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Trend Heat

Q: How is heat sizing calculated?

Size = account × heat % (10% by default) ÷ (ATR × 5). It sets the quantity so that a drop of 5 average ranges (ATR) shrinks the account by only the heat %. Up to 100%, no leverage; account size, heat % and the ATR multiple are inputs.

Q: Where is it weak?

In trendless chop it can buy and sell repeatedly and take several small losses, and in long, nonstop bull runs its total return is often lower than holding.

Q: Do past signals change later?

No. The 15-day and 150-day EMA cross is judged on confirmed closes only, so it never repaints. Long only.

Q: Did Ed Seykota make this indicator?

No. ChartArmory built it from the example Seykota published in the Trading System Project on his website; it is not affiliated with or endorsed by him.

Q: What about other crashes?

Dot-com Nasdaq 100 (2000.3–2002.10) −83.0% → −31.8%, Meta (2021.9–2022.11) −76.7% → −30.7%, Covid crash S&P 500 (2020.2–3) −34.1% → −19.0% (holding → Trend Heat).

Q: Can I edit or share the code?

You can edit it for personal use. Sharing, redistribution and resale rights are not included.

EMA trend following, with position sizing built in

Built by ChartArmory from the public example of system-trading pioneer Ed Seykota, featured in Market Wizards: a 15/150 EMA cross with ATR-based heat sizing.

$99.60One-time payment · Perpetual personal use

Add to my chart

US$249 (one-time) includes

Full Pine Script v6 source code
8-language card and install guide
Personal use and editing rights (no redistribution or resale)
30 days of bug-fix support after purchase
Copy button and TXT right after payment

Delivery and refund policy ↗

TREND HEAT / HISTORICAL CASE

Bitcoin: bought at $270, sold at $6,955 about 28 months later

BTC-USD · 1D · 2015.10 → 2018.02+2,464.8%

Bought the day the 15-day line closed above the 150-day line, sold the day it closed back below. SPY made +29.8% over the same period.

SPY, same period: +29.8%
Held: about 28 months

On 17 Oct 2015 the buy signal locked in at the $270.64 close. It kept waiting by the rule even after a peak of $19,497, and on 5 Feb 2018 the 15-day line closed below the 150-day line and it sold at $6,955.27.

01 / 🔥 Buy2015.10.17$270.64🔥 · EMA 15 > 150
02 / Highest close while held2017.12.16$19,497.40+7,104.2%
03 / 15/150 cross sell2018.02.05$6,955.27SELL · EMA 15 < 150

Signal and fill at that day's close, 0.1% cost on buy and sell · a replay of the same rule as the TradingView indicator (Yahoo BTC-USD; Bitstamp chart +2,764.9%)

Download the calculation record (JSON) ↓

PROBLEM → FIX

Three moments that make traders hesitate, settled by rules

ProblemSelling after a small gain and missing the big trend
FixThere is no other sell condition until the fast line closes below the slow line, so it holds until the trend ends
ProblemNot knowing where to get out, and watching the account halve in a crash
FixA close below the slow line sells and turns the river blue (resting), stepping aside for most of the big falls
ProblemEvery market swings differently, so how much should I buy?
FixFrom account size, heat % and 5 ATR, the card works out the size, the quantity and how much the account shrinks if price falls 5 ATR

01 / WHAT IT DOES

Ride the trend to the end, size it with numbers

A simple rule that stays in

When the fast EMA (15) closes above the slow EMA (150) it is 🔥 BUY; it sells only when it closes back below. Signals are set on the close, so they never repaint.

Heat sizing that protects the account

It treats 5× the average range (ATR) as the risk and sizes the position so only a set share of the account (10% by default) is at stake. Calm market, bigger size; wild market, smaller size. Up to 100%, no leverage.

Heat river and scorecard

A 'heat river' between the lines that glows yellow, orange and red as the trend strengthens and turns blue while resting, plus an 8-language card with the state, heat size and past crash results, and buy/sell alerts.

