Dec triangle
A flat price floor under a falling ceiling: a descending-triangle setup, read as bearish, that fires before any break.
The indicator takes the highest and lowest closes of the last 100 bars and measures how each moved over the last 20 bars, in percent. It marks a bar when the low moved no more than eps percent while the high fell by more than eps percent, which gives a level floor under a sloping ceiling. At the default eps of 0.05 percent, the tolerance is about 0.4 points on SPY near 765. It flags the setup only and does not require the price to break the floor.
How to read it
- Markers sit on the candles where the setup holds; a bar with no marker means the setup is off.
- A run of consecutive markers is one compression, not repeated signals.
- Watch the floor on the chart: the ceiling should be coming down toward a level that price keeps returning to.
- The trade is the break below the floor, which this indicator does not check.
What it outputs
- Dec triangle setup
- True on each bar where the 100-bar closing low is flat and the 100-bar closing high has fallen; blank otherwise.
When it fires
Bars where the 100-bar closing low moved no more than eps percent over 20 bars and the closing high fell more than eps percent over the same span. Price is coiling between a flat floor and a falling ceiling. A break below the floor is the usual trigger, which the indicator does not check.
Settings
- Epsilon
- Sets two tests in percent over 20 bars: how far the floor may drift, and how far the ceiling must fall. Higher widens the floor band but demands a bigger ceiling drop; lower does the opposite. Frequency does not move one way, so check the chart.
Pitfalls
- eps cuts both ways: lowering it tightens the flat-floor test but eases the falling-ceiling test, so lower is stricter only for the floor.
- Both lines come from rolling closes over fixed 100-bar and 20-bar windows, not drawn trend lines. The ceiling falls whenever an old peak leaves the window, so it can read as falling with no new lower highs.
- It fires on setups, not breakouts. At defaults it is on about 7 percent of bars and fires about four times a day, so it is common, not rare, and the shape alone does not say which way price breaks.