Much level trading comes down to one shape: a line matters, price breaks it, and the trade is taken around that break. This detector is that shape.
What it does
It keeps a list of the lines price has been respecting on one candle series. It watches for a candle to close past one of them. You then choose where the entry goes, from three options:
- Resting at the line, from the break. An order waits at the line from the moment it breaks, and fills if price comes back to it. This needs a limit entry block beside the detector, which decides how long the order waits.
- When a candle closes back at the line. Price comes back, a candle closes on the break side, and the entry is taken at that close. It always fills, but some distance from the line.
- On the candle that breaks the line. No wait at all.
Whichever you pick, the protective stop goes just beyond the line, not beyond the entry candle. The target is the next line in front of the trade.
The first two are different trades. An order resting at the line only fills if price comes back. A close-confirmed entry always fills, further from the line, so its stop is wider and its target nearer.
Which lines it watches
Choose any mix of six:
- Swing levels: flat lines that two or more confirmed swing points agree on. A swing point is a candle that stands above (or below) the candles on both sides of it.
- Previous day: yesterday's high and low.
- Session range: today's high and low so far.
- Liquidity lines: prices that price has come back to again and again.
- Double-top necklines: the shelf between the two peaks of a double top or bottom.
- Trend lines: a sloped line through two confirmed swing points of the same kind.
A day is the futures trading day, 5pm to 4pm Chicago time, so on a Monday the previous day is Friday's. Its high and low are ready from the new day's first candle.
A line only exists once it could really have been drawn. A swing point needs candles on both sides before it counts, so its line appears at the candle that confirms it, never at the candle that made it. Yesterday's high only exists once yesterday is over.
The minimum reward
Before it takes a trade, the detector measures the distance from the entry to the next line in front. It compares that with the stop. If the ratio is below the least reward:risk worth taking you set, there is no trade, unless you have also set a fallback multiple.
A break with another line ten ticks in front of it is still a break, but it has little room to run.
Settings that need a word
- Clear the line by (ticks): how far past the line a candle must close before the line counts as broken.
- Stop sits beyond the line by (ticks): this sets the whole risk of the trade, and the position size follows from it.
- Pivots join one line within (ticks): how far apart two swing points can be and still count as one line. This decides how many lines exist, and so how many setups a day you see.
These are in ticks. A three-minute gold candle is several times taller than a three-minute S&P candle, so the same number of ticks means something different on each market.
You choose every number
You choose which lines matter, how far the stop goes, and what reward is worth taking.
What can go wrong
One surprise is too few setups. A tight clustering setting makes few lines, and a high minimum reward skips most breaks. The Everything else tab of Activity gives the reason each time.
A line is retired once it has produced a trade, unless you choose to let it be broken again. If you want one level to be able to give several trades in a day, that is the setting to change.