Psychological Line (PSL)

// Licensed under the Apache License, Version 2.0
// © mihakralj
//@version=6
indicator("Psychological Line (PSL)", "PSL", overlay=false)

//@function Calculates Psychological Line — percentage of up-bars over lookback
//@param source Series to evaluate (typically close)
//@param period Lookback period (number of bars to count)
//@returns PSL value in [0, 100]
//@description PSL counts the number of bars where source > source[1] (up-bars)
//  within the lookback window and expresses it as a percentage:
//    PSL = 100 × (count of up-bars in period) / period
//  Uses a circular buffer storing 1.0 (up) or 0.0 (down/unchanged) with
//  a running sum for O(1) updates per bar.
//  Readings above 50 indicate bullish sentiment (more up-bars than down).
//  Extreme readings (>75 or <25) suggest overbought/oversold conditions.
//  First bar has no prior close reference — defaults to 0 (not an up-bar).
psl(series float source, simple int period) =>
    if period <= 0
        runtime.error("Period must be greater than 0")

    var array<float> buffer = array.new_float(period, na)
    var int head = 0
    var float upSum = 0.0
    var int count = 0

    float prev = source[1]
    float upVal = not na(prev) and source > prev ? 1.0 : 0.0

    float oldest = array.get(buffer, head)
    if not na(oldest)
        upSum -= oldest
    else
        count += 1

    upSum += upVal
    array.set(buffer, head, upVal)
    head := (head + 1) % period

    100.0 * upSum / math.max(1, count)

// ---------- Main loop ----------

// Inputs
i_period = input.int(12, "Period", minval=1)
i_source = input.source(close, "Source")

// Calculation
psl_value = psl(i_source, period=i_period)

// Plot
plot(psl_value, "PSL", color=color.yellow, linewidth=2)
hline(50, "Midline", color=color.gray, linestyle=hline.style_dotted)
hline(75, "Overbought", color=color.red, linestyle=hline.style_dashed)
hline(25, "Oversold", color=color.green, linestyle=hline.style_dashed)