AO Smart Scalper – 5M Dynamic SL Edition📈 AO Signals with Fixed and Dynamic SL – Optimized for 5-Minute Charts 📉
This indicator is built for 5-minute timeframe trading, combining powerful momentum signals from the Awesome Oscillator (AO) with both Fixed and Dynamic Stop Loss (SL) levels to enhance trade management and risk control.
✅ Buy/Sell Signals:
The indicator generates clear BUY and SELL signals based on the AO crossing above or below the zero line, helping traders capture momentum shifts early.
🛑 Fixed Stop Loss:
Each trade signal comes with a Fixed SL, calculated based on the high (for shorts) or low (for longs) of the previous candle, with a customizable percentage offset. This SL is plotted with a red line, providing a clear initial risk level.
⚡ Dynamic Stop Loss: Continuous Presence, Strategic Use:
A secondary Dynamic SL line is plotted, which is continuously present on the chart. This dynamic level responds to market conditions and can serve as a trailing stop or key decision point.
💡 Recommended Use: It is recommended to actively start using the Dynamic SL once the trade has moved into profit. This allows protecting obtained profits and minimizing the risk of losses in case of a market reversal.
🛡️ Enhanced Dynamic Stop-Loss Strategy:
🔒 Initial Protection: Utilize the Fixed SL as the initial stop-loss, placed below relevant lows (for longs) or above relevant highs (for shorts), or as provided by the fixed SL indicator.
🛤️ Dynamic Tracking:
🟢 Long Trades: Once in profit, the Dynamic SL will dynamically adjust, moving upwards as higher lows are formed, effectively trailing the price and securing profits.
🔴 Short Trades: Conversely, in short trades, once in profit, the Dynamic SL will move downwards as lower highs are formed, protecting gains.
🔄 Alternatively the dynamic stop loss will follow the dynamic SL line provided by the indicator.
🚪 Exiting Trades: When the price crosses below the Dynamic SL line in a LONG trade, or above it in a SHORT trade, the recommended action is to exit the trade.
↩️ Re-entry Consideration: You may consider re-entering only if the price clearly returns above the Dynamic SL (for longs) or below it (for shorts).
⚠️ IMPORTANT - 5-Minute Strategy Guidance ⏱️
This tool is specifically optimized for the 5-minute timeframe. This approach helps filter out weak setups and maintain discipline in volatile market conditions.
✨ Additional Features:
👁️ Visual and editable SL levels
📊 200-period SMA for trend context
💻 Simple and effective interface for intraday trading setups
🎯 Ideal for traders seeking a clean, rule-based system that combines momentum entry signals with layered stop loss protection.
🔑 Key Changes:
It was emphasized that the Dynamic SL is always present, but its active use is recommended once the trade is in profit.
It was clarified the use of the Fixed SL, giving the option to use the one provided by the indicator, or to place it according to the price action. Indicator
Awesome Oscillator (AO) with Signals [AIBitcoinTrend]👽 Multi-Scale Awesome Oscillator (AO) with Signals (AIBitcoinTrend)
The Multi-Scale Awesome Oscillator transforms the traditional Awesome Oscillator (AO) by integrating multi-scale wavelet filtering, enhancing its ability to detect momentum shifts while maintaining responsiveness across different market conditions.
Unlike conventional AO calculations, this advanced version refines trend structures using high-frequency, medium-frequency, and low-frequency wavelet components, providing traders with superior clarity and adaptability.
Additionally, it features real-time divergence detection and an ATR-based dynamic trailing stop, making it a powerful tool for momentum analysis, reversals, and breakout strategies.
👽 What Makes the Multi-Scale AO – Wavelet-Enhanced Momentum Unique?
Unlike traditional AO indicators, this enhanced version leverages wavelet-based decomposition and volatility-adjusted normalization, ensuring improved signal consistency across various timeframes and assets.
✅ Wavelet Smoothing – Multi-Scale Extraction – Captures short-term fluctuations while preserving broader trend structures.
✅ Frequency-Based Detail Weights – Separates high, medium, and low-frequency components to reduce noise and improve trend clarity.
✅ Real-Time Divergence Detection – Identifies bullish and bearish divergences for early trend reversals.
✅ Crossovers & ATR-Based Trailing Stops – Implements intelligent trade management with adaptive stop-loss levels.
👽 The Math Behind the Indicator
👾 Wavelet-Based AO Smoothing
The indicator applies multi-scale wavelet decomposition to extract high-frequency, medium-frequency, and low-frequency trend components, ensuring an optimal balance between reactivity and smoothness.
sma1 = ta.sma(signal, waveletPeriod1)
sma2 = ta.sma(signal, waveletPeriod2)
sma3 = ta.sma(signal, waveletPeriod3)
detail1 = signal - sma1 // High-frequency detail
detail2 = sma1 - sma2 // Intermediate detail
detail3 = sma2 - sma3 // Low-frequency detail
advancedAO = weightDetail1 * detail1 + weightDetail2 * detail2 + weightDetail3 * detail3
Why It Works:
Short-Term Smoothing: Captures rapid fluctuations while minimizing noise.
Medium-Term Smoothing: Balances short-term and long-term trends.
Long-Term Smoothing: Enhances trend stability and reduces false signals.
👾 Z-Score Normalization
To ensure consistency across different markets, the Awesome Oscillator is normalized using a Z-score transformation, making overbought and oversold levels stable across all assets.
normFactor = ta.stdev(advancedAO, normPeriod)
normalizedAO = advancedAO / nz(normFactor, 1)
Why It Works:
Standardizes AO values for comparison across assets.
