PROTECTED SOURCE SCRIPT
NQ Rule Matrix
# NQ Rule Matrix – Indicator User Guide
## Purpose (Read This First)
This indicator is **not** a signal generator and it is **not** predictive.
Its only job is to **classify the market environment in real time** so you stop forcing trades in conditions where NQ statistically punishes discretion.
If you use this to justify trades you already want to take, you will lose money faster — not slower.
---
## What the Indicator Does
The indicator continuously evaluates **intermarket + internal conditions** and assigns the market to a **Rule Matrix State**.
It answers one question only:
> *Is NQ in a condition where continuation is favored, rotation is occurring, or risk should be reduced/avoided?*
---
## The Core Inputs (Non‑Negotiable)
The matrix is built on **confirmation, not price alone**.
It monitors:
* **NQ price behavior** (structure, acceptance, rejection)
* **QQQ trend state** (above / below key levels)
* **US 10Y yields (US10Y)** direction
* **DXY (US Dollar Index)** behavior
* **SMH (Semiconductors)** as tech leadership proxy
If you ignore any of these, you are breaking the system.
---
## Matrix States & How to Use Them
### 🟢 GREEN — Trend Continuation Environment
**Definition:**
* QQQ: Above key levels
* US10Y: Falling or stable
* DXY: Weak or neutral
* SMH: Leading / confirming
* NQ: Holding structure
**What This Means:**
* Institutions are aligned
* Continuation is statistically favored
**Rules:**
* Normal size only
* Trade with structure
* No countertrend trades
---
### 🟡 YELLOW — Transition / Rotation Risk
**Definition:**
* Mixed confirmations
* One or more intermarket inputs diverging
* Price still holding, but **conditions degrading**
**What This Means:**
* Rotation may be starting
* Follow‑through probability drops
**Rules:**
* Reduce size or stand down
* No aggressive continuation trades
* Expect chop, failed breakouts, fake strength
---
### 🔴 RED — Risk‑Off / Breakdown Environment
**Definition:**
* QQQ: Below key levels
* US10Y: Rising
* DXY: Strengthening
* SMH: Weak / breaking
* NQ: Losing structure
**What This Means:**
* Liquidity is leaving tech
* Downside volatility expands
**Rules:**
* No long bias
* Only defensive participation if at all
* Survival > opportunity
---
### ⚠️ FAKE STRENGTH — Trap Condition
**Definition:**
* NQ pushing up
* Intermarket confirmation missing or opposite
* Volume weak or late
**What This Means:**
* Retail‑driven moves
* High failure rate
**Rules:**
* Do not chase
* Treat strength as suspect
---
### 🚨 EMERGENCY — Capital Protection Mode
**Definition:**
* Sharp intermarket deterioration
* Volatility expansion
* Multiple inputs flip simultaneously
**What This Means:**
* Market is repricing risk
**Rules:**
* Flat is a position
* Preservation mode only
---
## How to Use the Indicator (Step‑by‑Step)
1. **Check the Matrix State first** — before price
2. Accept the classification **without debate**
3. Only execute strategies allowed in that state
4. If the state changes, **your behavior changes immediately**
No exceptions.
---
## What This Indicator Is NOT
* ❌ A buy/sell system
* ❌ A timing tool
* ❌ A replacement for execution skill
It is a **filter**. Filters make money by keeping you out of bad trades.
---
## The Only Metric That Matters
Not win rate.
Not P&L.
**Obedience to the matrix.**
If you follow it perfectly and still lose, the system can be improved.
If you don’t follow it, nothing can help you.
---
## Final Warning
If you find yourself:
* Looking for exceptions
* Asking “what if”
* Adding extra indicators
You are reverting to emotional trading.
The matrix exists to stop that.
## Purpose (Read This First)
This indicator is **not** a signal generator and it is **not** predictive.
Its only job is to **classify the market environment in real time** so you stop forcing trades in conditions where NQ statistically punishes discretion.
If you use this to justify trades you already want to take, you will lose money faster — not slower.
---
## What the Indicator Does
The indicator continuously evaluates **intermarket + internal conditions** and assigns the market to a **Rule Matrix State**.
It answers one question only:
> *Is NQ in a condition where continuation is favored, rotation is occurring, or risk should be reduced/avoided?*
---
## The Core Inputs (Non‑Negotiable)
The matrix is built on **confirmation, not price alone**.
It monitors:
* **NQ price behavior** (structure, acceptance, rejection)
* **QQQ trend state** (above / below key levels)
* **US 10Y yields (US10Y)** direction
* **DXY (US Dollar Index)** behavior
* **SMH (Semiconductors)** as tech leadership proxy
If you ignore any of these, you are breaking the system.
---
## Matrix States & How to Use Them
### 🟢 GREEN — Trend Continuation Environment
**Definition:**
* QQQ: Above key levels
* US10Y: Falling or stable
* DXY: Weak or neutral
* SMH: Leading / confirming
* NQ: Holding structure
**What This Means:**
* Institutions are aligned
* Continuation is statistically favored
**Rules:**
* Normal size only
* Trade with structure
* No countertrend trades
---
### 🟡 YELLOW — Transition / Rotation Risk
**Definition:**
* Mixed confirmations
* One or more intermarket inputs diverging
* Price still holding, but **conditions degrading**
**What This Means:**
* Rotation may be starting
* Follow‑through probability drops
**Rules:**
* Reduce size or stand down
* No aggressive continuation trades
* Expect chop, failed breakouts, fake strength
---
### 🔴 RED — Risk‑Off / Breakdown Environment
**Definition:**
* QQQ: Below key levels
* US10Y: Rising
* DXY: Strengthening
* SMH: Weak / breaking
* NQ: Losing structure
**What This Means:**
* Liquidity is leaving tech
* Downside volatility expands
**Rules:**
* No long bias
* Only defensive participation if at all
* Survival > opportunity
---
### ⚠️ FAKE STRENGTH — Trap Condition
**Definition:**
* NQ pushing up
* Intermarket confirmation missing or opposite
* Volume weak or late
**What This Means:**
* Retail‑driven moves
* High failure rate
**Rules:**
* Do not chase
* Treat strength as suspect
---
### 🚨 EMERGENCY — Capital Protection Mode
**Definition:**
* Sharp intermarket deterioration
* Volatility expansion
* Multiple inputs flip simultaneously
**What This Means:**
* Market is repricing risk
**Rules:**
* Flat is a position
* Preservation mode only
---
## How to Use the Indicator (Step‑by‑Step)
1. **Check the Matrix State first** — before price
2. Accept the classification **without debate**
3. Only execute strategies allowed in that state
4. If the state changes, **your behavior changes immediately**
No exceptions.
---
## What This Indicator Is NOT
* ❌ A buy/sell system
* ❌ A timing tool
* ❌ A replacement for execution skill
It is a **filter**. Filters make money by keeping you out of bad trades.
---
## The Only Metric That Matters
Not win rate.
Not P&L.
**Obedience to the matrix.**
If you follow it perfectly and still lose, the system can be improved.
If you don’t follow it, nothing can help you.
---
## Final Warning
If you find yourself:
* Looking for exceptions
* Asking “what if”
* Adding extra indicators
You are reverting to emotional trading.
The matrix exists to stop that.
Protected script
This script is published as closed-source. However, you can use it freely and without any limitations – learn more here.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Protected script
This script is published as closed-source. However, you can use it freely and without any limitations – learn more here.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.