Jedi Momentum & Reversal Scalp IndicatorQuick Breakdown:
This scalping strategy was designed to take advantage of price movements throughout the regular trading session in NQ futures on the 1min chart. I developed this to help hunt for trend setups and reversals. This strategy or indicator is applicable to any high liquidity market, and works best on the 1min or 2min charts. 3min and 5min chart will give fewer signals.
Markets are unpredictable and the NQ can be especially volatile. Recognizing that a market is in a state of chop or extreme volatility is important as a trader. This script will give false signals when the market is in a state of chop or extreme volatility. Avoid opens that do not have a clear directional move. Avoid low volume or slower periods of the regular trading session. Due to low volume and usually a tighter range, this script will most likely not work well during the overnight session. However, if patient, this indicator can help you find 1-3 A+ Setups during the RTH session.
This indicator uses the 9, 20, and 50 simple moving averages. (custom SMA's)
I take into consideration other indicators and key levels, then look for confluence with this strategy when hunting for setups.
Long and Shorts are inverted for this strategy.
Conditions and Considerations:
- Setup Signal 1: 9 crosses 20. This is an early warning signal that momentum or sentiment in the market could be changing and starting to move in the direction of the cross. During consolidation or high volatility, Setup 1 will give false signals. A strong Setup Signal 1, usually happens after a period of consolidation.
- Setup Signal 2: 9 crosses 50. This is the main signal that a long or short setup has begun. The background will change color to highlight a long or short setup and you will only see long Enter signals if the Setup is long. Setup 2 gives less false signals.
- Entry Signal 1: 20 crosses 50. You won't be able to enter at the cross level, but if the momentum is healthy, then entering with the next candle could be a good entry level. However, sometimes price moves in the direction of the Setup before the cross, so you may want to enter just before if structure is favorable. Furthermore, you may want to have a stop that goes just outside of the 9/50 cross, since immediately pulling back to that level would not be healthy for the setup.
**Note: Conditions for Entry Signals 2-4; are when price has pulled away from the moving averages and they are in order above or below price, then as price pulls back to the 9, 20, and 50 a long signal is created when the low of a candle gets close (custom buffers) to one of the moving averages. A short signal is created when the high of a candle gets close to one of the moving averages.
- Entry Signal 2: Pullback to 9 (custom buffer). Early in a healthy setup the first pullback is usually the smallest and can happen quickly and also more than once.
- Entry Signal 3: Pullback to 20 (custom buffer). Midway into or later in a setup price will pullback towards the 20. This is sometimes an early exhaustion sign. Pullbacks to the 20 are usually fewer than pullbacks to the 9. Sometimes the 9 and 20 begin to entwine before continuation. If this happens take note of the angle on the 50, if there is still a decent angle supporting the direction of the setup, then the setup is still valid.
- Entry Signal 4: Pullback to 50 (custom buffer). This is sometimes an exhaustion signal and should be traded with caution and a tight stop. If the 50 is broken early in a Setup, then the momentum is not strong in the direction of the Setup, and you should avoid that trade. If later in the Setup the 50 is broken in a flush, but only by a few points, then wait and see if price rebounds in direction of Setup. If later in the Setup the 50 is broken by more than 25pts, then the Setup is not valid anymore.
- Exit Signal: 9 cross the 50. When the 9 crosses the 50 in the opposite direction as the previous Setup, then that Setup is over.
*Note: Context Matters! High volatility and chop can give false signals. Don’t trade every Setup. Market should make a clear opening drive and/or breakout of a key level or consolidation zone. Don’t try to use Entry signals in the middle of a consolidation zone, a day of high volatility, or during a news release (CPI, NFP, FOMC, etc.). Confluence with other indicators (like CDV candles pullback to CDV moving averages the same as price pullbacks to an Entry Signal, or RSI divergence after price made an exhaustion move off an Entry Signal, etc.) and key levels (like previous day’s OHLC, POC, VAH, VAL, etc.)
Momentum:
- 45* angle on moving averages can help identify strong momentum
- RSI/MACD should be in confluent zones as Setup (if long RSI should be above zero)
- Pullbacks always require patience=identify failure levels (15m/30m candle high/lows, OHLC, POC, VAH, VAL, etc.)
- RSI hidden divergence=strong momentum
- If strong momentum, then RSI divergence can give false signals
Reversal:
- Don’t try to fade strong momentum. Best to wait until Key Levels are reached.