02 / ON YOUR CHART

Read the trend's temperature by color, check past results on the card

The color of the heat river between the two moving averages and one card tell you at a glance whether you are riding a trend or resting.

Read the trend's temperature by color, check past results on the card · S&P 500 in the 2008 crisis, with the scorecard — S&P 500 in the 2008 crisis, with the scorecard
Through the 2007.10–2009.3 crash, when holding lost −56.5%, it was mostly on the blue river (resting), and the card shows −10.5%.

03 / EVIDENCE

Worst drops since 2001: holding vs Trend Heat

Ten markets, from stocks and indexes to crypto and gold: the worst drop when simply holding versus with Trend Heat.

Show the full table

All figures are past records with 0.1% cost on every buy and sell, long only, no leverage (full-position basis). Markets with later data start from their first day.
Market	From	Hold: worst drop	Trend Heat: worst drop
S&P 500 (SPY)	2001	−56.5%	−29.3%
Nasdaq 100 (QQQ)	2001	−70.4%	−29.8%
Nvidia	2001	−89.7%	−52.3%
Tesla	2011	−73.6%	−70.3%
Apple	2001	−60.9%	−43.3%
Meta	2013	−76.7%	−49.5%
Bitcoin	2015	−83.4%	−75.5%
Ethereum	2018	−82.0%	−62.0%
Gold	2001	−44.4%	−38.2%
Microsoft	2001	−59.1%	−50.1%

Calculated from Yahoo Finance daily closes (dividends excluded). Figures can differ slightly between data sources.
In short chop it buys and sells and takes several small losses, and in long bull runs its total return is often lower than holding. It is in the market about 60–77% of the time in most markets.

Trading without the indicator

Losing less in big crashes matters more than winning big

Historic crashes: simply holding versus Trend Heat (0.1% cost on every buy and sell).

Without it−56.5%

With the indicator −10.5%

2008 crisis S&P 500 (2007.10–2009.3) — holding lost −56.5%. The indicator rested through most of the fall.

Without it−83.0%

With the indicator −31.8%

Dot-com crash Nasdaq 100 (2000.3–2002.10) — holding lost −83.0%. Following the indicator, the loss stopped here.

Without it−76.6%

With the indicator −31.6%

Bitcoin bear market (2021.11–2022.11) — holding lost −76.6%. Following the indicator, the loss stopped here.

04 / INSTALL

Three steps to your chart, right after payment

No monthly fee: one payment gets you the full Pine Script v6 source to keep and edit.

01Copy the code or download the TXT after payment
02Paste into TradingView's Pine Editor and save
03Add to the chart, set account size, heat % and card language, turn on buy and sell alerts

Past performance does not guarantee future results.

Built by ChartArmory from Ed Seykota's public example; not affiliated with or endorsed by Seykota.

TREND HEAT / FAQ

FAQ

How is heat sizing calculated?

Size = account × heat % (10% by default) ÷ (ATR × 5). It sets the quantity so that a drop of 5 average ranges (ATR) shrinks the account by only the heat %. Up to 100%, no leverage; account size, heat % and the ATR multiple are inputs.

Where is it weak?

In trendless chop it can buy and sell repeatedly and take several small losses, and in long, nonstop bull runs its total return is often lower than holding.

Do past signals change later?

No. The 15-day and 150-day EMA cross is judged on confirmed closes only, so it never repaints. Long only.

Did Ed Seykota make this indicator?

No. ChartArmory built it from the example Seykota published in the Trading System Project on his website; it is not affiliated with or endorsed by him.

What about other crashes?

Dot-com Nasdaq 100 (2000.3–2002.10) −83.0% → −31.8%, Meta (2021.9–2022.11) −76.7% → −30.7%, Covid crash S&P 500 (2020.2–3) −34.1% → −19.0% (holding → Trend Heat).

Can I edit or share the code?

You can edit it for personal use. Sharing, redistribution and resale rights are not included.

TREND HEAT · V1