Hosoda’s CloudsMany investors aim to develop trading systems with a high win rate, mistakenly associating it with substantial profits. In reality, high returns are typically achieved through greater exposure to market trends, which inevitably lowers the win rate due to increased risk and more volatile conditions.
The system I present, called “Hosoda’s Clouds” in honor of Goichi Hosoda , the creator of the Ichimoku Kinko Hyo indicator, is likely one of the first profitable systems many traders will encounter. Designed to capture trends, it performs best in markets with clear directional movements and is less suitable for range-bound markets like Forex, which often exhibit lateral price action.
This system is not recommended for low timeframes, such as minute charts, due to the random and emotionally driven nature of price movements in those periods. For a deeper exploration of this topic, I recommend reading my article “Timeframe is Everything”, which discusses the critical importance of selecting the appropriate timeframe.
I suggest testing and applying the “Hosoda’s Clouds” strategy on assets with a strong trending nature and a proven track record of performance. Ideal markets include Tesla (1-hour, 4-hour, and daily), BTC/USDT (daily), SPY (daily), and XAU/USD (daily), as these have consistently shown clear directional trends over time.
Commissions and Configuration
Commissions can be adjusted in the system’s settings to suit individual needs. For evaluating the effectiveness of “Hosoda’s Clouds,” I’ve used a standard commission of $1 per order as a baseline, though this can be modified in the code to accommodate different brokers or preferences.
The margin per trade is set to $1,000 by default, but users are encouraged to experiment with different margin settings in the configuration to match their trading style.
Rules of the “Hosoda’s Clouds” System (Bullish Strategy)
This strategy is designed to capture trending movements in bullish markets using the Ichimoku Kinko Hyo indicator. The rules are as follows:
Long Entry: A long position is triggered when the Tenkan-sen crosses above the Kijun-sen below the Ichimoku cloud, identifying potential reversals or bounces in a bearish context.
Stop Loss (SL): Placed at the low of the candle 12 bars prior to the entry candle. This setting has proven optimal in my tests, but it can be adjusted in the code based on risk tolerance.
Take Profit (TP): The position is closed when the Tenkan-sen crosses below the bottom of the Ichimoku cloud (the minimum of Senkou Span A and Senkou Span B).
Notes on the Code
margin_long=0: Ideal for strategies requiring a fixed position size, particularly useful for manual entries or testing with a constant capital allocation.
margin_long=100: Recommended for high-frequency systems where positions are closed quickly, simulating gradual growth based on realized profits and reflecting real-world broker constraints.
System Performance
The following performance metrics account for $1 per order commissions and were tested on the specified assets and timeframes:
Tesla (H1)
Trades: 148
Win Rate: 29.05%
Period: Jan 2, 2014 – Jan 6, 2020 (+172%)
Simple Annual Growth Rate: +34.3%
Trades: 130
Win Rate: 30.77%
Period: Jan 2, 2020 – Sep 24, 2025 (+858.90%)
Simple Annual Growth Rate: +150.7%
Tesla (H4)
Trades: 102
Win Rate: 32.35%
Period: Jun 29, 2010 – Sep 24, 2025 (+11,356.36%)
Simple Annual Growth Rate: +758.5%
Tesla (Daily)
Trades: 56
Win Rate: 35.71%
Period: Jun 29, 2010 – Sep 24, 2025 (+3,166.64%)
Simple Annual Growth Rate: +211.5%
BTC/USDT (Daily)
Trades: 44
Win Rate: 31.82%
Period: Sep 30, 2017 – Sep 24, 2025 (+2,592.23%)
Simple Annual Growth Rate: +324.8%
SPY (Daily)
Trades: 81
Win Rate: 37.04%
Period: Jan 23, 1993 – Sep 24, 2025 (+476.90%)
Simple Annual Growth Rate: +14.3%
XAU/USD (Daily)
Trades: 216
Win Rate: 32.87%
Period: Jan 6, 1833 – Sep 24, 2025 (+5,241.73%)
Simple Annual Growth Rate: +27.1%
SPX (Daily)
Trades: 217
Win Rate: 38.25%
Period: Feb 1, 1871 – Sep 24, 2025 (+16,791.02%)
Simple Annual Growth Rate: +108.1%
Conclusion
With the “ Hosoda’s Clouds ” strategy, I aim to showcase the potential of technical analysis to generate consistent profits in trending markets, challenging recent doubts about its effectiveness. My goal is for this system to serve as both a practical tool for traders and a source of inspiration for the trading community I deeply respect. I hope it encourages the creation of new strategies, fosters creativity in technical analysis, and empowers traders to approach the markets with confidence and discipline.
