Highest high value indicator or in short form HHV means that stock has hit an all-time high since it is listed and it indicates that there is big demand at that particular time of that particular stock. In this indicator the default period is 14. The Highest High Value indicator returns the highest high price over a user-defined n-periods.
Formula of Highest High Value Indicator (HHV):
Highest High Value = Maximum (High) of n−periods
How to Attach the HHV Indicator on Charts?
HHV on Zerodha Kite
Traders can know more about the Highest high value indicator, then they can find it in the Zerodha Kite Kite. It also available in Kite mobile App. The Default Period is 14. The traders can also Check the image below to understand how to attach the Highest high value indicator in HDFC Bank share price chart below. The indicator can be used in any time frame charts such as daily, weekly, intraday or monthly.
The more the price of a security increases this technical indicator makes steps and moves up. As the same way, the indicator moves down in steps when the price of the security moves down gradually. The Highest High Value function is especially useful for creating trailing stop loss formula.
Highest High and Lowest Low are same types of two technical analysis which are plot the highest and the lowest asset price over the price chart in the form of two lines.
Highest High Value in Amibroker
There is a HHV function in AmiBroker function reference. The default usage of the same is hhv( ARRAY, periods ). This function is specially helpful in created trailing stop loss in the AmiBroker platform.
Highest High Value Metastock
Metastock software also has a default HHV() function. It returns the highest value of the data array over a specified period.
How to Use Highest High Value Indicator?
HHV and LLV, these two simple yet effective indicators can turn into a powerful trading system when combined. The two can be used on their own or as a supportive tool, that confirms or refutes the signals sent by different indicators. They can hint at potential reversal points, help trader estimate the probability of a trend reversal and the likeability of a sudden price move.
The idea behind the indicators is not only similar but also quite simple. Highest High returns the highest price observed over the course of several periods. Lowest Low, in its turn, shows the lowest price observed over the number of periods. Indian stock brokers at present are only offering the HHV indicator on the charts. You can adjust the number of periods when setting up the indicator. The longer the period, the longer the last observed highest/lowest price will dominate the chart. This is true for both indicators.
Using as a Price Channel
How exactly would one use Highest High and Lowest Low in trading? Due to their nature, Highest High and Lowest Low are perfectly suited to serve as a dynamic price channel. In the TradingView platform one strategy is available on this setup. A price channel is a corridor inside which the asset price will move while the current trend is prevalent. When the trend changes, the price channel will follow. Usually, the price channel is confined by two parallel lines. Certain indicators — like this one — can create price channels of their own.
One way to use the indicators is as following. When the price fluctuates within the price channel, the trader would observe and wait for a trading opportunity to present itself. When the price, however, leaves the price channel, one of the two can be expected: 1) it will either continue moving in the same direction, setting new highs or lows, 2) or it will rebound and return back to the channel. Now, to the tricky part. It is not always easy to tell which one will happen once the price action reaches Higher High / Lower Low lines. It is up to you to learn to distinguish between a breakthrough and a rebound, the difference that can make or break a lot of deals.
As you can see, the actions, taken by traders in both cases are the exact opposite. It is crucial, therefore, to tell a rebound from a breakthrough. But there is one thing that can help: confirmations. When spotting a candle that closes on one of two lines, wait for two more candles to close in order to receive a confirmation. Judging by these two candles it will be easier to estimate the future price movement.
The major drawback of this setup is in Indian chartiing platforms like Zerodha Kite etc, you can not attach both HHV and LLV in same window. So implementing this trading strategy is still complex.
Using Highest High Value Indicator with Other Indicators
As stated above, it is also possible to combine Highest High and Lowest Low with other technical analysis tools. No matter what traders use, try to find something that goes together well. As an example I have tested a simple moving average of the Highest High Value indicator. Buy when the HHV crosses the moving average on the upside and sell when it crosses the moving average back on the downside. I have tested that this generates some good and stable signals.
The Highest High Value indicator plots the maximum high of a security over a specific period. This is a trend following indicator and follows the price action. This Indicator can be used with other trend following undicators to create a trading system.