Fusion Markets

Contents

1. What Is PineScript
2. Getting Started
3. PineScript Syntax
4. Developing Strategies
5. Backtesting Your Strategy
6. Common Pitfalls to Avoid
7. Conclusion

What Is PineScript






PineScript is a coding language developed by TradingView specifically for creating indicators and strategies on their platform. It is similar to other programming languages, but with its own unique syntax and functions tailored for trading analysis.  







Don't let the idea of coding scare you – the syntax is similar to other popular languages like JavaScript and C++, making it easy for traders with coding experience to pick up. Plus, with the large online community and resources available, you can easily learn and use Pinescript in a matter of days. 










Getting Started




To start using PineScript on TradingView, you will need a TradingView account. If you don't have one yet, go ahead and sign up – it's free! Make sure to connect it to your Fusion Markets account. Once you have an account, navigate to the "Pine Editor" tab on the top menu bar. 







Next, open the PineScript editor on TradingView and choose from a variety of templates or start from scratch. The editor also includes a preview function that allows you to see how your code will look on a chart in real-time. 







You will also need to have a basic understanding of coding concepts such as variables, functions, and conditional statements. If these terms sound foreign to you, don't worry – we’ve got you covered!  







 





PineScript Syntax




At the core of Pine Script's functionality is its syntax, which forms the building blocks of any script. Its power lies in its simplicity and flexibility, enabling users to craft a wide array of technical analysis tools.  




Here are a few main things that you should know: 







Variables and Data Types 




Variables in Pine Script play a crucial role in storing and manipulating data. They come in different types such as integers, floats, bools, strings, and series. Variables in PineScript are declared using the "var" keyword, followed by the variable name and an equal sign (=) before the value assigned to it. For example: `var myVariable = 10;`.   







Understanding these data types is fundamental. For instance, a series type is used for time series data, enabling the creation of moving averages, oscillators, and more. 












In this example, ` length` is an integer variable that stores the input value for the length of the moving average, and ma is a series variable that stores the moving average data. 

 







Functions and Operators 




Pine Script offers an extensive range of built-in functions and operators for performing calculations and executing specific actions. Functions in PineScript start with the "study" keyword, followed by the name of the function and parentheses. For example: `study("My Custom Indicator")`   







Functions like ` sma() ` (simple moving average) and ` plot() ` aid in technical analysis by computing indicators and displaying plotted lines on the chart.  















Here, ` sma() `, ` stdev() `, and arithmetic operators (` + `, ` ` -) are used to compute Bollinger Bands by calculating the moving average, standard deviation, and upper and lower bands. 

 










Conditional Statements and Loops 







Conditional statements and loops are essential for decision-making and iterative processes. Using ` if-else` statements and ` for ` loops, traders can create dynamic conditions and repetitive actions within their scripts. 















In this snippet, an RSI (Relative Strength Index) script displays the RSI values along with overbought and oversold levels. Conditional statements can be applied to trigger alerts or make trading decisions based on RSI levels crossing certain thresholds. 




 

Understanding variables, functions, conditional statements, and loops is pivotal for crafting effective indicators and strategies. With a solid grasp of PineScript syntax, traders can develop personalised trading tools, enhancing their analysis and decision-making in the financial markets. To learn more about the syntax, please refer to the PineScript language manual. 

 







Creating Custom Indicators 







One of the most popular uses for PineScript is creating custom indicators. This can range from simple moving averages to complex algorithms that incorporate various technical analysis tools. The possibilities are endless, and with some creativity and testing, you can come up with unique and effective indicators for your trading strategy. 







 

Now, let's walk through the process of creating a simple moving average (SMA) indicator using Pine Script. An SMA is a popular trend-following indicator that smoothens price data to identify the underlying trend. 















In this script: 




• We specify the title, short title, and overlay properties for the indicator. 

• We create an input variable, length, that allows the user to customise the length of the SMA. 

• We calculate the SMA using the sma() function. 

• We use the plot() function to display the SMA on the chart. 

 




This is just a basic example to get you started. Why don’t we take it up a notch? 
 




Let’s create a strategy that uses the 200 Exponential Moving Average (EMA) as a basis for making buy (long) signals when the price crosses above this moving average. 















Let's break down the code: 







• Setting up Strategy Parameters: The script sets the strategy's title, short title, and indicates that it's an overlay on the price chart using strategy(). 

• Calculating the 200 EMA: It defines a 200-period EMA (ema200) based on the closing prices. 