Enhances signal reliability, preventing misleading spikes.
👽 How Traders Can Use This Indicator
👾 Divergence Trading Strategy
Bullish Divergence
Price makes a lower low, while AO forms a higher low.
A buy signal is confirmed when AO starts rising.
Bearish Divergence
Price makes a higher high, while AO forms a lower high.
A sell signal is confirmed when AO starts declining.
👾 Buy & Sell Signals with Trailing Stop
Bullish Setup:
✅AO crosses above the bullish trigger level → Buy Signal.
✅Trailing stop placed at Low - (ATR × Multiplier).
✅Exit if price crosses below the stop.
Bearish Setup:
✅AO crosses below the bearish trigger level → Sell Signal.
✅Trailing stop placed at High + (ATR × Multiplier).
✅Exit if price crosses above the stop.
👽 Why It’s Useful for Traders
Wavelet-Enhanced Filtering – Retains essential trend details while eliminating excessive noise.
Multi-Scale Momentum Analysis – Separates different trend frequencies for enhanced clarity.
Real-Time Divergence Alerts – Identifies early reversal signals for better entries and exits.
ATR-Based Risk Management – Ensures stops dynamically adapt to market conditions.
Works Across Markets & Timeframes – Suitable for stocks, forex, crypto, and futures trading.
👽 Indicator Settings
AO Short Period – Defines the short-term moving average for AO calculation.
AO Long Period – Defines the long-term moving average for AO smoothing.
Wavelet Smoothing – Adjusts multi-scale decomposition for different market conditions.
Divergence Detection – Enables or disables real-time divergence analysis. Normalization Period – Sets the lookback period for standard deviation-based AO normalization.
Cross Signals Sensitivity – Controls crossover signal strength for buy/sell signals.
ATR Trailing Stop Multiplier – Adjusts the sensitivity of the trailing stop.
Disclaimer: This indicator is designed for educational purposes and does not constitute financial advice. Please consult a qualified financial advisor before making investment decisions.
Indicator
AO/AC Trading Zones Strategy [Skyrexio] Overview
AO/AC Trading Zones Strategy leverages the combination of Awesome Oscillator (AO), Acceleration/Deceleration Indicator (AC), Williams Fractals, Williams Alligator and Exponential Moving Average (EMA) to obtain the high probability long setups. Moreover, strategy uses multi trades system, adding funds to long position if it considered that current trend has likely became stronger. Combination of AO and AC is used for creating so-called trading zones to create the signals, while Alligator and Fractal are used in conjunction as an approximation of short-term trend to filter them. At the same time EMA (default EMA's period = 100) is used as high probability long-term trend filter to open long trades only if it considers current price action as an uptrend. More information in "Methodology" and "Justification of Methodology" paragraphs. The strategy opens only long trades.
Unique Features
No fixed stop-loss and take profit: Instead of fixed stop-loss level strategy utilizes technical condition obtained by Fractals and Alligator to identify when current uptrend is likely to be over. In some special cases strategy uses AO and AC combination to trail profit (more information in "Methodology" and "Justification of Methodology" paragraphs)
Configurable Trading Periods: Users can tailor the strategy to specific market windows, adapting to different market conditions.
Multilayer trades opening system: strategy uses only 10% of capital in every trade and open up to 5 trades at the same time if script consider current trend as strong one.
Short and long term trend trade filters: strategy uses EMA as high probability long-term trend filter and Alligator and Fractal combination as a short-term one.
Methodology
The strategy opens long trade when the following price met the conditions:
1. Price closed above EMA (by default, period = 100). Crossover is not obligatory.
2. Combination of Alligator and Williams Fractals shall consider current trend as an upward (all details in "Justification of Methodology" paragraph)
3. Both AC and AO shall print two consecutive increasing values. At the price candle close which corresponds to this condition algorithm opens the first long trade with 10% of capital.
4. If combination of Alligator and Williams Fractals shall consider current trend has been changed from up to downtrend, all long trades will be closed, no matter how many trades has been opened.
5. If AO and AC both continue printing the rising values strategy opens the long trade on each candle close with 10% of capital while number of opened trades reaches 5.
6. If AO and AC both has printed 5 rising values in a row algorithm close all trades if candle's low below the low of the 5-th candle with rising AO and AC values in a row.
Script also has additional visuals. If second long trade has been opened simultaneously the Alligator's teeth line is plotted with the green color. Also for every trade in a row from 2 to 5 the label "Buy More" is also plotted just below the teeth line. With every next simultaneously opened trade the green color of the space between teeth and price became less transparent.
Strategy settings
In the inputs window user can setup strategy setting:
EMA Length (by default = 100, period of EMA, used for long-term trend filtering EMA calculation).
User can choose the optimal parameters during backtesting on certain price chart.
Justification of Methodology
Let's explore the key concepts of this strategy and understand how they work together. We'll begin with the simplest: the EMA.
The Exponential Moving Average (EMA) is a type of moving average that assigns greater weight to recent price data, making it more responsive to current market changes compared to the Simple Moving Average (SMA). This tool is widely used in technical analysis to identify trends and generate buy or sell signals. The EMA is calculated as follows:
1.Calculate the Smoothing Multiplier:
Multiplier = 2 / (n + 1), Where n is the number of periods.