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FractalReversalStrategyFiltered(ETH 5min) The profit that is shown in the strategy report uses a capital of 240 USD with 10x leverage. Only use this strategy in ETHUSD (5 MIN timeframe).
FractalReversalStrategyFiltered(SOL 5min) - ZERO FALSE TRADEThe profit that is shown in the strategy report uses a capital of 240 USD with 10x leverage. Only use this strategy in SOLUSD (5 MIN timeframe).
AI - Gaussian Channel Strategy AI – Gaussian Channel Strategy is a long-only swing trading strategy designed for Bitcoin and other assets on daily charts. It combines an adaptive Gaussian Channel with Supertrend and Stochastic RSI filters to identify potential bullish breakouts or pullback entries. The channel defines trend direction and volatility, while the Stochastic RSI provides momentum confirmation. Positions are opened only when the price closes above the channel’s upper band under favorable momentum conditions, and are closed when the price crosses back below the band.
This script is intended for educational and research purposes. Parameters such as poles, period length, ATR factor, and RSI settings can be adjusted to fit different markets and timeframes.
Disclaimer: This script does not guarantee profits and should not be considered financial advice. Past performance is not indicative of future results. Trading involves risk, and you are solely responsible for your own decisions and outcomes.
TrendIsYourFriend Strategy (SPY,IWM,VYM,XLK,SPXL,BTC,GOLD,VT...)Personal disclaimer
Don’t trust this strategy. Don’t trust any other model either just because of its author or a backtest curve. Overfitting is an easy trap, and beginners often fall into it. This script isn’t meant to impress you. It’s meant to survive reality. If it does, maybe it will raise questions and you’ll remember it.
Legal disclaimer
Educational purposes only. Not financial advice. Past performance is not indicative of future results.
Strategy description
Long-only, trend-based logic with two entry types (trend continuation or excess-move reversion), dynamic stop-losses, and a VIX filter to avoid turbulent markets.
Minimal number of parameters with enough trades to support robustness.
For backtest, each trade is sized at $10,000 flat (no compounding, to focus on raw model quality and the regularity of its results over time).
Fees = $0 (neutral choice, as brokers differ).
Slippage = $0, deliberate choice: most entries occur on higher timeframes, and some assets start their history on charts at very low prices, which would otherwise distort results.
What makes this script original
Beyond a classical trend calculation, both excess-move entries and dynamic stop-loss exits also rely on trend logic. Except for the VIX filter, everything comes from trend functions, with very few parameters.
Pre-configurations are fixed in the code, allowing sincere performance tracking across a dozen cases over the medium to long term.
Allowed
SPY (ARCA) — 2-hour chart: S&P 500 ETF, most liquid equity benchmark
IWM (ARCA) — Daily chart: Russell 2000 ETF, US small caps
VYM (ARCA) — Daily chart: Vanguard High Dividend Yield ETF
XLK (ARCA) — Daily chart: Technology Select Sector SPDR
SPXL (ARCA) — Daily chart: 3× leveraged S&P 500 ETF
BTCUSD (COINBASE) — 4-hour chart: Bitcoin vs USD
GOLD (TVC) — Daily chart: Gold spot price
VT (ARCA) — Daily chart: Vanguard Total World Stock ETF
PG (NYSE) — Daily chart: Procter & Gamble Co.
CQQQ (ARCA) — Daily chart: Invesco China Technology ETF
EWC (ARCA) — Daily chart: iShares MSCI Canada ETF
EWJ (ARCA) — Daily chart: iShares MSCI Japan ETF
How to use and form an opinion on it
Works only on the pairs above.
Feel free to modify the input parameters (slippage, fees, order size, margins, …) to see how the model behaves under your own conditions
Compare it with a simple Buy & Hold (requires an order size of 100% equity).
