IVY Indicator

// This Pine Script® code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © vinodsliyanage

//@version=6
// © 2025 Vinod Liyanage and Inoka Liyanage
// This indicator uses the actual sigmoid function and parameters discovered 
// from our Python curve fitting experiment to calculate trade confidence.

//@version=5
indicator("IVY Indicator", shorttitle="IVY", overlay=true)

// --- 1. Curve Fitted Parameters ---

// float L_PARAM = 8011.0506
// float K_PARAM = 0.0187
// float X0_PARAM = -524.5286
// float OFFSET_PARAM = -8010.1009

// float L_PARAM = 6425.9670
// float K_PARAM = 0.0117
// float X0_PARAM = -833.8248
// float OFFSET_PARAM = -6425.0809

float L_PARAM = 8204.5847
float K_PARAM = 0.0163
float X0_PARAM = -607.1471
float OFFSET_PARAM = -8203.6494

// --- 2. User Inputs ---

// These can be changed in the indicator's settings menu on the chart.
len_ema = input.int(9, title="EMA Length")
confidence_threshold = input.float(0.85, title="Confidence Threshold (0.5-1.0)", step = 0.05)
show_confidence_label = input.bool(true, title="Show Confidence Label")

// --- 3. Indicator Calculations ---

// Calculate the EMA and the absolute difference between the close price and the EMA.
ema_val = ta.ema(close, len_ema)
close_ema_diff_abs = math.abs(close - ema_val)


// --- 4. Sigmoid Confidence Calculation ---

// This is the core of my indicator. It's the exact mathematical function we fitted.
confidenceScore() => L_PARAM / (1 + math.exp(-K_PARAM * (close_ema_diff_abs - X0_PARAM))) + OFFSET_PARAM

confidence = confidenceScore()

// --- 5. Signal Logic ---

// We determine the direction (Up/Down) based on whether the price is above or below the EMA.
// We then check if the calculated confidence meets our threshold.
isUpTrend = close > ema_val
isDownTrend = close < ema_val

buySignal = isUpTrend and confidence >= confidence_threshold
sellSignal = isDownTrend and confidence >= confidence_threshold

// --- 6. Plotting ---

// Plot the EMA line on the chart.
plot(ema_val, color=color.yellow, title="EMA Line", linewidth = 2)

// Plot the Buy arrows below the candles when a buySignal is true.
plotshape(series=buySignal, location=location.belowbar, color=color.new(color.green, 0), style=shape.triangleup, size=size.tiny, title="Buy Signal Arrow")

// Plot the Sell arrows above the candles when a sellSignal is true.
plotshape(series=sellSignal, location=location.abovebar, color=color.new(color.red, 0), style=shape.triangledown, size=size.tiny, title="Sell Signal Arrow")

// Create and plot the confidence labels with the arrows.
confidenceText = str.tostring(math.round(confidence * 100)) + "%"

if (show_confidence_label and buySignal)
    label.new(bar_index, low, text=confidenceText, color=color.new(color.green, 20), textcolor=color.white, style=label.style_label_up, yloc=yloc.price, size=size.tiny)

if (show_confidence_label and sellSignal)
    label.new(bar_index, high, text=confidenceText, color=color.new(color.red, 20), textcolor=color.white, style=label.style_label_down, yloc=yloc.price, size=size.tiny)