2. EMA Calculation
EMA = (Current Price) × Multiplier + (Previous EMA) × (1 − Multiplier)
In this strategy, the EMA acts as a long-term trend filter. For instance, long trades are considered only when the price closes above the EMA (default: 100-period). This increases the likelihood of entering trades aligned with the prevailing trend.
Next, let’s discuss the short-term trend filter, which combines the Williams Alligator and Williams Fractals. Williams Alligator
Developed by Bill Williams, the Alligator is a technical indicator that identifies trends and potential market reversals. It consists of three smoothed moving averages:
Jaw (Blue Line): The slowest of the three, based on a 13-period smoothed moving average shifted 8 bars ahead.
Teeth (Red Line): The medium-speed line, derived from an 8-period smoothed moving average shifted 5 bars forward.
Lips (Green Line): The fastest line, calculated using a 5-period smoothed moving average shifted 3 bars forward.
When the lines diverge and align in order, the "Alligator" is "awake," signaling a strong trend. When the lines overlap or intertwine, the "Alligator" is "asleep," indicating a range-bound or sideways market. This indicator helps traders determine when to enter or avoid trades.
Fractals, another tool by Bill Williams, help identify potential reversal points on a price chart. A fractal forms over at least five consecutive bars, with the middle bar showing either:
Up Fractal: Occurs when the middle bar has a higher high than the two preceding and two following bars, suggesting a potential downward reversal.
Down Fractal: Happens when the middle bar shows a lower low than the surrounding two bars, hinting at a possible upward reversal.
Traders often use fractals alongside other indicators to confirm trends or reversals, enhancing decision-making accuracy.
How do these tools work together in this strategy? Let’s consider an example of an uptrend.
When the price breaks above an up fractal, it signals a potential bullish trend. This occurs because the up fractal represents a shift in market behavior, where a temporary high was formed due to selling pressure. If the price revisits this level and breaks through, it suggests the market sentiment has turned bullish.
The breakout must occur above the Alligator’s teeth line to confirm the trend. A breakout below the teeth is considered invalid, and the downtrend might still persist. Conversely, in a downtrend, the same logic applies with down fractals.
In this strategy if the most recent up fractal breakout occurs above the Alligator's teeth and follows the last down fractal breakout below the teeth, the algorithm identifies an uptrend. Long trades can be opened during this phase if a signal aligns. If the price breaks a down fractal below the teeth line during an uptrend, the strategy assumes the uptrend has ended and closes all open long trades.
By combining the EMA as a long-term trend filter with the Alligator and fractals as short-term filters, this approach increases the likelihood of opening profitable trades while staying aligned with market dynamics.
Now let's talk about the trading zones concept and its signals. To understand this we need to briefly introduce what is AO and AC. The Awesome Oscillator (AO), developed by Bill Williams, is a momentum indicator designed to measure market momentum by contrasting recent price movements with a longer-term historical perspective. It helps traders detect potential trend reversals and assess the strength of ongoing trends.
The formula for AO is as follows:
AO = SMA5(Median Price) − SMA34(Median Price)
where:
Median Price = (High + Low) / 2
SMA5 = 5-period Simple Moving Average of the Median Price
SMA 34 = 34-period Simple Moving Average of the Median Price
The Acceleration/Deceleration (AC) Indicator, introduced by Bill Williams, measures the rate of change in market momentum. It highlights shifts in the driving force of price movements and helps traders spot early signs of trend changes. The AC Indicator is particularly useful for identifying whether the current momentum is accelerating or decelerating, which can indicate potential reversals or continuations. For AC calculation we shall use the AO calculated above is the following formula:
AC = AO − SMA5(AO) , where SMA5(AO)is the 5-period Simple Moving Average of the Awesome Oscillator
When the AC is above the zero line and rising, it suggests accelerating upward momentum.
When the AC is below the zero line and falling, it indicates accelerating downward momentum.
When the AC is below zero line and rising it suggests the decelerating the downtrend momentum. When AC is above the zero line and falling, it suggests the decelerating the uptrend momentum.
Now let's discuss the trading zones concept and how it can create the signal. Zones are created by the combination of AO and AC. We can divide three zone types:
Greed zone: when the AO and AC both are rising
Red zone: when the AO and AC both are decreasing
Gray zone: when one of AO or AC is rising, the other is falling
Gray zone is considered as uncertainty. AC and AO are moving in the opposite direction. Strategy skip such price action to decrease the chance to stuck in the losing trade during potential sideways. Red zone is also not interesting for the algorithm because both indicators consider the trend as bearish, but strategy opens only long trades. It is waiting for the green zone to increase the chance to open trade in the direction of the potential uptrend. When we have 2 candles in a row in the green zone script executes a long trade with 10% of capital.
Two green zone candles in a row is considered by algorithm as a bullish trend, but now so strong, that's the reason why trade is going to be closed when the combination of Alligator and Fractals will consider the the trend change from bullish to bearish. If id did not happens, algorithm starts to count the green zone candles in a row. When we have 5 in a row script change the trade closing condition. Such situation is considered is a high probability strong bull market and all trades will be closed if candle's low will be lower than fifth green zone candle's low. This is used to increase probability to secure the profit. If long trades are initiated, the strategy continues utilizing subsequent signals until the total number of trades reaches a maximum of 5. Each trade uses 10% of capital.
