Algo Targets [Premium]

1 juil. 2023

The Algo Targets indicator includes a suite of tools that attempt to identify market maker liquidity targets in advance.

These levels can be used by traders to determine:

1. future support/resistance
2. entries/exits
3. directional bias
4. potential reversal levels
5. pullback targets

The script uses a proprietary prediction model based on specific candle sequences, historical moves and volatility projections.

These tools have been live tested across a variety of instruments and timeframes, but should be backtested against your preferred ticker for best performance.

Primary Features:

1. Anchors

Anchors are derived from a simple, but powerful, three-candle breakout pattern. We have found that this pattern, when combined with the relative position to previous Anchor patterns on the chart, gives us clues to predicting future price structure.

Common use case: The simplest way to trade Anchors is to know that price *almost always* makes a return visit. This can be a useful tool for reversal traders. Additionally, Anchors often occur just before strong directional momentum. This can be useful for trend traders looking for entry signals.

Power User feature: Projected Ranges can be enabled in Settings. Each Anchor provides a Retracement leg (measured as the midpoint between the last two Anchors) and an Expansion leg (measured as twice the size of the Retracement leg, projected in the opposite direction). If Projected Ranges are enabled, the directional bias is also highlighted within the range, making it easy to spot at a glance.

Caveats: Expansion legs require patience and solid risk management. Additionally, the Expansion leg contains an additional Trigger level which price MUST cross before we consider the Expansion leg to be "in play" as a valid price target. This Trigger is marked on each Expansion legs as a dotted line.

Please note, Anchors require a 3 candle lookback before they are printed to the chart.




2. Target Zones

Target Zones are an advanced feature, and can be enabled in the Settings panel.

Each Target Zone consists of three levels:

Trigger — This the level closest to the current price. We expect it to act as a support/resistance level until price breaks through.

Target — This is the level farthest from the price. This is how far price is likely to move AFTER crossing the Trigger.

Midpoint — This is the level between the Trigger and Target. If price enters a Target Zone and wicks off of the Midpoint line, it’s usually a reversal signal. In this case we would cut our trade, consider the Target “filled” and potentially enter a reversal trade.

Common use case: When prices crosses a Trigger into a Target Zone, we consider that Target level to be “unlocked.” Our expectation is that price will gravitate toward the Target.

Power User feature: There are many strategies that a trader can build around Target Zones. One of our favorites is to use Targets strictly as reversal entries. On ranging days, price will often wick off of a Target level, before making a quick move in the opposite direction.

Caveats: After a Target is unlocked, it may be reached within the next few bars, or it may be saved by the market algorithms for later. Keep an eye on the Midpoint for potential reversals, and as always, proper risk management is key.

IMPORTANT: The presence of a Target Zone on the chart is neither bullish not bearish by itself. We consider the Target to be in play if, AND ONLY IF, price has crossed the Trigger level.




3. Pullback Levels

Pullback Levels are algorithmically detected return levels. They usually act as a strong draw on price, and often appear just before a pullback in price.



Common use case: The simplest way to use Pullbacks is to look for ones that have not been filled, either from a previous day or in after-hours/pre-market. We use them for confirmation bias along with Anchors and unlocked Targets.

Power User feature: For day trading, we set Alerts on our favorite tickers for any detected Pullbacks on the 5 min chart. This usually gives us plenty of time to review the chart for a possible day trade entry.





Settings:
All features are customizable, including color, line length and visibility. This lets you keep your chart as clean as you like, while only displaying additional data when it is needed.

Alerts:
Alerts can be set for all features, with the ability to set bearish and bullish alerts separately, depending on your trading preference. It is recommended to use "Once Per Bar Close" when you create an alert.