Indicator
Megabar Breakout (Range & Volume & RSI)Hey there,
This strategy is based on the idea that certain events lead to what are called Megabars. Megabars are bars that have a very large range and volume. I wanted to verify whether these bars indicate the start of a trend and whether one should follow the trend.
Summary of the Code:
The code is based on three indicators: the range of the bar, the volume of the bar, and the RSI. When certain values of these indicators are met, a Megabar is identified. The direction of the Megabar indicates the direction in which we should trade.
Why do I combine these indicators?
I want to identify special bars that have the potential to mark the beginning of a breakout. Therefore, a bar needs to exhibit high volume, have a large range (huge price movement), and we also use the Relative Strength Index (RSI) to assess potential momentum. Only if all three criteria are met within one candle, do we use this as an identifier for a megabar.
Explanation of Drawings on the Chart:
As you can see, there is a green background on my chart. The green background symbolizes the time when I'm entering a trade. Only if a Megabar happens during that time, I'm ready to enter a trade. The time is between 6 AM and 4 PM CET. It's just because I prefer that time. Also, the strategy draws an error every time a Megabar happens based on VOL and Range only (not on the RSI). That makes it pretty easy to go through your chart and check the biggest bars manually. You can activate or deactivate these settings via the input data of the strategy.
When Do We Enter a Trade?
We wait for a Megabar to happen during our trading session. If the Megabar is bullish, we open a LONG trade at the opening price of the next candle. If the Megabar is bearish, we open a SHORT trade at the opening price of the next candle.
Where Do We Put Our Take Profit & Stop Loss?
The default setting is TP = 40 Pips and SL = 30 Pips. In that case, we are always trading with a risk-reward ratio of 1.33 by default. You can easily change these settings via the input data of the strategy.
Strategy Results
The criteria for Megabars were chosen by me in a way that makes Megabars something special. They are not intended to occur too frequently, as the fundamental idea of this strategy would otherwise not hold. This results in only 37 closed trades within the last 12 months. If you change the criterias for a megabar to a milder one, you will create more Megabars and therefore more trades. It's up to you. I have adapted this strategy to the 30-minute chart of the EURUSD. In the evaluation, we consider a period of 12 months, which I believe is sufficient.
My default settings for the indicators look like this:
Avg Length Vol 20
Avg Multiplier Vol 3
Avg Length Range 20
Avg Multiplier Range 4
Value SMA RSI for Long Trades 50
Value SMA RSI for Short Trades 70
IMPORTANT: The current performance overview does not display the results of these settings. Please change the settings to my default ones so that you can see how I use this strategy.
I do not recommend trading this strategy without further testing. The script is meant to reflect a basic idea and be used as a tool to identify Megabars. I have made this strategy completely public so that it can be further developed. One can take this framework and test it on different timeframes and different markets. Strategy
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HighLowBox 1+3TF Enclose in a square high and low range in each timeframe.
Shows price range and duration of each box.
In current timeframe, shows Fibonacci Scale inside(23.6%, 38.2%, 50.0%, 61.8%, 76.4%)/outside of each box.
Outside(161.8%,261.8,361.8%) would be shown as next target, if break top/bottom of each box.
1st box for current timeframe.(default: Chart)
2nd-4th box for higher timeframes.(default: higher1,higher2,higher3)
static timeframes can also be used.
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Range H/L Buy and Sell SignalThe "Range H/L Buy and Sell Signal" indicator is designed to identify potential buy and sell signals based on a specified price range and market volatility. This indicator can be used in the PulseWire platform to assist traders in making informed decisions.
The indicator allows customization of several parameters to adapt to different trading strategies. These parameters include the start and end times for the price range, the volatility threshold, and the desired breakout conditions.
To begin, the indicator calculates the range start and end timestamps based on the provided hours and minutes. This defines the time period within which the indicator will analyze price movements.
Next, the indicator determines the highest high (High) and lowest low (Low) within the specified price range. These levels represent the upper and lower boundaries of the range and act as potential breakout points.