You may also want to look at its time-in-market — the share of time your capital is actually at risk.
Finally, let me INSIST on this : let it run live for months before forming an opinion!
Share your thoughts in the comments 🚀 if you’d like to discuss its live performance.
💎🔺⚫ Diamond-Triangle-Circle StrategyUpgrade the high low low high strat to cut out signal noise and flat markets dont take the black circles they eat profits
NQ Trading Strategy by Kaok TradesThe Kaok Trades NQ Scalping Strategy is designed for traders who want to capture high-probability intraday moves on Nasdaq Futures with minimal screen time. This strategy combines momentum confirmation with volatility-based stop placement, helping traders manage risk and maximize reward.
Long-only Swing/Scalp (anchored exits + TP harness) Traders PostThis is the Traders Post friendly drag and drop version of the swing/ scalp strategy for the algo traders out there. Let me know your thoughts, constructive criticism is always welcome.
Long‑only Swing/ScalpThis is a basic scalper stategy for algos or crypto bots, tested on BNB, not the best backtest but you can tweak and get better results. Take profit at 1% and Sl at 2% , adjust those settings first to see different back test resutls.
AVGO Advanced Day Trading Strategy📈 Overview
The AVGO Advanced Day Trading Strategy is a comprehensive, multi-timeframe trading system designed for active day traders seeking consistent performance with robust risk management. Originally optimized for AVGO (Broadcom), this strategy adapts well to other liquid stocks and can be customized for various trading styles.
🎯 Key Features
Multiple Entry Methods
EMA Crossover: Classic trend-following signals using fast (9) and medium (16) EMAs
MACD + RSI Confluence: Momentum-based entries combining MACD crossovers with RSI positioning
Price Momentum: Consecutive price action patterns with EMA and RSI confirmation
Hybrid System: Advanced multi-trigger approach combining all methodologies
Advanced Technical Arsenal
When enabled, the strategy analyzes 8+ additional indicators for confluence:
Volume Price Trend (VPT): Measures volume-weighted price momentum
On-Balance Volume (OBV): Tracks cumulative volume flow
Accumulation/Distribution Line: Identifies institutional money flow
Williams %R: Momentum oscillator for entry timing
Rate of Change Suite: Multi-timeframe momentum analysis (5, 14, 18 periods)
Commodity Channel Index (CCI): Cyclical turning points
Average Directional Index (ADX): Trend strength measurement
Parabolic SAR: Dynamic support/resistance levels
🛡️ Risk Management System
Position Sizing
Risk-based position sizing (default 1% per trade)
Maximum position limits (default 25% of equity)
Daily loss limits with automatic position closure
Multiple Profit Targets
Target 1: 1.5% gain (50% position exit)
Target 2: 2.5% gain (30% position exit)
Target 3: 3.6% gain (20% position exit)
Configurable exit percentages and target levels
Stop Loss Protection
ATR-based or percentage-based stop losses
Optional trailing stops
Dynamic stop adjustment based on market volatility
📊 Technical Specifications
Primary Indicators
EMAs: 9 (Fast), 16 (Medium), 50 (Long)
VWAP: Volume-weighted average price filter
RSI: 6-period momentum oscillator
MACD: 8/13/5 configuration for faster signals
Volume Confirmation
Volume filter requiring 1.6x average volume
19-period volume moving average baseline
Optional volume confirmation bypass
Market Structure Analysis
Bollinger Bands (20-period, 2.0 multiplier)
Squeeze detection for breakout opportunities
Fractal and pivot point analysis
⏰ Trading Hours & Filters
Time Management
Configurable trading hours (default: 9:30 AM - 3:30 PM EST)
Weekend and holiday filtering
Session-based trade management
Market Condition Filters
Trend alignment requirements
VWAP positioning filters
Volatility-based entry conditions
📱 Visual Features
Information Dashboard
Real-time display of:
Current entry method and signals
Bullish/bearish signal counts
RSI and MACD status
Trend direction and strength
Position status and P&L
Volume and time filter status
Chart Visualization
EMA plots with customizable colors
Entry signal markers
Target and stop level lines
Background color coding for trends
Optional Bollinger Bands and SAR display
🔔 Alert System
Entry Alerts
Customizable alerts for long and short entries
Method-specific alert messages
Signal confluence notifications
Advanced Alerts
Strong confluence threshold alerts
Custom alert messages with signal counts
Risk management alerts
⚙️ Customization Options
Strategy Parameters
