Real-Time Stock Market Prediction & Algorithmic Trading Simulation
Using Dynamic Levels and VWAP Logic
1. Introduction
In the high-stakes world of financial trading, real-time decision-making plays a pivotal role
in maximizing profits and minimizing risks. This project focuses on designing a rule-based
algorithmic trading system for Gold and Forex instruments using Pine Script on
TradingView. The core of the strategy relies on a proprietary concept called “Dynamic
Levels,” which computes support and resistance zones based on the daily market open
price. These levels are enhanced by integrating the Volume Weighted Average Price (VWAP)
to generate simple, logic-driven Buy and Sell signals. The ultimate goal is to simulate and
automate a real-time trading model that delivers actionable insights to traders.
2. Problem Faced by Human Traders
Manual trading in volatile markets like Gold and Forex poses several challenges:
Emotional decision-making often leads to poor trade entries and exits.
Lack of 24/7 monitoring results in missed opportunities or delayed actions.
Overload from multiple indicators causes confusion and decision fatigue.
Absence of a rule-based system creates inconsistent trading outcomes.
These issues are further amplified when traders try to interpret rapidly changing market
conditions without a structured approach.
3. Solution: Automation & Algorithmic Decision Making
This project automates the entire decision-making process using a Pine Script-based
strategy on TradingView. The algorithm:
• Calculates upper and lower dynamic levels daily, derived from transformations on the
market open price.
• Uses VWAP as a real-time reference point to filter market noise and define directional
bias.
• Generates Buy signals when price rises from a lower level and crosses above VWAP, and
Sell signals when price drops from an upper level and falls below VWAP — validated using
price behavior from the past 12 candles.
• Displays only the levels that the price has interacted with, reducing visual clutter and
aiding real-time clarity.
This rule-based automation removes emotional interference, enforces consistent signal
generation, and simplifies chart interpretation across all time frames. While the current
implementation is designed for TradingView’s backtesting environment, the logic is scalable
for integration with APIs or broker systems for real-time execution.
This project demonstrates how intelligent scripting and visual design can enhance stability,
transparency, and decision-making in one of the most dynamic and psychologically
demanding industries: financial trading.
