[E5 Trading] Setups & Trends

22 Jan 2023

E5 Trading Setups & Trends helps traders identify buy and sell opportunities through established trading techniques, including proven trade setups, bullish and bearish trend reversal signals, price strength, stop-loss and take-profit guardrails, a real-time divergences confluence system, local support and resistance levels, and anchored volume-weighted average price features.

These powerful capabilities help traders of all experience levels build confluence to improve the probability of success for each trade.

Trade Setups[\b]

• Select from one (1) of three (3) trade setups for LONG and SHORT signals: 1. Transition; 2. Momentum; 3. Phase Shift. All trade setups work on all timeframes.
  
• Several factors impact the consistent accuracy of algorithm-based setups over a long duration.
  
• Examples include volatile global markets, liquidity, and an evolving mix of retail and institutional participants in a specific asset.
  
• Therefore, traders must have various trade setup options and signals available to help them identify confluence.
  
• Traders should evaluate the accuracy of each trade setup under existing market conditions and select the best one.
  
• Trade setup signals are just one feature to consider as part of a discretionary trading system and should not be considered as stand-alone buy and sell signals.
  
• They can be used as an effective market screener to help the trader quickly narrow the playing field of tradeable assets based on current market conditions.
  
• Traders should seek confluence among several indicator suite features before entering or exiting a trade.
  
• Use the color selector boxes to change LONG and SHORT label colors.
  

Color Candles per Setup[\b]

• Toggle (Color Candles per Setup) to change candle coloring based on LONG and SHORT signals generated by Trade Setups.
  
• All candles after a LONG signal plot with Bull candle coloring until a SHORT signal generates.
  
• All candles after a SHORT signal plot with Bear candle coloring until a LONG Signal generates.
  
• Enabling this feature allows the trader to observe and interpret the price trends of the asset more easily.
  

Squeeze Filter[\b]

• The Squeeze Filter eliminates all trade setups inside a low-volatility squeeze where trade setup signals are typically less reliable and where the future trend can be more challenging to determine.
  
• This feature helps traders avoid potentially noisy signals, and instead focus on Squeeze Early Entry and Squeeze Breakout signals generated by the E5 Trading Squeezes and Breakouts indicator.
  
• Disciplined traders who play squeeze breakout price action can perform well with this strategy as long as good risk management is practiced (i.e., responsible position-sizing and use of a stop-loss on every trade).
  
• Toggle Squeeze Filter (On) to eliminate all trade setups inside a low-volatility squeeze.
  

Trend Reversal Signals[\b]

• Trend Reversal Signals (R) identify the potential end of a local trend and the beginning of a new one. Default (On). Default drop-down (Potential Reversal).
  
• All reversal signals are deemed POTENTIAL reversals until price action of the next one or two candles after the reversal signal confirms the reversal.
  
• Reversal signals may be CONFIRMED MANUALLY by a simple method described below or CONFIRMED AUTOMATICALLY using the Trend Reversal Signals drop-down menu.
  
• To manually confirm a potential bullish reversal, the close of the 1st or 2nd candle following the reversal candle must be greater than the high (wick) of the reversal candle.
  
• To manually confirm a potential bearish reversal, the close of the 1st or 2nd candle following the reversal candle must be less than the low (wick) of the reversal candle.
  
• To use automated confirmation capabilities, select either "1-Candle Confirmed" or "2-Candle Confirmed" from the drop-down menu.
  
• Selecting "1-Candle Confirmed" will result in any potential reversal signal (R) updating to a faded/transparent reversal signal (R) if not confirmed by the next candle only.
  
• Sometimes there is market indecision (i.e., sideways price action) after a potential reversal signal, requiring the use of a 2nd candle to confirm the reversal.
  
• Selecting "2-Candle Confirmed" will result in any potential reversal signal (R) updating to a faded/transparent reversal signal (R) if not confirmed by the next one or two candles.
  
• "Reversals Sensitivity" drop-down to provide three (3) sensitivity levels for reversal signals.
  
• The available drop-down options are: "Less Signals", "Default", and "More Signals".
  
• "Less Signals" decreases the number of Potential Reversals compared to Default, and "More Signals" increases the number of Potential Reversals compared to Default.
  
• This feature provides more opportunities to play reversals while still helping to eliminate all non-actionable reversal signals using the auto-confirmation capability.
  
• Play the probabilities and avoid fake-outs: IGNORE any reversal signal not confirmed by the above method.
  
• Use the color selector boxes to change the bullish and bearish reversal signal colors.
  

Price Strength[\b]

• Price Strength Signals were designed to flag the onset of potentially explosive price moves based on market conditions and price action. Default (Off).
  
• Bull price strength default (large triangles with bull candle coloring).
  
• Bear price strength default (large triangles with bear candle coloring).
  

Dynamic Stop-Loss (SL) | Take-Profit (TP) Guardrails[\b]

• This feature helps traders to effectively time trade entries/exits, automate the calculation of stop-loss | take-profit levels, and stay in trades while price action remains inside its calculated normal volatility range.
  
