array.percentile_linear_interpolation Function In Pinescript

In this blog, we will delve into the **array.percentile_linear_interpolation**function in Pine Script, a popular domain-specific language used for creating custom indicators and strategies on the TradingView platform. This powerful function allows you to calculate the percentile value of an array based on a specified percentage, using linear interpolation.

Understanding Array.percentile_linear_interpolation

Array.percentile_linear_interpolation is a built-in Pine Script function used to calculate the value at a given percentile of an array of numerical values. The function employs linear interpolation to determine the value at the specified percentile.

Syntax and Parameters

The syntax for this function is as follows:

array.percentile_linear_interpolation(array, percentage)

Parameters:

• array: An array containing numerical values. This array must be sorted in either ascending or descending order prior to passing it to the function.
• percentage: A numerical value between 0 and 100, representing the percentile to calculate.

Return value:

The function returns the value at the specified percentile in the given array.

Use Case Examples

To better understand the usage of the array.percentile_linear_interpolation function in Pine Script, let’s explore two unique use case examples.

<a name=”example-1-bollinger-band-percentiles”></a>

Example: Bollinger Band Percentiles

In this example, we will create an indicator that calculates the 20-day Bollinger Band percentile for the closing price of a trading instrument.

//@version=5
indicator('Bollinger Band Percentiles', shorttitle='BB Percentiles', overlay=true)
length = input.int(20, minval=1, title='Length')
src = close
mult = input(2.0, title='Multiplier')
percentage = input(50, title='Percentile')

// Calculate Bollinger Bands
basis = ta.sma(src, length)
dev = mult * ta.stdev(src, length)
upper = basis + dev
lower = basis - dev

// Calculate the distance between the upper and lower bands
band_range = upper - lower

// Initialize the array to store the band ranges
band_range_array = array.new_float(0)

// Add the current band range to the array
array.unshift(band_range_array, band_range)

// Keep the array length equal to the specified length
if array.size(band_range_array) > length
    array.pop(band_range_array)

// Sort the array in ascending order
array.sort(band_range_array, order.ascending)

// Calculate the percentile value using the array.percentile_linear_interpolation function
percentile_value = array.percentile_linear_interpolation(band_range_array, percentage)

// Plot the Bollinger Bands and the percentile value
plot(basis, color=color.new(color.blue, 0), linewidth=2, title='Basis')
plot(upper, color=color.new(color.red, 0), linewidth=1, title='UpperBand')
plot(lower, color=color.new(color.red, 0), linewidth=1, title='Lower Band')
plot(close + percentile_value, "Percentile Value", color=color.green, linewidth=2)

Explanation:

1. We start by defining our input parameters: length, mult, src, and percentage.
2. Next, we calculate the Bollinger Bands using the sma() and stdev() functions.
3. We then calculate the distance between the upper and lower bands, which is the band_range.
4. We initialize an empty array band_range_array to store the band ranges.
5. We add the current band_range to the beginning of the array using array.unshift().
6. To maintain the desired array size, we remove the oldest value from the array using array.pop() when the array size exceeds the specified length.
7. We sort the band_range_array in ascending order using array.sort().
8. The array.percentile_linear_interpolation() function is used to calculate the percentile value based on the percentage input.
9. Lastly, we plot the Bollinger Bands and the percentile value on the chart.

Key Takeaways

• The array.percentile_linear_interpolation

function is a powerful tool in Pine Script that allows you to calculate the value at a specified percentile in a given array using linear interpolation.

• Before passing an array to the function, it must be sorted in either ascending or descending order.
• The array.percentile_linear_interpolation function can be used in a variety of scenarios, such as determining Bollinger Band or relative volume percentiles.
• It is essential to maintain the desired array size by adding new values to the beginning of the array and removing the oldest values when the size exceeds the specified length.

Conclusion

In this blog, we have explored the array.percentile_linear_interpolation function in Pine Script, including its syntax, parameters, and two unique use case examples that demonstrate its practical application. With this knowledge, you can now incorporate percentile calculations into your custom indicators and strategies on the TradingView platform, providing you with valuable insights into your trading analysis