Trends are important concepts. This article presents a new and modern technical indicator I call the Symmetry Index which is a market regime indicator.
Trends in a Nutshell
Imagine you’re standing on a beach watching waves roll in. Some waves are small ripples, some are big, and sometimes the tide itself is coming in or going out.
That’s how financial markets move — they rise and fall in waves, but underneath those waves is a general direction: up, down, or sideways. That general direction over time is called a trend.
An uptrend is when prices, on average, keep going higher. Even though there are small drops (no market goes up in a straight line), each new “high” tends to be higher than the last one, and each pullback stops above the last dip. You can think of it like walking upstairs: you take steps down between steps up, but you keep rising.
A downtrend is the opposite — prices are generally moving lower. You might see some small rallies, but each one fails to reach the previous high. Think of it like walking downstairs: sometimes you pause or step up a bit, but overall, you’re going down.
Sometimes prices don’t go up or down much at all — they move sideways, bouncing between two rough boundaries (a ceiling and a floor). This is like the ocean at low tide: lots of movement, but no real progress.
Trends form because crowds of traders and investors act together over time.
When more people want to buy than sell → prices rise.
When more people want to sell than buy → prices fall.
Most trading ideas come down to one of these two beliefs:
“The trend is your friend.” → You trade with the direction of the trend, expecting it to continue.
“Trends eventually reverse.” → You trade against it, trying to catch turning points.
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The Symmetry Index
The Symmetry Index (SI) is designed to measure how balanced the recent price movement is between upward and downward swings.
In other words:
“Are buyers and sellers equally strong, or is one side dominating?”
It looks at how much total distance price has covered upwards and downwards over a given period — then compares the two.
Let’s assume you want to calculate the SI over the last N bars (for example, N = 20). We’ll use closing prices.
Step 1️⃣: Get price changes per bar
Step 2️⃣: Separate up moves and down moves
Step 3️⃣: Sum up the total up and down moves over N bars
Step 4️⃣: Compute the symmetry ratio
The SI is a measure of structural equilibrium — a kind of market physics ratio.
Think of it like this:
The market is a seesaw.
Bulls sit on one side, bears on the other.
The Symmetry Index tells you who’s heavier.
Use the following code to create the indicator:
//@version=5
indicator(”Symmetry Index”, shorttitle=”Symmetry”, overlay=false)
lookback = input.int(20, “Swing Lookback”)
// Compute swing amplitude (price change per bar)
upMoves = math.sum(close > close[1] ? close - close[1] : 0, lookback)
downMoves = math.sum(close < close[1] ? close[1] - close : 0, lookback)
// Avoid division by zero
symmetry = downMoves > 0 ? (upMoves / downMoves) * 100 : na
plot(symmetry, color=color.new(color.blue, 0), linewidth=2, title=”Symmetry Index”)
hline(100, “Balanced Line”, color=color.gray)
bgcolor(symmetry > 120 ? color.new(color.green, 85) : symmetry < 80 ? color.new(color.red, 85) : na)
The following chart shows how to use this indicator with subjective barriers in order to play contrarian short-lived reactions
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