Why we use trading zones signals? If currently strategy algorithm considers the high probability of the short-term uptrend with the Alligator and Fractals combination pointed out above and the long-term trend is also suggested by the EMA filter as bullish. Rising AC and AO values in the direction of the most likely main trend signaling that we have the high probability of the fastest bullish phase on the market. The main idea is to take part in such rapid moves and add trades if this move continues its acceleration according to indicators.
Backtest Results
Operating window: Date range of backtests is 2023.01.01 - 2024.12.31. It is chosen to let the strategy to close all opened positions.
Commission and Slippage: Includes a standard Binance commission of 0.1% and accounts for possible slippage over 5 ticks.
Initial capital: 10000 USDT
Percent of capital used in every trade: 10%
Maximum Single Position Loss: -9.49%
Maximum Single Profit: +24.33%
Net Profit: +4374.70 USDT (+43.75%)
Total Trades: 278 (39.57% win rate)
Profit Factor: 2.203
Maximum Accumulated Loss: 668.16 USDT (-5.43%)
Average Profit per Trade: 15.74 USDT (+1.37%)
Average Trade Duration: 60 hours
How to Use
Add the script to favorites for easy access.
Apply to the desired timeframe and chart (optimal performance observed on 4h BTC/USDT).
Configure settings using the dropdown choice list in the built-in menu.
Set up alerts to automate strategy positions through web hook with the text: {{strategy.order.alert_message}}
Disclaimer:
Educational and informational tool reflecting Skyrex commitment to informed trading. Past performance does not guarantee future results. Test strategies in a simulated environment before live implementation
These results are obtained with realistic parameters representing trading conditions observed at major exchanges such as Binance and with realistic trading portfolio usage parameters.
Strategy
MultiLayer Awesome Oscillator Saucer Strategy [Skyrexio]Overview
MultiLayer Awesome Oscillator Saucer Strategy leverages the combination of Awesome Oscillator (AO), Williams Alligator, Williams Fractals and Exponential Moving Average (EMA) to obtain the high probability long setups. Moreover, strategy uses multi trades system, adding funds to long position if it considered that current trend has likely became stronger. Awesome Oscillator is used for creating signals, while Alligator and Fractal are used in conjunction as an approximation of short-term trend to filter them. At the same time EMA (default EMA's period = 100) is used as high probability long-term trend filter to open long trades only if it considers current price action as an uptrend. More information in "Methodology" and "Justification of Methodology" paragraphs. The strategy opens only long trades.
Unique Features
No fixed stop-loss and take profit: Instead of fixed stop-loss level strategy utilizes technical condition obtained by Fractals and Alligator to identify when current uptrend is likely to be over (more information in "Methodology" and "Justification of Methodology" paragraphs)
Configurable Trading Periods: Users can tailor the strategy to specific market windows, adapting to different market conditions.
Multilayer trades opening system: strategy uses only 10% of capital in every trade and open up to 5 trades at the same time if script consider current trend as strong one.
Short and long term trend trade filters: strategy uses EMA as high probability long-term trend filter and Alligator and Fractal combination as a short-term one.
Methodology
The strategy opens long trade when the following price met the conditions:
1. Price closed above EMA (by default, period = 100). Crossover is not obligatory.
2. Combination of Alligator and Williams Fractals shall consider current trend as an upward (all details in "Justification of Methodology" paragraph)
3. Awesome Oscillator shall create the "Saucer" long signal (all details in "Justification of Methodology" paragraph). Buy stop order is placed one tick above the candle's high of last created "Saucer signal".
4. If price reaches the order price, long position is opened with 10% of capital.
5. If currently we have opened position and price creates and hit the order price of another one "Saucer" signal another one long position will be added to the previous with another one 10% of capital. Strategy allows to open up to 5 long trades simultaneously.
6. If combination of Alligator and Williams Fractals shall consider current trend has been changed from up to downtrend, all long trades will be closed, no matter how many trades has been opened.
Script also has additional visuals. If second long trade has been opened simultaneously the Alligator's teeth line is plotted with the green color. Also for every trade in a row from 2 to 5 the label "Buy More" is also plotted just below the teeth line. With every next simultaneously opened trade the green color of the space between teeth and price became less transparent.
Strategy settings
In the inputs window user can setup strategy setting: EMA Length (by default = 100, period of EMA, used for long-term trend filtering EMA calculation). User can choose the optimal parameters during backtesting on certain price chart.
Justification of Methodology
Let's go through all concepts used in this strategy to understand how they works together. Let's start from the easies one, the EMA. Let's briefly explain what is EMA. The Exponential Moving Average (EMA) is a type of moving average that gives more weight to recent prices, making it more responsive to current price changes compared to the Simple Moving Average (SMA). It is commonly used in technical analysis to identify trends and generate buy or sell signals. It can be calculated with the following steps:
1.Calculate the Smoothing Multiplier:
Multiplier = 2 / (n + 1), Where n is the number of periods.
2. EMA Calculation
EMA = (Current Price) × Multiplier + (Previous EMA) × (1 − Multiplier)
In this strategy uses EMA an initial long term trend filter. It allows to open long trades only if price close above EMA (by default 50 period). It increases the probability of taking long trades only in the direction of the trend.
Let's go to the next, short-term trend filter which consists of Alligator and Fractals. Let's briefly explain what do these indicators means. The Williams Alligator, developed by Bill Williams, is a technical indicator designed to spot trends and potential market reversals. It uses three smoothed moving averages, referred to as the jaw, teeth, and lips:
Jaw (Blue Line): The slowest of the three, based on a 13-period smoothed moving average shifted 8 bars ahead.
