Rejection or reversal patterns
Green Circle - Typical SellingClimax, Stopping and Bag Holding signal patterns as per VSA . Strong price action but price rejection at lower level.
Red Circle - Typical Buying Climax, End Of Rising, Supply Overcoming Demand signal patterns as per VSA . Strong price action but price rejection at higher level.
Green Square - Typical TrendReversal candle as per VSA . breakout bar immediately after a breakout bar and the previous one or cover max part of it.
Red Square - Typical TrendReversal candle as per VSA . breakout bar immediately after a breakout bar and the previous one or cover max part of it.
Momentum breakout patterns
Blue/Green Star - breakouts. Downthrust bars with significant price action. Green if smaller low weak otherwise blue.
Red/Pink Star - breakouts. Downthrust bars with significant price action. Red if low higher weak else pink.
Green - with strong price action. Good to enter long towards close with SL of day low. System suggests quantity as per 2% trading rule. One can play with risk defined option strategies or cash segment as per quantity suggested.
Red - with strong price action. Good to enter short towards close with SL of day high. System suggests quantity as per 2% trading rule. One can play with risk defined option strategies like bear put spread or bear call spreads or go for hedged shorts.
Pink - with muted price action. Trail SL. Better to avoid trading these candles.
Light blue - with muted price action. Trail SL. Better to avoid trading these candles.
Plotted Ribbon gives a sense of the strength of momentum. When each MA is placed with wide gaps momentum is strong. When there is confluence, chances of trend strength are weakening. Background color of the chart green indicates bullishness in the underlying and red indicates that pressure in the scrip. If the background color is green and you see one Blue/Green star candle it's good to go long. If the background color is red and you see one Red/Pink star candle it's good to go short.
A word of caution: Trading breakouts is very good. But you need to prepare for breakout failures. Here the system picks wide range bars for going long or short that means SL is wide probably 3% and above. Also if you notice after a strong PV breakout if price sustains below that it can see long unwinding pressure and simillary after a strong PV breakdown, if price sustains above the breakdown candle, chances of short covering is higher. Here money management and risk management becomes very important. Same has been included as part of the indicator to give you an optimal quantity for trade to keep the drawdowns lower. If you enable (1) RECO message and (2) Show Strategy (Else Study)? options then it shows a RECO box with quantity calculated as per 2% loss per trade rule. Lot of risk management, scale up/down for compounding is also available. You may try out those options one by one.
This indicator needs to be used along with the “VSA + Oscillator ”, because this setup relies on VSA ( Spread Analysis). The overall usage will be provided through a demo to the subscribing users. In order to gain access to this indicator you may contact me using the below signature.
2) Additional filters added to reduce no of signals. Ex: In nifty 15M scalper no of trades reduced from 587 to 507.
3) Additional SuperTrend setup is modified to give you a trend direction.
Few more cosmetic changes. Its a major change and all are suggested to upgrade the indicator for best results.
2) Made strategy default to show the RECO label always. If one doesn't want this, then he can uncheck and change the "Show Strategy (Else Study)?" option to false.
3) One can change Label EMA type now. Its configurable under option "Type Of Moving Average (Label)"
A major update, ensure you upgrade and change version to latest version to get the benefits.
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