Enable/disable long or short trades
Adjustable risk parameters
Multiple entry method selection
Advanced indicator on/off toggle
Visual Customization
Color schemes for all indicators
Dashboard position and size options
Show/hide various chart elements
Background color preferences
📋 Default Settings
Initial Capital: $100,000
Commission: 0.1%
Default Position Size: 10% of equity
Risk Per Trade: 1.0%
RSI Length: 6 periods
MACD: 8/13/5 configuration
Stop Loss: 1.1% or ATR-based
🎯 Best Use Cases
Day Trading: Designed for intraday opportunities
Swing Trading: Adaptable for longer-term positions
Momentum Trading: Excellent for trending markets
Risk-Conscious Trading: Built-in risk management protocols
⚠️ Important Notes
Paper Trading Recommended: Test thoroughly before live trading
Market Conditions: Performance varies with market volatility
Customization: Adjust parameters based on your risk tolerance
Educational Purpose: Use as a learning tool and customize for your needs
🏆 Performance Features
Detailed performance metrics
Trade-by-trade analysis capability
Customizable risk/reward ratios
Comprehensive backtesting support
This strategy is for educational purposes. Past performance does not guarantee future results. Always practice proper risk management and consider your financial situation before trading.
Alpha SignalsThis strategy is designed to highlight potential short-term market setups using a fast and slow EMA crossover system on a 5-minute chart. It provides visual signals directly on the chart to help traders observe trend changes and potential entry points.
Key Features:
EMA Crossover Entries – The strategy enters long trades when the fast EMA crosses above the slow EMA and short trades when the fast EMA crosses below the slow EMA.
Time-Based Exits – Trades are automatically closed after a configurable number of bars to manage exposure.
Visual Alerts – Buy and sell signals are displayed as labels directly on the chart for easy interpretation.
Configurable Settings – Users can adjust fast and slow EMA lengths as well as the exit bar count to suit their trading preferences.
Usage:
Suitable for short-term traders focusing on the NQ1 futures contract or other instruments with similar volatility.
Can be used for observation, back testing, or as a confirmation tool alongside other strategies.
Does not guarantee profitability; intended for educational purposes and strategy testing only.
Lead Levels TP/SL v1.3 (close-only entries)Lead Levels — close-only signals, clean execution
Notice: Designed for BTC 15-minute charts only.
What it shows
Four reliability tiers: L1, L2, L3, L4.
A black “DON’T BET” marker for extreme conditions you should skip.
All triangles print only on bar close to avoid repaint.
How to read
▲ BUY L1–L4: higher level → stronger confidence.
▼ SELL L1–L4: higher level → stronger confidence.
DON’T BET (black): stand aside. No trade.
How to trade it
When a triangle prints, run a 1:1 target/stop:
Long: TP +1%, SL −1%.
Short: TP −1%, SL +1%.
Focus on normal conditions. Skip when the black marker appears.
One entry per signal. Keep sizing consistent.
Why traders like it
Close-only printing keeps charts honest.
Simple 1:1 playbook. No guesswork.
Scalping Strategy: FVG + Engulfing
This is a scalping strategy based on the Fair Value Gap (FVG) and Engulfing pattern confirmation. It identifies the high and low of the first 5-minute candle after the 9:30 AM EST market open and waits for a breakout supported by a Fair Value Gap. A trade is only triggered after a retest of the FVG zone followed by an engulfing candle in the direction of the breakout. Trades are entered with a fixed 3:1 risk-to-reward ratio and limited to 2 entries per trading day to avoid overtrading. Ideal for NASDAQ scalping on a 1-minute chart.
Low Volume Breakouts [Engr. Havery]Manipulation Happens in high volume candles, so when a Low Volume Breakout happens with the high volume candles. so we enter after the manipulation, breakout then retest
🚀 ETH Price LinesThis Pine Script strategy ("🚀 ETH Price Lines") does:
Trend detection with short & long SMAs
Noise reduction using Kalman filters
Signal confirmation from ADX (trend strength) + volume
Entry/exit:
Buy when short-term crosses above long-term
Sell when it crosses below
Risk management: optional stop-loss (default 3%)
Visuals: plots SMAs, Kalman lines, buy/sell markers, and triggers alerts
Composite PR Signal (Trend↔Revert + ADX gate)Core Components
1. Dynamic Inputs
Max/PR windows (maxLen, prWin) – define historical lookbacks for oscillators and percentile ranks.