Teeth (Red Line): The medium-speed line, derived from an 8-period smoothed moving average shifted 5 bars forward.
Lips (Green Line): The fastest line, calculated using a 5-period smoothed moving average shifted 3 bars forward.
When these lines diverge and are properly aligned, the "alligator" is considered "awake," signaling a strong trend. Conversely, when the lines overlap or intertwine, the "alligator" is "asleep," indicating a range-bound or sideways market. This indicator assists traders in identifying when to act on or avoid trades.
The Williams Fractals, another tool introduced by Bill Williams, are used to pinpoint potential reversal points on a price chart. A fractal forms when there are at least five consecutive bars, with the middle bar displaying the highest high (for an up fractal) or the lowest low (for a down fractal), relative to the two bars on either side.
Key Points:
Up Fractal: Occurs when the middle bar has a higher high than the two preceding and two following bars, suggesting a potential downward reversal.
Down Fractal: Happens when the middle bar shows a lower low than the surrounding two bars, hinting at a possible upward reversal.
Traders often combine fractals with other indicators to confirm trends or reversals, improving the accuracy of trading decisions.
How we use their combination in this strategy? Let’s consider an uptrend example. A breakout above an up fractal can be interpreted as a bullish signal, indicating a high likelihood that an uptrend is beginning. Here's the reasoning: an up fractal represents a potential shift in market behavior. When the fractal forms, it reflects a pullback caused by traders selling, creating a temporary high. However, if the price manages to return to that fractal’s high and break through it, it suggests the market has "changed its mind" and a bullish trend is likely emerging.
The moment of the breakout marks the potential transition to an uptrend. It’s crucial to note that this breakout must occur above the Alligator's teeth line. If it happens below, the breakout isn’t valid, and the downtrend may still persist. The same logic applies inversely for down fractals in a downtrend scenario.
So, if last up fractal breakout was higher, than Alligator's teeth and it happened after last down fractal breakdown below teeth, algorithm considered current trend as an uptrend. During this uptrend long trades can be opened if signal was flashed. If during the uptrend price breaks down the down fractal below teeth line, strategy considered that uptrend is finished with the high probability and strategy closes all current long trades. This combination is used as a short term trend filter increasing the probability of opening profitable long trades in addition to EMA filter, described above.
Now let's talk about Awesome Oscillator's "Sauser" signals. Briefly explain what is the Awesome Oscillator. The Awesome Oscillator (AO), created by Bill Williams, is a momentum-based indicator that evaluates market momentum by comparing recent price activity to a broader historical context. It assists traders in identifying potential trend reversals and gauging trend strength.
AO = SMA5(Median Price) − SMA34(Median Price)
where:
Median Price = (High + Low) / 2
SMA5 = 5-period Simple Moving Average of the Median Price
SMA 34 = 34-period Simple Moving Average of the Median Price
Now we know what is AO, but what is the "Saucer" signal? This concept was introduced by Bill Williams, let's briefly explain it and how it's used by this strategy. Initially, this type of signal is a combination of the following AO bars: we need 3 bars in a row, the first one shall be higher than the second, the third bar also shall be higher, than second. All three bars shall be above the zero line of AO. The price bar, which corresponds to third "saucer's" bar is our signal bar. Strategy places buy stop order one tick above the price bar which corresponds to signal bar.
After that we can have the following scenarios.
Price hit the order on the next candle in this case strategy opened long with this price.
Price doesn't hit the order price, the next candle set lower low. If current AO bar is increasing buy stop order changes by the script to the high of this new bar plus one tick. This procedure repeats until price finally hit buy order or current AO bar become decreasing. In the second case buy order cancelled and strategy wait for the next "Saucer" signal.
If long trades has been opened strategy use all the next signals until number of trades doesn't exceed 5. All trades are closed when the trend changes to downtrend according to combination of Alligator and Fractals described above.
Why we use "Saucer" signals? If AO above the zero line there is a high probability that price now is in uptrend if we take into account our two trend filters. When we see the decreasing bars on AO and it's above zero it's likely can be considered as a pullback on the uptrend. When we see the stop of AO decreasing and the first increasing bar has been printed there is a high probability that this local pull back is finished and strategy open long trade in the likely direction of a main trend.
Why strategy use only 10% per signal? Sometimes we can see the false signals which appears on sideways. Not risking that much script use only 10% per signal. If the first long trade has been open and price continue going up and our trend approximation by Alligator and Fractals is uptrend, strategy add another one 10% of capital to every next saucer signal while number of active trades no more than 5. This capital allocation allows to take part in long trades when current uptrend is likely to be strong and use only 10% of capital when there is a high probability of sideways.
Backtest Results
Operating window: Date range of backtests is 2023.01.01 - 2024.11.25. It is chosen to let the strategy to close all opened positions.
Commission and Slippage: Includes a standard Binance commission of 0.1% and accounts for possible slippage over 5 ticks.
Initial capital: 10000 USDT
Percent of capital used in every trade: 10%
Maximum Single Position Loss: -5.10%
Maximum Single Profit: +22.80%
Net Profit: +2838.58 USDT (+28.39%)
Total Trades: 107 (42.99% win rate)
Profit Factor: 3.364
Maximum Accumulated Loss: 373.43 USDT (-2.98%)
Average Profit per Trade: 26.53 USDT (+2.40%)
Average Trade Duration: 78 hours
These results are obtained with realistic parameters representing trading conditions observed at major exchanges such as Binance and with realistic trading portfolio usage parameters.