Volatility is also taken into account to filter out false signals. The indicator calculates the true range and the average true range over a period of 14 bars. The true range measures the price range from the current high to low, while the average true range provides an indication of market volatility.
Based on the breakout conditions and the volatility threshold, buy and sell signals are generated. A buy signal occurs when the closing price crosses above the High and the true range is greater than the volatility threshold multiplied by the average true range. Conversely, a sell signal is triggered when the closing price crosses below the Low and the true range exceeds the volatility threshold multiplied by the average true range.
The indicator visually displays the High and Low levels as plotted lines on the chart. Additionally, it marks the buy signals with green labels labeled "BUY" below the corresponding bars and the sell signals with red labels labeled "SELL" above the bars.
It is important to note that this indicator should be used in conjunction with other technical analysis tools and indicators for comprehensive market analysis. Trading always carries risks, and it is crucial to exercise caution and conduct thorough analysis before making any trading decisions.
Divergent Trades LLC:
Disclaimer: The information provided by the Divergent Trades LLC indicator is for educational and informational purposes only. It should not be considered financial advice or a recommendation to buy, sell, or trade any financial instrument. Divergent Trades LLC is not responsible for any losses incurred as a result of using this indicator. Trading in the financial markets carries a high level of risk and may not be suitable for all investors. Before making any investment decisions, please consult with a financial advisor and do your own due diligence. Past performance is not indicative of future results. By using the Divergent Trades LLC indicator, you acknowledge that you have read and understand this disclaimer and agree to its terms and conditions. Indicator
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Zazzamira 50-25-25 Trend System Alerts OnlyPublishing my trading system script. It consist of several conditions to happen in order to open a trade. Work best on ES/MES 5 minute timeframe.
I like to use it with this settings:
- UTC -6 (don't tick Exchange Timezone)
and rest as default
To enter a trade, the following conditions must be met: Entry 1: the opening range (8:30AM - 9:15AM UTC-6) must be defined and the price must close above or below the opening range on the 5-minute timeframe. This entry condition defines the trade direction (above = long / below = short). Once the opening range is defined, the Trend-Based Fib Extension is applied from the range high to the range low (and vice versa). Fib levels are required for Exit conditions. Entry 2: the 8 - 27 - 67 - 97 EMAs must be defined. If the EMAs value order is 8 > 27 > 67 > 97, long-only trades are allowed. If the EMAs value order is 8 < 27 < 67 < 97, short-only trades are allowed. This entry condition filters fake breakouts of Entry 1. Entry 3: no trades are allowed after 12:59 UTC-6 (2PM EST). Entry 4: if Entry 1, Entry 2, and Entry 3 conditions are valid and the price hasn't reached the 23.6% Fib line, an entry order can be set at the range high/long with 4 contracts. To exit a trade, the following conditions must be met: Exit 1 (Stop loss): set a trailing stop based on 2.1x ATR (14) from entry. Exit 2: take 50% profits at the 23.6% Fib and leave trailing stop untouched. Exit 3: if Exit 2 triggers, take 50% (25% of total entry) off at 61.8% Fib, leaving Exit 2 trailing stop values valid. Exit 4: exit the full position at the FIB 100% value. Exit 5: all trades must be closed at 3pm UTC-6 (4PM EST). So basically Take Profit are 50%-25%-25% of position.
Code has been written by © Hiubris_Indicators who has been an amazing coder and gave me the possibility to make this script public so a really big shoutout to him.
This indicator only works for alerts, please check version without alerts to backtest or tweaks. This indicator is meant to be used to automate the system via webhooks Indicator
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Strategy: Range BreakoutWhat?
In the price action, levels have a significant role to play. Based on the price moving above/below the levels - the underlying instrument shows some price-action in the direction of breakout/breakdown.
There are plenty of ways level can be determined. Levels are the decision point to take a trade or not. But if we make the level derivation complex, then the execution may get hamper.
This strategy script, developed in PineScript v5, is our attempt at solving this problem at the core by providing this simple, yet elegant solution to this problem.