• Plotting the 200 EMA: The script plots the 200 EMA on the chart in blue. 

• Identifying EMA Crossover: It calculates the points where the closing price crosses above the 200 EMA using ta.crossover() and assigns these points to the variable emaCrossover. 

• Strategy Entry Conditions: When the crossover happens (i.e., when the closing price crosses above the 200 EMA), the strategy generates a "Buy" entry signal using strategy.entry() with the condition when=emaCrossover. 

• Plotting Buy Signals: The script uses plotshape() to plot small green triangles below the price bars where the crossover condition is met. 

 




Here’s how it looks on a chart: 









EURUSD Weekly Chart 







Kindly be aware that the script provided above serves as an example, and it will require adjustments to align with your particular objectives. 

 

In summary, this script creates buy signals (represented by green triangles below the price bars) whenever the closing price crosses above the 200-period Exponential Moving Average. This strategy assumes that such crossovers might indicate a potential upward trend and trigger a buy action. 

 

As you can see, Pine Script is incredibly versatile, and you can create highly sophisticated indicators with complex logic to match your trading strategy.












Developing Strategies

Aside from creating indicators, PineScript also allows you to develop fully automated trading strategies. By combining different technical indicators and conditions, you can create a set of rules for buying and selling that can be backtested and optimised for maximum profitability. This feature is especially beneficial for traders who prefer a systematic approach to trading. 




 

Tips and Tricks 




• Start with a clear and well-defined trading strategy: Before jumping into coding, it's essential to have a solid understanding of your trading approach and goals. A clear strategy will make it easier to translate it into code and avoid any confusion during development.  

• Use proper risk management techniques: No matter how well-crafted a strategy is, managing risk is crucial in trading. PineScript offers functions for setting stop-loss and take-profit levels, as well as position sizing based on risk percentage. Utilising these functions can help minimise losses and maximize gains.  

• Test and refine: Developing a successful trading strategy takes time, patience, and continuous testing. Backtesting with PineScript allows for this refinement process, where traders can analyse the results of their strategies and make necessary adjustments until it meets their expectations.  












Backtesting Your Strategy




Once you've written your Pine Script, it's time to test its performance in various market conditions. TradingView makes this process seamless. You can choose the time frame and historical data you want to test your strategy against. The platform will then run your script against that data, showing you how your strategy would have performed. It helps identify any flaws or weaknesses in the strategy and allows for adjustments before risking real capital. This can significantly increase the chances of success in live trading. 














Common Pitfalls to Avoid




While Pine Script provides endless possibilities for developing your strategies, there are common pitfalls to avoid: 







• Over-Optimisation: Tweaking your strategy too much based on past data can lead to over-optimisation. Your strategy may perform well historically but fail in real-time trading. 

• Neglecting Risk Management: Not paying enough attention to risk management can lead to significant losses. It's crucial to protect your capital at all costs. 

• Lack of Patience: Don't rush into live trading. The more time you spend testing and refining your strategy, the better it will perform in the long run. 

• Ignoring Market Conditions: Markets are not static, and what works in one type of market might not work in another. Keep an eye on market conditions and be ready to adapt. 











Conclusion




There's a saying in the world of forex trading - "The trend is your friend". And with PineScript, you can easily identify and follow market trends with custom indicators that suit your trading style. From simple moving averages to complex multi-indicator strategies, PineScript allows you to create and test different approaches until you find the one that works best for you. 




But PineScript is not just limited to forex trading. It can also be used in other markets such as stocks and cryptocurrencies. So, if you're a multi-asset trader, learning how to use PineScript can greatly benefit your overall trading strategy and performance. 




Furthermore, PineScript is constantly evolving and being updated with new features. This means that there's always something new to learn and experiment with, keeping your trading skills fresh and adaptable. 




And don't be intimidated by coding - embrace it with PineScript and see how it can enhance your trading. Who knows, you may even discover a hidden passion for programming along the way! 

Navigating the TradingView Interface

After setting up your account, the next step is to familiarise yourself with the TradingView platform. The platform is intuitive and straightforward to navigate, with a wide range of features and tools neatly organised for ease of use. 

Homepage Overview: The homepage provides an overview of the financial markets. On the right-hand side, you'll find the news feed, watchlist, and trading panel. 

You can customise it by adding watchlists and widgets for specific assets or markets you're interested in. 

 

The TradingView platform facilitates the analysis of market data through a variety of chart types, conventionally categorised into two groups. 