How to Use
Add the script to favorites for easy access.
Apply to the desired timeframe and chart (optimal performance observed on 3h BTC/USDT).
Configure settings using the dropdown choice list in the built-in menu.
Set up alerts to automate strategy positions through web hook with the text: {{strategy.order.alert_message}}
Disclaimer:
Educational and informational tool reflecting Skyrex commitment to informed trading. Past performance does not guarantee future results. Test strategies in a simulated environment before live implementation Strategy
Bullish/Bearish Reversal Bars Indicator [Skyrexio]Introduction
Bullish/Bearish Reversal Bars Indicator leverages the combination of candlestick reversal bar pattern and the Williams Alligator indicator to help traders in understanding where there is a high probability of market reversal or correction. Indicator works for both bearish and bullish cases. It visualizes the bearish and bullish reversal bars with red and green dots and also plots the Alligator's lips to make it more convenient for traders to understand if price is above or below lips line (more information in "Methodology and it's justification" paragraph).
Features
Market Facilitation Index(MFI) filter: with the specified parameter in settings user can choose to filter bullish and bearish reversal bars which passed the MFI condition.
Awesome Oscillator(AO) filter: with the specified parameter in settings user can choose to filter bullish and bearish reversal bars which passed the AO condition.
Alerts: user can set up the alert and have notifications when bullish/bearish reversal bar has been printed.
Methodology and it's justification
In the script’s methodology, we apply the concepts of bullish and bearish reversal bars introduced by Bill Williams in his book Trading Chaos. So, what exactly is a bullish or bearish reversal bar? At its core, it’s a candlestick pattern. A bullish reversal bar is a bar that closes in its upper half, while a bearish reversal bar closes in its lower half.
Why is this type of bar significant? Let’s look at the bullish reversal bar as an example. When the price is trending upward, forming higher highs with each candle, and we suddenly see a bullish bar that makes a new high but ultimately closes in its lower half, it signals a shift in control. Bears have taken control toward the end of that candle's period, pushing the price back down. This can be interpreted as a sign of trend weakness and a potential reversal (or at least a correction).
An additional key point is that a reversal bar often indicates a possible end to the trend. Therefore, for a reversal bar to be valid, several preceding candles should show lower highs (for bullish bars) or higher lows (for bearish bars), reinforcing the likelihood of a trend change.
The second step on methodology is the location of the bar related to Williams Alligator. The Williams Alligator Indicator, developed by Bill Williams, is a technical analysis tool that helps traders identify trends and potential turning points in the market. It consists of three lines, often called the jaw, teeth, and lips of the alligator, each representing different moving averages:
Jaw (Blue Line): A slower moving average, typically a 13-period smoothed moving average shifted 8 bars into the future.
Teeth (Red Line): A medium moving average, typically an 8-period smoothed moving average shifted 5 bars into the future.
Lips (Green Line): A faster moving average, usually a 5-period smoothed moving average shifted 3 bars into the future.
When the three lines are spread out and moving in the same direction, it suggests a strong trend (the "alligator" is "awake and feeding"). When they intertwine, the indicator suggests that the market is moving sideways, or in a range, signaling a lack of clear trend (the "alligator" is "sleeping"). Traders use the Alligator Indicator to enter trades in trending markets and avoid trades in choppy, non-trending markets.
If bullish reversal bar's high is not below and bearish reversal bar's low is not above all three Alligator's lines (jaw, lips, teeth) they cannot be interpreted as these types of bars. It can be explained as following: if we are waiting for the bullish reversal bar it shall be reversal from downtrend. If price is not below all three lines it can't be interpret as the downtrend according to this method. The opposite is true for the bearish reversal bar.
All described above are obligatory conditions for reversal bar, now let's discuss two not obligatory conditions. The first one is Market Facilitation Index (MFI) restriction. Let's briefly look what is MFI. The Market Facilitation Index (MFI) is a technical indicator that measures the price movement per unit of volume, helping traders gauge the efficiency of price movement in relation to trading volume. Here's how you can calculate it:
MFI = (High−Low)/Volume
MFI can be used in combination with volume, so we can divide 4 states. Bill Williams introduced these to help traders interpret the interaction between volume and price movement. Here’s a quick summary:
Green Window (Increased MFI & Increased Volume): Indicates strong momentum with both price and volume increasing. Often a sign of trend continuation, as both buying and selling interest are rising.
Fake Window (Increased MFI & Decreased Volume): Shows that price is moving but with lower volume, suggesting weak support for the trend. This can signal a potential end of the current trend.
Squat Window (Decreased MFI & Increased Volume): Shows high volume but little price movement, indicating a tug-of-war between buyers and sellers. This often precedes a breakout as the pressure builds.
Fade Window (Decreased MFI & Decreased Volume): Indicates a lack of interest from both buyers and sellers, leading to lower momentum. This typically happens in range-bound markets and may signal consolidation before a new move.
For our purposes we are interested in squat bars. This is the sign that volume cannot move the price easily. This type of bar increases the probability of trend reversal. In this indicator we added to enable the MFI filter of reversal bars. If potential reversal bar or two preceding bars have squat state this bar can be interpret as a reversal one.
