[Update2: Improved FlowPrice indicator for the Hurst Oscillator.
Due to the massive interest in Hurst's indicators, they are now also available as download
for direct import into TOS. See bottom of this post.]
[Update3: User selectable coloring of the ExtrapolatedMA added.]
In the late 60's a NASA aerospace engineer J.M. Hurst published ‘The Profit Magic of Stock Transaction Timing’. Ironically, his book, by some considered the best book ever written about stock market cycles and swing trading, became available during the deepest and most extended Bear Market since the Great Depression. From 1972 on brokers couldn't give blue chip stock away in a Wall Street lunchroom. There was no market for a book by a stock market timer, and the book became a hidden treasure.
By the time stock market investing became sexy again Hurst was long forgotten old news. Peter Eliades and Mark Hulbert picked up the banner of Hurst cycle analysis and stock market cycles. To quote Peter Eliades:
“Sometimes a single moment changes all the ones that follow. For me it was the discovery of Hurst’s book, ‘The Profit Magic of Stock Transaction Timing’. It was responsible for changing my life.”
The Hurst Channels and the Hurst Oscillator, be it combined or separate, can be implemented to uncover turning points in all time frames. Notice that the Hurst Oscillator is basically just another presentation of the position of price in the Hurst Channel.
Double Hurst Channels give an even better idea on the direction of price. To create a double Hurst Channel, simply load the indicator twice and lower the settings for the inner channel.
Be advised though, as the centered moving average is extrapolated into the ‘future’ by half of its length, the actual direction of the channel is based on the assumption the most recent trend will continue in a straight line. For a more sophisticated channel prediction polynomial regression formulas are necessary (please share if you have them available for thinkscript!).
The percentage settings for the channels my have to be adjusted depending on the instument and the selected time frame! See for examples the charts below.
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These indicators were brought to my attention by 40+ years veteran trader S.K. Yarbrough (see markethighsandlows.wordpress.com). In case you stop by, be sure to check his tutorial too. Scotty (no affiliation!) also offers a paid service for members with a limited time special subscription rate of just $5.00 for the first month.
My compliments go to Rich Houser and Kirill Kirillov of the TOS_thinkscript group for providing the core CMA-code.
The [updated] thinkscript code for both studies is available in the comment section for copy/paste as "New Study" or hit download below.
Hurst_ChannelsSTUDY.ts
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Hurst_OscillatorSTUDY.ts
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[Depending on your configuration the STUDY.ts files may be recognized by your computer as video files. Be assured, they are not. The files are "just" plain text files with the extension .ts because that's the kind of files thinkDesktop can import.]