- 3+ “pushes” with RSI divergence=early reversal signal, but don’t enter before Signal 2
- If Initial Balance is extremely wide, take caution holding onto reversal Setups. Price could snap back as the market revisits key levels
- Remember; a reversal is a pullback, but not all pullbacks are reversals
Risk Management:
- Depending on volatility, I trade with a 1:1 or 2:1 profit:loss bracket. My stops are usually set at 25pts
- I always leave a runner at key levels or outside range
- When main target is hit=all stops move to inside break even
- Typically trail stops behind the 50
- Setups should move quickly=if price stalls and pulls away from break even, exit trade before full stop is hit
ES 1min moving average settings: 16, 34, 75
Rotation
LRS-Strategy: 200-EMA Buffer & Long/Short Signals LRS-Strategy: 200-EMA Buffer & Long/Short Signals
This indicator is designed to help traders implement the Leveraged Return Strategy (LRS) using the 200-day Exponential Moving Average (EMA) as a key trend-following signal. The indicator offers clear long and short signals by analyzing the price movements relative to the 200-day EMA, enhanced by customizable buffer zones for increased precision.
Key Features:
200-Day EMA: The main trend indicator. When the price is above the 200-day EMA, the market is considered in an uptrend, and when it is below, it indicates a downtrend.
Customizable Buffer Zones: Users can define a percentage buffer around the 200-day EMA (default is 3%). The upper and lower buffer zones help filter out noise and prevent premature signals.
Precise Long/Short Signals:
Long Signal: Triggered when the price moves from below the lower buffer zone, crosses the 200-day EMA, and then breaks above the upper buffer zone.
Short Signal: Triggered when the price moves from above the upper buffer zone, crosses the 200-day EMA, and then breaks below the lower buffer zone.
Alternating Signals: Ensures that a new signal (long or short) is only generated after the opposite signal has been triggered, preventing multiple signals of the same type without a reversal.
Clear Visual Aids: The indicator displays the 200-day EMA and buffer zones on the chart, along with buy (long) and sell (short) signals. This makes it easy to track trends and time entries/exits.
How to Use:
Long Entry: Look for the price to move below the lower buffer, cross the 200-day EMA from below, and then break out of the upper buffer to confirm a long signal.
Short Entry: Look for the price to move above the upper buffer, cross below the 200-day EMA, and then break below the lower buffer to confirm a short signal.
This indicator is perfect for traders who prefer a structured, trend-following approach, using clear rules to minimize noise and identify meaningful long or short opportunities.
Market Inner Strength IndexThe "Market Inner Strength Index" is an indicator designed to visually represent the market strength by analyzing the six major sectors: XLK, XLV, XLF, XLY, XLC and XLI. These sectors represent more than 80% of the SPX index, making their performance crucial for understanding overall market conditions. The indicator calculates the individual strengths of these sectors and combines them to provide an overall market strength index, helping to identify scenarios of sector rotation, euphoria, or panic.
Rationale:
The six major sectors (XLK, XLV, XLF, XLY, XLC, XLI) are essential as they encompass a significant portion of the SPX index. Typically, money rotates among these sectors, meaning some sectors grow while others decline. Rare occasions where all sectors move in the same direction can indicate market-wide euphoria (upwards) or panic (downwards). The Market Inner Strength Index helps track sector performance and identify these scenarios.
Methodology:
Script requests current timeframe data for each of the sectors and assigns scores, based on its performance. It will work best on the daily and higher timeframes but can also be used on the lower timeframes.
Score assignment:
If the sector is green (positive performance) for the given timeframe, it receives positive points.
If the sector is red (negative performance), it receives negative points.
If the current close price is above the previous period high, additional positive points are assigned.
If the current close price is below the previous period low, additional negative points are assigned.
The scores for the six sectors are averaged to compute a total score, which is plotted on the chart. A table displays the performance of each sector, color-coded based on their scores for the last period.
Parameters:
Neutral Zone : Define the neutral zone threshold.
Heikin Ashi : Option to use Heikin Ashi candles instead of normal ones.
Show Divergency : Option to show divergences on the chart. Divergence occurs when the SPY is bullish, but the sector score is bearish, or vice versa. This option will only work on SPY chart.
Sector selections : Enable/disable specific sectors in score calculation.
Relative Performance Comparison among different sectorsThis script shows how money is moving among different sectors using relative-strength of the corresponding sector-specific largest ETFs against MSCI World. Trend and current value of Relative-strength can be used to determine the sector in which you should make your investment at this point, considering the movement in markets.
Stock Rotation Model [CC]This is an original indicator so a true hidden gem in my opinion. I based this idea off of the work by Giorgos Siligardos (Stocks and Commodities Aug 2012) with his indicator called the Sector Rotation Model. This indicator is best used as a trend confirmation in combination with another indicator such as a leading indicator. This will show you how strong the current stock you are looking at is compared to the S&P 500 which almost everyone uses as a relative strength comparison. Feel free to change the default lengths if you would like as these were just the settings that I liked the best overall. Let me know if you find any good combos that works for most stocks in general. I have included strong buy and sell signals in addition to normal ones so strong signals are darker in color and normal signals are lighter in color. Buy when the line turns green and sell when it turns red.
Let me know if there are any other indicators or scripts you would like to see me publish!