• Due to its dynamic real-time update capability and utility as a trailing stop-loss | take-profit automation tool, this feature can be a powerful addition to both manual and algorithm (i.e., bot-based) trading systems.
  
• Toggle (SL | TP Guardrails) to view dynamic stop-loss | take-profit levels based on user-defined Length and Multiple settings.
  
• Define the Length (default: 14) and Multiple (default: 1.5) to establish the desired dynamic stop-loss | take-profit parameters.
  
• Use the color selector boxes to change the Stop-Loss and Take-Profit guardrail colors.
  
• A simple example trading technique using this feature is to go long when the guardrail transitions from being above price action (i.e., resistance) to below price action (i.e., support). Vice versa for short trades.
  
• Traders monitoring a manual trade can move their stop-loss | take-profit level based on the calculated bull or bear guardrail.
  
• Traders using a 3rd-party bot-trading platform can set up a webhook within a TradingView alert to automate their trade based on price action crossing the dynamic stop-loss | take-profit threshold.
  

Real-Time Divergences Confluence[\b]

• Divergences occur when a technical indicator, like an oscillator, moves in the opposite direction of price.
  
• They often serve as an early warning of a trend reversal (via regular divergence signals) or trend continuation (via hidden divergence signals).
  
• Divergences flag in real-time directly on the price chart and provide a strength rating (1 to 6) based on the number of oscillators that simultaneously detect a divergence.
  
• Bullish divergences flag below price action and bearish divergences flag above price action to help traders detect potential trend reversals (regular divergences) or trend continuations (hidden divergences).
  
• This indicator evaluates a total of six (6) oscillators simultaneously to identify divergences compared to price action.
  
• Each divergence is assigned a strength rating (1 to 6) based on the number of oscillators that simultaneously detect a divergence.
  
• The real-time nature of the divergences will cause the divergence line to re-plot with each successive candle until the divergence confirms at the end of the trend.
  
• The divergence strength rating will also continuously update with each successive candle based on the number of divergences detected at that time.
  
• When the divergence confirms, the divergence line and label on the chart will update from a lighter/transparent shade to a darker/opaque shade.
  
• Use the color selector to change label and line colors.
  
• Use line selector to change the line style. Default (solid line).
  
• Toggle (Regular Divergence (Bull)) to display regular bullish divergences. Default (Off).
  
• Toggle (Regular Divergence (Bear)) to display regular bearish divergences. Default (Off).
  
• Toggle (Hidden Divergence (Bull)) to display hidden bullish divergences. Default (Off).
  
• Toggle (Hidden Divergence (Bear)) to display hidden bearish divergences. Default (Off).
  

Local Support | Resistance[\b]

• Local Support and Resistance levels are calculated automatically based on price action and represent supply and demand zones to help traders establish buy and sell targets, stop-loss, and take-profit levels.
  
• Awareness of key support and resistance levels is critical for developing a trading plan, trading level-by-level, and avoiding unnecessary risk (e.g., longing into resistance or shorting into support).
  
• Local Support and Resistance levels are especially useful when combined with other indicator suite features to identify confluence.
  
• Toggle (Local Support | Resistance) to display key support and resistance levels. Default (Off).
  

Anchored Volume-Weighted Average Price (AVWAP)[\b]

• Anchored Volume-Weighted Average Price (AVWAP) helps traders determine the fair market value of an asset based on the volume-weighted average price over a user-specified period.
  
• This fair market value can establish areas of support and resistance on the chart with the idea that price is attracted back to the fair market value over time. Default (Off).
  
• The AVWAP line then serves as a critical support | resistance level that price action will eventually test.
  
• Select the AVWAP source from the drop-down box. Default (hlc3) which means (High + Low + Close) / 3. Use the color selector box to change the color of the AVWAP line.
  
• AVWAP Start (Option 1): Use the date and time selectors to select the Start position of the AVWAP line.
  
• AVWAP Start (Option 2): Change the AVWAP Start position directly on the chart by moving the vertical line that appears to a specific candle (e.g., pivot high, pivot low, day/week start).
  
• First, click on the AVWAP line, then drag the vertical AVWAP position line on the chart to the desired candle.
  
• Toggle (AVWAP Support | Resistance) to display a horizontal support | resistance zone based on the current Anchored Volume-Weighted Average Price.
  
• When price action is above the AVWAP, the horizontal AVWAP support | resistance zone acts as support with bullish zone coloring.
  
• When price action is below the AVWAP, the horizontal AVWAP support | resistance zone acts as resistance with bearish zone coloring.
  

11 Feb 2023

Catatan Rilis

• Added option to display Confirmed Reversal labels (CR) using auto-confirmation methodology.
  
• Updated nomenclature for trend-following candles for each trade setup. Now referred to as "Color Trend Candles Per Setup".
  
• Fixed trend-following logic to address corner case inconsistencies when Squeeze Filter is applied.
  
• Added option to remove display of divergences lines from the chart while keeping divergences strength labels.
  
• Cleaned up the alerts menu.