Smoothing (smooth) – applies an EMA filter to stabilize composite scores.
Threshold (th) – governs entry sensitivity.
Holding period (hBars) – maximum bars allowed in a trade.
Execution options – allow shorting, fast approximations for PR and CCI.
2. Custom Utility Functions
The script implements optimized versions of common TA operations:
Rolling sums, delays, and moving averages (EMA, RMA, SMA).
Lazy rolling extrema (efficient highest/lowest lookups).
Stateful arrays for tracking oscillator values across bars.
Fast approximations for percentile ranks and indicators.
3. Indicators Used
The system calculates a broad set of oscillators, including:
Trend/Momentum: ROC, TRIX, TSI, MACD histogram, OBV ROC, AO, CMF, BOP, UO, ADX.
Reversion/Oscillators: RSI, Stochastic K/D, MFI, Williams %R, CCI, CMO.
Each is converted into a percentile rank (PR) to normalize values between 0–100.
4. Composite Scoring
Two composite signals are built:
Trend Score – averages normalized outputs of momentum indicators.
Reversion Score – averages normalized outputs of oscillators prone to mean reversion.
ADX Gate – when ADX PR is high, the strategy favors trend score; when low, it favors reversion score.
Final score is smoothed and compared against entry thresholds.
5. Trade Logic
Entry:
Long: When composite score crosses above +th.
Short: When composite score crosses below -th (if enabled).
Exit:
Opposite crossover signal.
Or trade duration exceeds hBars.
6. Risk/Execution Parameters
Initial capital: 100,000
Commission: 0.01% per trade
Fixed order size: 100 units
No pyramiding
Intended Use
This script is designed for:
Swing trading across multiple assets (equities, forex, crypto).
Adapting to market regimes — capturing breakouts during strong trends, but fading moves when markets are choppy.
TradeMastersAlgoOur strategy is a long only algorithm that has produced repeatable positive results in both back testing and live testing. The code is our proprietary IP. Users may have a 30 free trial to experiment with our strategy.
Results are not guaranteed.
This strategy was created for automated day trading a fully funded margin account. Please exercise caution and discipline when using any strategy. We've had the most positive results with heavy diversification (40 tickers trading 5% equity each).
Ticker selection, timeframe, and chart type ( we use standard candles ) are up to the user.
We encourage you to keep your own method to your self to prevent the dilution of your strategy.
Supertrend 3H Strategy VinaySupertrend 3H Strategy Vinay-
Buy or sell using Supertrend, 200 points SL and 400 points target
Parthiban Stock Market Buy V2 - Buy onlyFor BUY, condition
continuos 3 down candle
then forms Indecision candle
next candle close above Indecision candle
price above 500 EMA
For sell, condition
continuos 3 up candle
then forms Indecision candle
next candle close below Indecision candle
price below 500 EMA
Parthiban - Stock Market BuyParthiban - Stock Market Buy
For BUY, condition
continuos 3 down candle
then forms Indecision candle
next candle close above Indecision candle
price above 500 EMA
For sell, condition
continuos 3 up candle
then forms Indecision candle
next candle close below Indecision candle
price below 500 EMA
Median + Tendência + ATR (Yehuda Nahmias)📊 Median + Trend + ATR (By Yehuda Nahmias)
🚀 The indicator that combines Simplicity, Accuracy, and Risk Management
This script brings together three key pillars of professional trading:
✅ Dynamic Median → captures price midpoints and highlights reversal and breakout zones.
✅ Trend Filter (EMA) → ensures signals are aligned with the main market direction.
✅ Smart ADX + ATR → confirm trend strength and automatically calculate Stop Loss and Take Profit based on volatility.
🔔 How it works:
Buy/Sell Arrows: automatically appear when price crosses the median under valid trend and strength conditions (ADX).
