Nasdaq Liquidity Fade Engine (NLFE)

Summary in one paragraph
Nasdaq Liquidity Fade Engine is a daily timeframe strategy for Nasdaq index futures and close proxies such as NQ, MNQ, and NDX. It is designed to act only when a small set of tape, mean location, and trend energy conditions align, and it expresses risk using an ATR sized bracket so the same settings scale across NQ and MNQ. It is original because it can optionally anchor its signal feed to a single continuous Nasdaq tape while executing on related instruments, reducing symbol noise when you want one consistent decision stream. Add it to a clean chart and read entries and exits from the built in strategy markers. Orders confirm on bar close, so markers settle on close.

Scope and intent
• Markets. NQ, MNQ, NDX, and other highly liquid Nasdaq linked instruments
• Timeframes. Primarily daily, other timeframes are supported but not the optimization target
• Default demo used in the publication. CME_MINI:NQ1! on 1D
• Purpose. Provide a compact, auditable daily decision engine for Nasdaq instruments with explicit volatility scaled risk
• Limits. This is a strategy. Orders are simulated by the TradingView engine on standard candles only

Originality and usefulness
This is not a stack of common indicators. It is a minimal asymmetric rule set with a portability layer.
• Unique concept or fusion. Optional tape anchored signal feed plus asymmetric long and short gating plus ATR normalized risk brackets
• What failure mode it addresses. Reduces discretionary over trading by restricting entries to specific tape states and by enforcing a hard stop framework instead of indefinite holds
• Portable yardstick. ATR on the traded symbol is the common unit for stop and target sizing across NQ and MNQ
• Protected scripts. The implementation is protected to reduce low effort cloning and to preserve version integrity, while the method and practical use are disclosed here

Method overview in plain language
The strategy evaluates a small set of state conditions on each bar. It uses a selected signal feed for its tape inputs and applies risk on the traded chart symbol. Long and short are intentionally asymmetric to reflect Nasdaq drift and downside behavior.

Base measures
• Tape state. Candle direction and relative participation measured from the selected signal feed
• Mean location. A rolling mean reference used to define location and fade context
• Trend energy. A trend strength filter used to avoid low quality fades
• Risk unit. ATR of the traded symbol used as a volatility scaled sizing unit for exits

Components
• Tape contraction state. Detects low participation pullback behavior on the signal feed. Used to qualify long opportunity context in a way that is not tied to a fixed point value.
• Mean location state. Uses a rolling mean reference to avoid taking fades in the wrong location regime.
• Trend energy gate. Uses a trend strength threshold to require sufficient directional energy when the short side activates.
• ATR bracket risk. Uses ATR multiples for stop and target distances on the traded symbol, keeping risk scalable across NQ and MNQ.

Fusion rule
The model uses two separate gate sets. Long and short do not share identical prerequisites. The intent is to capture pullback opportunity under contraction while only enabling shorts when location and energy align.

Signal rule
• Long suggestion appears when the tape state indicates a contraction style pullback and the regime filter is satisfied
• Short suggestion appears when the tape state indicates a fadeable push that is location constrained under the mean reference and trend energy is above the threshold
• Long only mode disables opening shorts, while still allowing the short condition to flatten an open long
• Long and short mode allows directional flips when the opposite condition triggers



Inputs with guidance

Setup
• Use NQ as signal source. When enabled, the tape inputs are sourced from the chosen NQ feed so signals can remain consistent across NQ, MNQ, and NDX charts. When disabled, tape inputs come from the chart symbol.
• NQ symbol. The anchor feed used when signal sourcing is enabled.
• Signal timeframe. Blank uses the chart timeframe. For the intended daily workflow, use 1D.

Logic
• EMA length. Typical range 10 to 60. Higher values smooth the mean reference and reduce sensitivity. Lower values increase responsiveness.
• Start year filter. Use to constrain testing to the regime you want to study. Defaults reflect the post 2008 regime focus.

Filters
• ADX length and smoothing. Typical range 10 to 20. Shorter reacts faster and can increase churn.
• ADX minimum. Typical range 15 to 30. Raising it filters shorts and concentrates on higher energy phases.

Risk
• Use ATR stop and target. Enables ATR sized bracket exits.
• ATR length. Typical range 10 to 21 on daily.
• Stop ATR multiple. Typical range 0.3 to 2.5. Raising it gives more room and increases risk per trade.
• Target ATR multiple. Typical range 4 to 30 for more frequent targets. Very large values behave like an expansion capture mode where exits are dominated by the stop or by an opposite regime switch rather than by the target.


Properties visible in this publication
• Initial capital for the example. 100000
• Base currency. USD
• request.security uses lookahead off everywhere
• Strategy only. Default order size method Fixed with value 1 contract. Pyramiding 0. Commission 5 USD per contract. Slippage 5 ticks. Process orders on close On. Bar magnifier Off. Recalculate after order is filled Off. Calc on every tick Off.

Realism and responsible publication
• No performance claims. Past results never guarantee future outcomes
• Execution varies by venue, liquidity, and volatility
• Orders process on bar close and fills use TradingView engine assumptions
• Non standard chart types are not supported for strategies

Honest limitations and failure modes
• This is optimized for the daily timeframe. Intraday use can change signal frequency and behavior materially.
• If you enable tape anchoring, volume and candle state come from the selected feed. This can be useful for consistency, but it also means the tape input is not the same as the executed symbol for instruments with different session structures or synthetic volume.
• Very quiet regimes can reduce signal contrast. Consider longer lengths or higher thresholds.
• Gap heavy periods can change stop and target behavior.
• If both stop and target are inside the same bar range, fills follow standard candle assumptions.


Legal
Education and research only. Not investment advice. You are responsible for your decisions. Test on historical data and in simulation before any live use. Use realistic costs.