Arps Fear/Greed Index (Radar1)

This study creates a histogram based on the relationship between price changes and volume changes to measure the ratio of buying strength to selling strength. The length and color of the histogram bars tell us whether the Bulls or the Bears are in control at any particular point in time. It is an excellent oscillator for divergence analysis and for identifying trend persistence and works in real time on charts in any time frame, either intraday or end-of-day.

When the Arps Fear/Greed Index is in the green zone, buying pressure exceeds selling pressure and the Bulls are in control. The height of green upward-pointing histogram bars is an indicator of the strength of the Bulls’ buying pressure. Conversely, if the Arps Fear/Greed Index histogram is in the red zone, selling pressure exceeds buying pressure and the Bears are in control. The depth of the red downward-pointing histogram bars is an indication of the strength of the Bears’ selling pressure.

The Arps Fear/Greed Index serves as an excellent turning point indicator in all kinds of markets because it usually begins to turn before the price does. It generally reveals the exhaustion of the Bulls/Bears while the price is still moving up/down of its own momentum. If a sudden move in price is not confirmed or anticipated by a similar move in the Arps Fear/Greed Index, it usually means a fake-out swing and represents a move to be ignored or faded.

The Arps Fear/Greed Index often creates a characteristic "double peak" or "double valley" pattern prior to a major price reversal. On the other hand, if the pattern is a smooth up-and-down curve interrupted with no more than a minor dip, the chances are that the existing trend will continue further.

When an Arps Fear/Greed Index valley is shallower than its predecessor while the price corresponding to the most recent Arps Fear/Greed Index valley is lower than the price corresponding to the previous Index valley, a diverging condition has occurred that generally signals an imminent price reversal to the upside. Conversely, when a the Arps Fear/Greed Index peak is lower than its predecessor while the price corresponding to the most recent Index peak is higher than the price corresponding to the previous Index peak, a diverging condition has occurred that generally signals an imminent price reversal to the downside.

This index often exhibits a typical pattern behavior of twin peaks or valleys. When you see a single substantial peak or valley, be prepared to see its "twin" appear after a brief pullback.

The Arps Fear/Greed Index is an extremely robust indicator that works equally well on end-of-day data and intraday data.

NOTE: Before modifying any inputs, be sure you have read the section entitled "Using Input Settings."

Sensitivity (Default = 4 Range 1-10) Lower numbers make the indicator more sensitive, meaning changes in price action will affect this indicator more rapidly. The optimum value for this input factor will vary from market to market and time frame to time frame. You will be able to use the Fear/Greed Index most effectively by tailoring this input factor to the chart you are evaluating. It was designed to give you the maximum control over the market trends you are most interested in.

BOUNDED? (Default = False) The Arps Fear/Greed Index is typically used as a non-bounded oscillator. This means that there is no upper or lower limit to the values it can display. Setting the BOUNDED input to "True" activates a normalization algorithm to limit the range of the oscillator from 0 to 100.