How to create custom indicators and trading strategies using Pine Script?

Pine Script is TradingView's proprietary scripting language designed specifically for creating custom technical indicators and trading strategies. It has the following key characteristics:

Syntax Features:

• Syntax similar to Python and JavaScript, easy to learn
• Type-safe with automatic type inference
• Built-in extensive financial functions and mathematical operations
• Supports arrays and variable management
• Event-driven model triggered by price changes

Core Concepts:

• Version Selection: Pine Script v4 and v5 are the main versions, with v5 offering more features
• Input Parameters: Use input() function to create configurable parameters
• Variable Declaration: Use var, varip, simple keywords to declare variables
• Function Definition: Supports custom functions that can return multiple values
• Strategy Logic: Use strategy() function to define trading strategies

Common Functions:

• ta.sma(), ta.ema(): Moving averages
• ta.rsi(): Relative Strength Index
• ta.macd(): MACD indicator
• strategy.entry(): Open positions
• strategy.close(): Close positions
• plot(): Plot data on charts

Backtesting Features:

• strategy() function automatically enables backtesting
• Can set initial capital, commissions, slippage, and other parameters
• Provides detailed backtesting reports and performance metrics
• Supports multi-timeframe backtesting

Best Practices:

• Use request.security() to access data from other timeframes
• Use var and varip appropriately to optimize performance
• Avoid complex calculations in loops
• Use barstate.isrealtime to distinguish between real-time and historical data
• Add proper error handling and validation logic