SSL Channel Indicator

Known as the SSL , the Semaphore Signal Level channel chart alert is an indicator that combines moving averages to provide you with a clear visual signal of price movement dynamics. In short, it's designed to show you when a price trend is forming.

This indicator is nothing but two 10-period simple moving averages with one applied to the high of the price and the other applied to the low of the price, therefore forming an envelope that follows the market price. The idea is to trade based on the flip technique where the price switches from being above the two moving averages to below them and vice versa. The steps to create the SSL indicator are relatively simple:

• Calculate a 10-period moving average on the latest 10 highs.
• Calculate a 10-period moving average on the latest 10 lows.

The above plot shows the SSL Indicator where we combine the two moving average in the following conditions:

• Only keep the moving average applied to the highs when the current price is lower.
• Only keep the moving average applied to the lows when the current price is higher.