The first category consists of traditional charts, constructed based on time, including: 

• Bars 

• Candles 

• Hollow candles 

• Columns 

• Line 

• Line with markers 

• Step line 

• Area 

• Baseline 

• High-low 

The second category comprises charts constructed solely based on price changes, such as: 

• Heikin Ashi 

• Renko 

• Line break 

• Kagi 

• Point & figure 

• Range 

Users can easily select their preferred chart type from the drop-down menu located on the top toolbar. 

Indicators: TradingView offers a robust selection of over 100 indicators. You can add these to your charts to analyse price movements, trends, and other essential data. Popular indicators include Moving Averages, Relative Strength Index (RSI), and Bollinger Bands. Additionally, users have the flexibility to craft custom indicators in JavaScript through the platform's API. This API empowers users to design a diverse range of indicators, incorporating various plot types, styles, colours, and mathematical functions. 

Within the user interface, individuals can seamlessly integrate custom indicators onto the chart. Adjustments to specific indicator parameters can be made using the dedicated Indicators and Settings dialog. It's important to note that while users can add custom indicators and modify certain parameters through the UI, the platform does not allow the creation of entirely new indicators or the modification of existing code for pre-existing ones. 

 

Alerts: TradingView alerts provide instantaneous notifications when the market aligns with your personalised criteria. For instance, you can set an alert such as, "Notify me if Tesla surpasses $250." All users have access to various notification options, including visual pop-ups, audio signals, email alerts, email-to-SMS alerts, and PUSH notifications directly sent to your mobile device. 

You can also set alerts on indicators, strategies, and drawing tools and even customise your trigger settings. 

Drawing Tools: TradingView's drawing tools offer a versatile range of functionalities, allowing users to make annotations, insert comments, highlight trends and patterns, conduct measurements and forecasts, and calculate price levels. These tools are conveniently positioned on the left panel of the chart, providing easy access for users to enhance their analytical capabilities and visually communicate insights. Whether you need to jot down notes, emphasise specific points, or perform detailed analyses, TradingView's drawing tools allow users to interactively engage with charts and convey valuable information effectively. 

Watchlists: Watchlists are located on the right side of the screen. You can create a new watchlist by clicking on ‘Create new list' or import the existing one to keep track of your favourite assets. Please note that the import option is only available for Pro accounts. To add assets to your watchlist, click on the '+’ or ‘X’ if you wish to remove it. 

Social Features: The ability to publish and share your trading ideas is a pivotal feature, facilitating collaborative learning. You can exchange trade-related information or engage in discussions about current market conditions with fellow traders who share your level of experience or interact with more seasoned traders.  

For a dose of inspiration, navigate to the "Community" section in the header menu and select 'Trade Ideas.' Here, you have the option to explore trade ideas by specific assets, follow the curated selections from editors, or delve into the trending ideas on the platform. 

Every member of the community has a badge. Let’s go through them one by one: 

• MOD - The red MOD badge is assigned to TradingView moderators, distinguishing them within the community. This badge serves as an additional layer of security for all members, enabling easy identification of moderators. In case you have inquiries or require assistance, this badge helps you discern who is a moderator and who isn't. 

• The BROKER badge, available in blue (platinum), gold, or silver, is designated for broker accounts on TradingView. Members adorned with this badge are exclusively recognised as official broker representatives. The broker page offers comprehensive details on Terms of Use and reviews from live-account owners. 

• WIZARD - The green WIZARD badge is awarded to Pine Script™ Wizards, who are exceptional programmers proficient in Pine Script™—the language employed for developing indicators and strategies on TradingView. These Wizards make noteworthy contributions to the community by assisting numerous traders with their code-related queries. Read our blog to learn how to use PineScript for trading on TradingView.

• TradingView official accounts, along with badges for TradingView employees, feature a distinctive blue badge adorned with a TV logo. This badge serves as a visual identifier to distinguish and authenticate the official presence of TradingView and its staff within the community. 

The conversations unfold in real time, allowing you to connect with individuals trading the same instruments as you. You can share links to your charts, articulate your trading concepts, and receive feedback and comments to foster mutual growth and prosperity in the trading community. The overarching goal is to enhance your trading and investing skills by gaining insights from the actions of others.  

Trading on TradingView

Understanding how to correctly place trades on TradingView is crucial. One of its standout features is Pine Script, a domain-specific programming language that allows users to create custom indicators, strategies, and scripts. Visit our blog [LINK] to learn how you can leverage PineScript for trading on TradingView. 

