OPEN-SOURCE SCRIPT
5EMA : Power Of Stocks (SHORT)
This indicator is based on the original strategy by Subasish Pani, also known as Power of Stock. It’s designed for traders who focus on scalping and short setups, leveraging the 5 EMA as the mean point of price. The strategy aims to identify potential price reversals when the price moves away from its mean and shows signs of losing momentum in an uptrend.
How It Works
The 5 EMA serves as a reference for the mean price. This indicator focuses on price action around the 5 EMA to identify high-probability short setups. The key concept is to spot moments where the price appears overextended above the 5 EMA and prepares for a potential reversal.
Key Elements of the Strategy:
Qualifying Candle:
The candle must close above the 5 EMA, reinforcing the uptrend scenario.
The candle’s low must not touch the 5 EMA, showing the price is extended from its mean.
Entry Signal:
A short trade is triggered when the price breaks below the low of the qualifying candle.
This breakdown indicates a potential reversal and weakening of the uptrend.
Risk Management:
Stop-loss is set above the high of the qualifying candle.
Take-profit levels are determined using support zones or a predefined risk-to-reward ratio.
Features
Automatic Detection: The indicator identifies qualifying candles and marks them on the chart.
Breakdown Alerts: Receive alerts when the price breaks below the qualifying candle's low for potential entry opportunities.
Customizable Settings: Adjust the EMA length and other parameters to suit your trading style or different market conditions.
Multi-Market Compatibility: Works on stocks, forex, indices, and cryptocurrencies.
Who Should Use This Indicator?
This tool is ideal for scalpers and short-term traders looking for a systematic approach to capitalize on reversals in uptrending markets. Whether you’re trading stocks, forex, or crypto, this strategy offers a disciplined way to time your short entries.
Note: Always test any trading strategy in a demo environment and backtest thoroughly before applying it in live markets. Risk management is crucial in scalping strategies to protect your capital.
How It Works
The 5 EMA serves as a reference for the mean price. This indicator focuses on price action around the 5 EMA to identify high-probability short setups. The key concept is to spot moments where the price appears overextended above the 5 EMA and prepares for a potential reversal.
Key Elements of the Strategy:
Qualifying Candle:
The candle must close above the 5 EMA, reinforcing the uptrend scenario.
The candle’s low must not touch the 5 EMA, showing the price is extended from its mean.
Entry Signal:
A short trade is triggered when the price breaks below the low of the qualifying candle.
This breakdown indicates a potential reversal and weakening of the uptrend.
Risk Management:
Stop-loss is set above the high of the qualifying candle.
Take-profit levels are determined using support zones or a predefined risk-to-reward ratio.
Features
Automatic Detection: The indicator identifies qualifying candles and marks them on the chart.
Breakdown Alerts: Receive alerts when the price breaks below the qualifying candle's low for potential entry opportunities.
Customizable Settings: Adjust the EMA length and other parameters to suit your trading style or different market conditions.
Multi-Market Compatibility: Works on stocks, forex, indices, and cryptocurrencies.
Who Should Use This Indicator?
This tool is ideal for scalpers and short-term traders looking for a systematic approach to capitalize on reversals in uptrending markets. Whether you’re trading stocks, forex, or crypto, this strategy offers a disciplined way to time your short entries.
Note: Always test any trading strategy in a demo environment and backtest thoroughly before applying it in live markets. Risk management is crucial in scalping strategies to protect your capital.
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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Disclaimer
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