The second additional filter is Awesome Oscillator. The Awesome Oscillator (AO), developed by Bill Williams, is a momentum indicator that measures market momentum by comparing recent price action to a longer historical context. It helps traders identify potential trend reversals and the strength of trends. Formula:
AO = SMA5(Median Price) − SMA34(Median Price)
where:
Median Price = (High + Low) / 2
SMA5 = 5-period Simple Moving Average of the Median Price
SMA 34 = 34-period Simple Moving Average of the Median Price
If AO is decreasing momentum is bearish, if increasing - bullish. According to Bill Williams approach reversal bars are the potential trades against the trend. As a result we added second filter for bullish reversal bars AO shall be decreasing, for bearish increasing.
How to use indicator
Apply it to desired chart and time frame. It works on every time frame.
Setup the filters with the "Enable MFI" and "Enable AO" checkboxes in the settings. By default they are turned on.
Analyze the price action. Indicator plotted the white line, this is the lips of an Alligator. It will help you to understand how price is moving in comparison to lips line. Indicator will print the green dot and text "BULL" below it current bar is bullish reversal. It will print the red dot and text "BEAR" above it if current bar is interpreted by algorithm as a bearish reversal.
Set up the alerts if it's needed. Indicator has two custom alerts called "Bullish reversal bar has been printed" and "Bearish reversal bar has been printed"
Disclaimer:
Educational and informational tool reflecting Skyrex commitment to informed trading. Past performance does not guarantee future results. Test indicators before live implementation. Indicator
Indicator
Momentum Alligator 4h Bitcoin StrategyOverview
The Momentum Alligator 4h Bitcoin Strategy is a trend-following trading system that operates on dual time frames. It utilizes the 1D Williams Alligator indicator to identify the prevailing major price trend and seeks trading opportunities on the 4-hour (4h) time frame when the momentum is turning up. The strategy is designed to close trades if the trend fails to develop or holding position if price continues increasing without any significant correction. Note that this strategy is specifically tailored for the 4-hour time frame.
Unique Features
2-layers market noise filtering system: Trades are only initiated in the direction of the 1D trend, determined by the Williams Alligator indicator. This higher time frame confirmation filters out minor trade signals, focusing on more substantial opportunities. At the same time, strategy has additional filter on 4h time frame with Awesome Oscillator which is showing the current price momentum.
Flexible Risk Management: The strategy exclusively opens long positions, resulting in fewer trades during bear markets. It incorporates a dynamic stop-loss mechanism, which can either follow the jaw line of the 4h Alligator or a user-defined fixed stop-loss. This flexibility helps manage risk and avoid non-trending markets.
Methodology
The strategy initiates a long position when the d-line of Stochastic RSI crosses up it's k-line. It means that there is a high probability that price momentum reversed from down to up. To avoid overtrading in potentially choppy markets, it skips the next two trades following a winning trade, anticipating sideways movement after a significant price surge.
This strategy has two layers trades filtering system: 4h and 1D time frames. The first one is awesome oscillator. It shall be increasing and value has to be higher than it's 5-period SMA. This is an additional confirmation that long trade is opened in the direction of the current momentum. As it was mentioned above, all entry signals are validated against the 1D Williams Alligator indicator. A trade is only opened if the price is above all three lines of the 1D Alligator, ensuring alignment with the major trend.
A trade is closed if the price hits the 4h jaw line of the Alligator or reaches the user-defined stop-loss level.
Risk Management
The strategy employs a combined approach to risk management:
It allows positions to ride the trend as long as the price continues to move favorably, aiming to capture significant price movements. It features a user-defined stop-loss parameter to mitigate risks based on individual risk tolerance. By default, this stop-loss is set to a 2% drop from the entry point, but it can be adjusted according to the trader's preferences.
Justification of Methodology
This strategy leverages Stochastic RSI on 4h time frame to open long trade when momentum started reversing to the upside. On the one hand, Stochastic RSI is one of the most sensitive indicator, which allows to react fast on the potential trend reversal. On the other hand, this indicator can be too sensitive and provide a lot of false trend changing signals. To eliminate this weakness we use two-layers trades filtering system.
The first layer is the 4h Awesome oscillator. This is less sensitive momentum indicator. Usually it starts increasing when price has already passed significant distance from the actual reversal point. The strategy opens long trade only is Awesome oscillator is increasing and above it's 5-period SMA. This approach increases the probability to filter the false signals during the choppy market or if the reversal is false.
The second layer filter is the Williams Alligator indicator on 1D time frame. The 1D Alligator serves as a filter for identifying the primary trend and increases probability to avoid the trades with low potential because trading against major trend usually is more risky. It's much better to catch the trend continuation than local bounce.
Last but not least feature of this strategy is close trades condition. It uses the flexible approach. First of all, user can set up the fixed stop-loss according to his own risk-tolerance, by default this value is 2% of price movement. It restricts the potential loss at the moment when trade has just been opened. Moreover strategy utilizes the 4h Williams Alligator's jaw line to exit the trade. If price fell below it trade is closed. This approach helps to not keep open trade if trend is not developing and hold it if price continues going up.
Backtest Results:
Operating window: Date range of backtests is 2021.01.01 - 2024.05.01. It is chosen to let the strategy to close all opened positions.
Commission and Slippage: Includes a standard Binance commission of 0.1% and accounts for possible slippage over 5 ticks.