Automatic Stops and Targets: SL and TP levels are plotted using ATR, ready for effective risk management.
3 Signal Modes:
🛡️ Conservative → fewer trades, stronger filtering.
⚖️ Standard → balance between frequency and accuracy.
⚡ Aggressive → more trades, captures shorter moves.
💡 Key Benefits:
Clear visuals: colored candles + BUY/SELL arrows.
Built-in risk management: position size is calculated based on % of equity.
Flexible: works on any asset (Forex, Crypto, Indices, Stocks).
🔑 Private access only.
If you’d like to use this strategy on your charts, contact me via my TradingView profile.
👉 Turn your analysis into objective signals and gain more confidence in your entries and exits!
NQ Scalping System (1-Min Optimized) — StrategyNQ Scalping System — What this does (in plain English)
You’re buying pullbacks in an uptrend and selling pullbacks in a downtrend.
Trend = EMA89. Entries lean on EMA8/EMA21 touches + a StochRSI reset & cross so you’re not chasing candles. Optional Volume and MACD filters keep you out of weak moves. A time window avoids dead markets and the first noisy minute.
Long setup
Price above EMA89 (trend up)
Price pulls back to EMA8 (or EMA21 if fallback is on) by at least your Min Pullback (NQ points)
StochRSI resets to oversold and %K crosses up %D
(Optional) Volume thrust and MACD momentum confirm
Within your session window
Short = mirror image.
Exits you control
Stop/Target: ATR-based (adaptive) or fixed scalp points
Trailing stop: only arms after price moves your way by X points, then trails by your offset
Early exit options: StochRSI fade, EMA break, trend break, or opposite divergence
Quick scalp: grab a few points or bail after X bars if nothing happens
Reality check
This is a rules → orders system. It will not match eyeballed indicator labels. Fills, gaps, and trail behavior are real. That’s the point.
How I’d run it (defaults that won’t waste your time)
Use ATR stops/targets by default
EMA21 fallback = ON (you’ll miss fewer good pullbacks)
MACD filter = ON when choppy; OFF when trends are clean
Volume multiplier: start modest, bump it up if you get chopped
Session: keep RTH (e.g., 09:30–15:45 ET) and skip the first minute
Quick presets for higher timeframes
Use these as starting points and then nudge to taste.
5-Minute (intraday swings)
OB/OS: 80 / 20
Volume Multiplier: 1.3
MACD: 8 / 21 / 5
ATR Stop× / Target×: 1.8–2.2 / 2.5–3.0
Min Pullback: 1.0–1.5 pts
Quick Scalp: 6–10 pts, Bars: 12–20
Trailing: Activation 6–8 pts, Offset 3–4 pts
Divergence: Hidden ON, MTF OFF
15-Minute (session legs)
OB/OS: 85 / 15
Volume Multiplier: 1.4
MACD: 8 / 21 / 5
ATR Stop× / Target×: 2.0–2.5 / 3.0–4.0
Min Pullback: 1.5–2.5 pts
Quick Scalp: 12–18 pts, Bars: 16–30
Trailing: Activation 10–14 pts, Offset 5–6 pts
Divergence: Hidden ON, MTF ON (LTF = 5m)
30-Minute (bigger intraday trends)
OB/OS: 88 / 12
Volume Multiplier: 1.5
MACD: 12 / 26 / 9 (or 8 / 21 / 5 if you want faster)
ATR Stop× / Target×: 2.2–2.8 / 3.5–5.0
Min Pullback: 2.5–4.0 pts
Quick Scalp: 18–28 pts, Bars: 20–40
Trailing: Activation 16–24 pts, Offset 6–8 pts
Divergence: Hidden ON, MTF ON (LTF = 5m or 15m)
1-Hour (multi-hour swings)
OB/OS: 90 / 10
Volume Multiplier: 1.6–1.8
MACD: 12 / 26 / 9
ATR Stop× / Target×: 2.5–3.5 / 4.0–6.0
Min Pullback: 4–7 pts
Quick Scalp: 30–50 pts, Bars: 24–60
Trailing: Activation 28–40 pts, Offset 10–15 pts
Divergence: Hidden ON, MTF ON (LTF = 15m)
Tuning tips (read this)
Getting chopped? Raise Min Pullback, raise Volume Multiplier, leave MACD ON, and narrow your session.