It's essentially an attempt to Trade Simple by drawing logical (horizontal) lines in the chart and take actions, after multiple associated parameters confirmation, on the breakout / breakdown of the levels.
How?
Let us explain how we are drawing the levels.
We are depending on some of the parameters as described below:
Open Range : During intraday movement, often if prices move beyond a particular level, it exibits more movement in the same swing in same direction. We found out, through our back testing for Indian Indices like NSE:NIFTY , NSE:BANKNIFTY or NSE:CNXFINANCE the first 15m (i.e 09:15 AM to 09:30 AM, IST) is one of such range. For Indian stocks, it is 9:15 to 9:45. And for MCX MCX:CRUDEOIL1! it's 5:00 pm to 6:00 pm. There are our first levels.
PDHCL : Previous Day High, Close, Low. This is our next level
VWAP : The rolling VWAP (volume weighted average price)
In the breakout/breakdown of the Open Range and Previous Day High/Low, we are taking the trade decisions as follows using CEST principle:
C onditions :
If current bar's (say you are in 5m timeframe) closing is broken out the Open Range High or Previous Day High, taken a Buy/Long decision (let's say buying a Call Option CE or selling a Put Option PE or buying the future or cash).
If current bar's (say you are in 5m timeframe) closing is broken down the Open Range Low or Previous Day Low, taken a Sell/Short decision (let's say buying a Put Option CE or selling a Call Option PE or selling the future or cash).
Additionally, and optionally (default ON, one can turn off): we are checking various other associated multiple confirmations as follows:
1. Momentum : Checking 14-period RSI value is more than 50 or less than 50 (all parameters like period, OB, OS ranges are configurable through settings)
2. Current bar's volume is more than the last 20 bars volume average. How much more - that multiplier is also configurable. (default is 1)
3. The breakout candle is bullish (green) or bearish (red).
E ntry :
All of these happens only on the closing of the candle . Means: Non Repainting! .
Clearly in the chart we are showing as green up arrow BO (breakout for buy) and red down arrow BD (breakdown for sell) to take your decision process smooth.
So, on the closing of the decision BO/BD candle we are entering the trade (with a thumping heart and nail biting ...)
S top Loss :
We are relying on the time tasted (last 40 years) mechanism of Average True Range (ATR) of default 14 period. This default period is also configurable.
So for Long trades: the 14 period ATR low band is the SL.
For Short trades: the 14 period ATR high band is the SL.
T arget :
We are depending on the thump rule of 1:2 Risk Reward. It's simple and effective. No fancy thing. We are closing the trade on double the favorable price movement compared to the SL placed. Of course, this RR ratio is confiurable from the settings, as usual.
What's Unqiue in it?
The utter simplicity of this trading mechanism. No fancy things like complex chart pattern, OI data, multiple candlestick patterns, Order flow analysis etc.
Simple level determination,
Marking clearly in the chart.
Making each parameter configurable in Settings and showing tooltip adjacent to the parameter to make you understand it better for your customization,
Wait for the candle close, thus eliminating the chances of repainting menace (as much as possible)
Additional momentum and volume check to trade entry confirmation.
Works with normal candlestick (nothing special ones like HA ...)
Showing everything as a Summary Table (which, again can be turned off optionally) overlaying at the bottom-right corner of the chart,
Optionally the Summary Table can be configured to alert you back (say you get it notified in your email or SMS).
That way, a single, simple, effective trade setup will ease your journey as smooth sail as possible.
Mentions
There are plenty of friends from whom time to time we borrowed some of the ideas while working closely together over last one year.
From pulsewire community, we took the spirit of @zzzcrypto123 awesome work done long back (in 2020) as the indicator "ORB - Opening Range Breakout". (We tried to reach him for his explicit consent, unable to catch hold of him).
Some other publicly available materials we have consulted to get the additional checks (like RSI, volume).
Lat word
Use it please and thank you for your constant patronage in following us in this awesome platform. Let's keep growing together.
Disclaimer :
This piece of software does not come up with any warrantee or any rights of not changing it over the future course of time.
We are not responsible for any trading/investment decision you are taking out of the outcome of this indicator.
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