mean that our model would be too good at what it does.

These backtests also aren’t perfect as we haven’t set any allowances for slippage, trading fees etc. You can write these values into Pine Script by hand, but I like to use the properties tab’s default settings, which are available for all strategies.

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