Once you have logged into your trading account, you'll notice four tabs at the bottom: Positions, Orders, Account Summary, and Notifications log. The Orders tab conveniently provides a filter for all possible order statuses. Each column in the Orders tab displays key values from the Account Summary, represented by a grey line. 

At the top-right of the Trading Panel, you'll find a menu containing main settings for trading, a button for disconnecting trading, and an option for selecting another broker. Your account ID is prominently displayed, and if it's a multi-account ID, a dropdown allows you to switch between sub-accounts.

 

To place an order, you have several options. You can do so through the context menu on the chart or trading panel, the Plus menu on the chart, or by using the Buy/Sell buttons. The easiest way is to click on ‘Trade’ on the trading panel, and a new window will pop up.  

When accessing your TradingView execution platform, the Buy/Sell buttons are prominently displayed directly on your chart. In the chart's centre, the market spread is visible, and on the right, you have the option to adjust the number of contracts. Initiating a Buy or Sell order opens the order execution window. 

Order Placement: Upon clicking Buy or Sell, you initiate the opening of the execution window and gain the ability to adjust the parameters of your trade before finalising the execution. Let's guide you through each parameter individually: 

• Account: If you have multiple accounts, you can seamlessly switch between them at this point. 

• Side: Indicate whether your order is a buy or a sell order. 

• Type: Select from the following order types: Market, Limit, Stop, or Stop Limit.  

• Limit: This order triggers when the price reaches the specified limit or a better price. Note that in situations of imbalance between buyers and sellers, limit orders may not be immediately filled. 

• Market: This order gets filled immediately at the best available current price. 

• Stop: A stop order that converts into a market order once the specified price is reached. 

• Stop Limit: Similar to a stop order, this type converts into a limit order after the specified price is hit. 

• Duration: You have the flexibility to specify the duration of your order, and TradingView offers various options: 
  

• GTC (Good Till Cancelled): The order persists and stays open until explicitly cancelled by the trader. 

• GTD (Good Till Day): The order remains active until the specified date set by the trader.

• Symbol: You can modify the symbol (market) at this point. 

• Quantity: Adjust the quantity of contracts you wish to buy or sell. 

Managing Positions and Live Trades on TradingView

After executing a trade, the details of the trade become visible on your chart. TradingView displays the current Profit/Loss and the quantity of your position. 

Additionally, it provides options to reverse your trade, converting a buy trade into a sell trade, or to close your position with a single click. In the Trading Plan section at the bottom of the screen, you can monitor your current positions under "Positions" and access all your active trades with supplementary data. Closing positions can also be done conveniently using the X icon located on the right. 

 
When you enable the visualisation of past trades on TradingView, the platform will display red and green arrows directly on your charts, indicating the entry and exit points of previous positions. 

Moreover, you have the capability to view the number of contracts traded, accompanied by the execution date, providing a comprehensive overview of your trading history. 

TradingView_Strategies

One of the attractions for millions of retail traders to this platform is the assortment of specialised tools and user-generated strategies available for utilisation at any given time.  

Our immediate focus is on understanding how to employ strategies. Without delving into the intricacies of each strategy, let's elucidate how to leverage TradingView using a range of pre-established strategies conveniently accessible on the website. 

Follow this simplified step-by-step guide: 

• Click on "Indicators" in the topmost menu of the TradingView terminal. 

• Opt for "Strategies" from the tabs positioned above the list of indicators. 

• Select the desired strategy from the new list provided. 

If you cannot find the strategy you're looking for, use the search bar for a quick and efficient search. 

It's as straightforward as that. As soon as you select a specific strategy, you will see its implementation on the price chart. Additionally, it's essential to understand how to employ multiple charts in TradingView. Some strategies may necessitate cross-comparisons with price data from other assets. 

To achieve this, simply click the plus icon next to the name of the primary viewed asset and choose the required asset from the list or use the search feature. This action will promptly overlay one chart over another, offering a more comprehensive view of the price in the context of its comparison against other assets. This feature proves particularly useful when dealing with futures and other derivatives. 

 

 

Conclusion 

Trading on TradingView is a dynamic and multifaceted process that combines technical analysis, strategy development, and community engagement. To succeed, you'll need to continually refine your skills, adapt to changing market conditions, and maintain a disciplined approach to risk management. 

Remember, no trading platform, no matter how sophisticated, can guarantee success. It's up to you to apply the knowledge and tools provided by TradingView to make informed decisions and build a profitable trading career. Whether you're a seasoned trader or just starting, TradingView can be a valuable resource on your journey to financial success in the world of trading.