The True Center Band (TCB) indicator is a specialized technical analysis tool designed to provide traders with a clear, non-repainting view of market trend, dynamic support and resistance levels, and the overall boundary of price action . Developed as an alternative to channel-based indicators that suffer from post-facto recalculation, the TCB focuses on reliability and simplicity, making it a valuable addition to any technical analyst’s toolkit.
Understanding the True Center Band (TCB)
The TCB indicator is composed of a central line and three surrounding channels or bands. Its primary function is to synthesize multiple aspects of market analysis—trend, support, and resistance—into a single, easy-to-interpret visual overlay on a price chart .
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Component
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Function
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Interpretation
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Center Line
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Measures the center of the price range within a given period.
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Acts as a proxy for the current trend direction and momentum.
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Three Channels (Bands)
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Represent different levels of dynamic support and resistance.
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Define the expected price boundary and potential reversal zones.
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The indicator is versatile, designed to work effectively across all market types, including Stocks, Futures, Forex, Options, and ETFs, and on various chart types, such as intraday charts (tick, minute, Renko, range) and daily charts .
The Non-Repainting Advantage: Reliability in Technical Analysis
The most significant feature that distinguishes the TCB from similar indicators is its guarantee that it never repaints . Repainting occurs when an indicator’s historical values change as new price data becomes available, which can lead to misleading backtesting results and a false sense of security for traders.
The TCB is specifically contrasted with indicators like the Center of Gravity (COG) and the Polynomial Regression Channel (PRC), which, while visually similar, often suffer from repainting because their calculations may incorporate future data points . By calculating its lines based only on past data, the TCB ensures that the plotted support and resistance levels remain fixed, providing a consistent and trustworthy foundation for real-time trading decisions and strategy development.
“True Center Band may look like some other indicators, such as Center of Gravity (COG) and polynomial Regression Channel (PRC). But there is one major difference, TCB never repaints, because it is not calculated by future data. Reliability makes TCB looks good, works better.”
How to Use the TCB Indicator
The TCB indicator is designed for simplicity, requiring only two main parameters for customization .
1. Parameter Tuning
The two primary parameters allow the user to adjust the indicator’s sensitivity to both the vertical price range and the horizontal time range.
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Parameter
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Description
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Usage
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Period
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The number of bars used to calculate the vertical price range.
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Long-term trend: Set a larger number (e.g., 50).
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BarLimit
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The number of bars used to calculate the horizontal price range.
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Short-term trend: Set a smaller number (e.g., 15).
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The indicator automatically plots the support and resistance levels based on the total number of bars loaded on the chart. Consequently, the width of the bands is dynamic; a wider price range over the loaded period will result in wider bands, reflecting higher volatility .
2. Trading Applications
The TCB can be used for several key technical analysis applications:
•Trend Identification: The direction of the center line clearly indicates the prevailing trend. A rising center line suggests an uptrend, while a falling center line suggests a downtrend.
•Dynamic Support and Resistance: The three channels act as dynamic zones of support and resistance. Traders can look for price action to reverse upon touching the outer bands, which can signal potential entry or exit points.
•Range and Volatility Measurement: The distance between the outer bands provides a visual measure of the market’s volatility and expected trading range. When the bands contract, it suggests low volatility and potential consolidation; when they expand, it indicates high volatility and a strong trend.
•Breakout Confirmation: A strong price move that breaks and closes outside the outermost band can be interpreted as a confirmation of a strong trend or a potential breakout from the established range.
For minute charts, especially those over 30 minutes, it is recommended to load more days of data in the chart settings to ensure the support and resistance levels are calculated over a longer, more meaningful range .
Conclusion: Why TCB is Useful for Technical Analysis
The True Center Band indicator offers a compelling combination of trend analysis and channel-based trading, all while solving the critical problem of repainting that plagues many similar tools. Its utility for technical analysis stems from its ability to provide:
1.Reliable Trend and Range Data: The non-repainting nature ensures that the historical data used for analysis is consistent and dependable.
2.Dynamic Market Context: It provides constantly adjusting support and resistance levels that reflect current market volatility and price action.
3.Simplicity and Versatility: With only two core parameters, it is easy to tune for different timeframes and trading styles, from short-term scalping to long-term position trading.
By clearly defining the market’s center of gravity and its expected boundaries, the TCB indicator allows traders to make more informed decisions regarding trend continuation, reversals, and risk management.
This indicator is available for NinjaTrader, MultiCharts, Tradingview, Prorealtime, SierraChart,
Get this indicator now: https://www.patternsmart.com/cart/index.php?route=product/search&search=tcb