Initial capital: 10000 USDT
Percent of capital used in every trade: 50%
Maximum Single Position Loss: -3.04%
Maximum Single Profit: +29.67%
Net Profit: +6228.01 USDT (+62.28%)
Total Trades: 118 (24.58% win rate)
Profit Factor: 1.71
Maximum Accumulated Loss: 1527.69 USDT (-11.52%)
Average Profit per Trade: 52.78 USDT (+0.89%)
Average Trade Duration: 60 hours
These results are obtained with realistic parameters representing trading conditions observed at major exchanges such as Binance and with realistic trading portfolio usage parameters.
How to Use:
Add the script to favorites for easy access.
Apply to the 4h timeframe desired chart (optimal performance observed on the BTC/USDT).
Configure settings using the dropdown choice list in the built-in menu.
Set up alerts to automate strategy positions through web hook with the text: {{strategy.order.alert_message}}
Disclaimer:
Educational and informational tool reflecting Skyrex commitment to informed trading. Past performance does not guarantee future results. Test strategies in a simulated environment before live implementation Strategy
Indicator
Indicator
Indicator
Strategy
Indicator
Indicator
+ Awesome OscillatorHi again. I have another indicator that I think is pretty neat.
I had the idea of creating an Awesome Oscillator for my Ultimate MA, just to see what kind of signals it might produce. If you're not familiar with my UMA you should go take a look at it, but essentially it is just an average of eight different length MAs, and if you're not familiar with the Awesome Oscillator, it is simply a comparison of the gap between two different moving averages (traditionally a 5 and 34 SMA) plotted as a histogram below the price chart. The two UMAs I was comparing in this version of the AO were the Hull and Simple. It looked okay, but I thought due to the nature of the movements of these MAs, that it was necessary to add something to this indicator in order to validate its creation and make it truly useful
I came to the idea of simply comparing the closing price of the asset on the chart to both the Awesome Oscillator moving averages. What this effectively does is gives you a representation of the moving averages on the chart (assuming you are using those same MAs) as an oscillator below the chart, enabling you to remove the moving averages from your price chart (obviously if you so choose). For me, I like this because fewer things on the chart makes it easier for me to see the price action and structure of the market clearly, or add something like a tWAP or two.
So, like, "how exactly would I use this indicator?"" you're probably asking.
First off: the Awesome Oscillator. By default it is a faintly shaded area, and is the least obvious part of the indicator.
Second: the plotted line. This is what I call the baseline (if you're familiar with NNFX, then you know what this is). It's basically your bias moving average (this means it defines, based on its lookback or length, whether momentum is bullish, bearish or ranging). In the case of the oscillator though, the ZERO line represents the baseline, and the oscillating line represents price in relation to it. If the line is above the zero line then price is above the moving average, and vice versa if it's below. The farther from the center line the baseline price is the greater the volatility,
Third: the histogram. This is the faster moving average, and same rules apply to it as your baseline. You can think of your fast moving average as a trade entry trigger, or an exit. It shows more immediate momentum shifts.
What's interesting about the relationships of all three of these things is that you don't actually NEED all three displayed. Because the Awesome Oscillator is a relation of your two moving averages, and the baseline and histogram are representational of the price relative to those two moving averages, you will notice that when the histogram (fast MA) flips up or down is the same exact time that the baseline price dips into the AO. The AO is effectively a moving average on that. So you can run this with just the AO and Baseline, or just the Baseline and fast MA histogram. To get started, I might recommend keeping your moving averages that you use on the chart just so you can see how this indicator works.
Both the fast MA and Baseline will show nice divergences (divergence indicator is added if you want to use it). And I've added Donchian Channels as upper and lower bounds that act neatly as support or resistance (especially effective if you're using my UMA with Bollinger Bands, or Magic Carpet Bands).
I've also done the usual colored candles thing, which gives you another great reason to get the moving averages off your chart. There are of course alerts for conditions that one might need to be alerted to as well.
Below are some images of different ways you might set these up using the default moving average/baseline settings. In all of these I've left the moving averages on the price chart (with the addition of a 233 SMA) so you can see the relationship between the indicators.
Right here is the indicator set up with just the awesome oscillator and baseline price. Gives a cleaner overall look. You can see that every time the baseline crosses the awesome oscillator is when price crosses the 8 SMA. Candle colors are based on if candle closes above baseline or below.
This is the indicator set up without the awesome oscillator. Here you can see candle closes over the 8 SMA (fast moving average) are shown by the histogram. Candle coloring is still the same as the above image.
This image looks identical to the first, except that the candle coloring is different. This time it is based on the 8 SMA (same as the baseline entering the awesome oscillator).
And the final example image. This one depicts the awesome oscillator and the fast moving average histogram. Candle coloring is based on the awesome oscillator. This can be a great way to visualize momentum because the awesome oscillator is depicting the crossing of the moving averages. A lot of people poo-poo moving average crosses, but I'd say they're wrong. Well, they're right and wrong. Depends on the MAs you're using. The power in moving average crosses is in their ability to show bullish or bearish momentum (or ranging behavior if they continually cross over each other). If you're using slow moving averages, then crosses are often very late (hence so many people who don't know saying, "but moving average crosses are too laggy". Here you might try changing these and having the baseline be faster than the UMA, and actually plot on chart the UMA (or some other moving average). These are just some thoughts.
Anyway, I hope this indicator proves useful to you all. I think for anyone looking to look at price action a bit more, but is used to using moving averages, this could be a really useful indicator. Most oscillating indicators (if not all) are built around moving averages, but they're never explained in such a way as I'm explaining how this one works (I don't think). I think knowing this could help many traders come to a deeper understanding of what the indicator they're using is actually doing. Indicator