Missing moves? Turn EMA21 fallback ON, lower Volume Multiplier, relax OB/OS (e.g., 75/25 on 5m).
Flat days? Use Quick Scalp and a tighter Trail Activation to lock gains.
Liquidity SweeperStrategy Overview
This Pine Script implements a Liquidity Sweep Trading Strategy, a sophisticated approach that capitalizes on market manipulation tactics commonly used by institutional traders. The strategy identifies when price "sweeps" above recent swing highs or below swing lows to trigger stop losses and grab liquidity, then quickly reverses direction - creating high-probability trading opportunities.
Core Concept: What is a Liquidity Sweep?
A liquidity sweep occurs when:
Price breaks above a swing high (or below a swing low) to trigger retail stop losses
Institutional players absorb this liquidity at favorable prices
Price quickly reverses back into the previous range
This creates a "fake breakout" or "stop hunt" pattern
The strategy exploits these manipulative moves by entering trades in the direction of the reversal.
How the Strategy Works
1. Swing Point Detection
Uses a lookback period (default: 20 bars) to identify significant swing highs and lows
Employs proper pivot point detection using ta.highestbars() and ta.lowestbars()
Only considers confirmed swing points (not just recent highs/lows)
2. Liquidity Sweep Identification
High Sweep (Short Setup):
Price moves above the last swing high (triggering buy stops)
Same bar closes back below the swing high (showing rejection)
Low Sweep (Long Setup):
Price moves below the last swing low (triggering sell stops)
Same bar closes back above the swing low (showing support)
3. Confirmation Process
Requires price to stay within the swept range for a specified number of bars (default: 3)
This confirms the sweep was genuine and not just normal volatility
Prevents false signals and improves trade quality
4. Entry Logic
Long Entries: Triggered after confirmed low sweeps
Short Entries: Triggered after confirmed high sweeps
5. Risk Management
Stop Loss: Placed at a multiple of ATR (default: 1.5x) from entry price
Take Profit: Risk/Reward ratio based (default: 2:1)
Position Sizing: 10% of equity per trade (configurable)
Red X-crosses: High sweeps detected
Green X-crosses: Low sweeps detected
Red triangles (down): Short entry signals
Green triangles (up): Long entry signals
Horizontal lines: Current swing high/low levels
Info label: Shows last detected swing levels
Optimal Conditions:
Timeframes: 1H, 4H, and Daily work best
Market Conditions: Ranging and trending markets both suitable
Volatility: Moderate to high volatility preferred
Session Times: Most effective during active trading sessions
Strengths:
✅ Exploits institutional manipulation tactics
✅ Clear entry/exit rules with defined risk
✅ Works across multiple asset classes
✅ Includes proper confirmation to reduce false signals
✅ Visual clarity for manual verification
✅ Reasonable risk/reward parameters
Limitations:
⚠️ Requires patience - not a high-frequency strategy
⚠️ Market dependent - fewer signals in low volatility periods
⚠️ Needs sufficient lookback data for swing identification
⚠️ May have drawdown periods during strong trending moves
⚠️ Requires understanding of market structure concepts
Best Practices for Users
Optimization Tips:
Adjust lookback period based on timeframe (shorter for lower TFs)
Test different confirmation periods for your market
Consider market session times when backtesting
Use alongside volume analysis for additional confirmation
Risk Management:
Never risk more than 2-3% per trade of total capital
Consider reducing position size during high-impact news
Monitor correlation if trading multiple pairs simultaneously
Use additional filters (trend, support/resistance) for confluence
Backtesting Recommendations:
Test on at least 6 months of historical data
Include different market conditions (trending, ranging, volatile)
Consider transaction costs and slippage in results
Forward test on demo before live implementation
Expected Results
Based on typical liquidity sweep strategy performance:
Disclaimer
This strategy is based on market structure analysis and institutional trading behavior patterns. Past performance doesn't guarantee future results. Users should:
Thoroughly backtest before live trading
Start with small position sizes
Understand the underlying concepts before implementation
Consider combining with other analysis methods
Always use proper risk management
The strategy works best when traders understand the psychological and structural elements of liquidity sweeps rather than just following signals blindly.