YinYangAlgorithms

SFX Signals & Overlays [YinYangAlgorithms]

SFX Signals & Overlays aims to help traders Identify Buy & Sell locations, Reversals, Volatility Zones, Support & Resistance and Overbought & Oversold Zones. All of these may work in harmony with each other by helping to identify when to enter and exit a trade; as well as helping to determine the risk / reward the trade may ensue.

SFX Signals & Overlays’s Buy & Sell signals are momentum based, meaning the Initial ‘Buy’ & ‘Sell’ signal may not be exactly where you want to get in/out. What may occur is the initial signal appears, a few more continuation signals appear afterwards (always in a chain); and once the momentum has ended a ‘Reversal’ signal appears. The reversal is there to help signify that the ‘opportune’ time to buy/sell may have passed and the price may now correct in the opposite direction. This Indicator aims to Buy Low and Sell High; and therefore the Buy signal momentum may occur as the price is either about to fall, currently falling or has started to consolidate. When the Buy signal momentum has ended, this means the momentum is at an impasse, but is favoring Buy momentum and a reversal (correction) may occur.

Buying & Selling at reversal signals may be profitable, however it may be less risky to DCA into your long / short positions during the Buy/Sell momentum signals instead. Let's get into the Tutorial so you can better understand how our SFX Signals & Overlays indicator works.

Tutorial:


Our example above showcases how our SFX Signals & Overlays Indicator looks on the default settings ‘Medium’ for each of our Algorithm Settings:

  • Trend Sensitivity
  • Signal Sensitivity
  • Zone Sensitivity

All of our Algorithm Settings feature 3 different speeds:

  1. Fast
  2. Medium
  3. Slow

These speeds may be applied to each Algorithm Setting individually and affect how quickly they adapt to the current market's momentum. This allows you to tailor this Indicator to fit your trading style by adjusting it to meet your needs accordingly. If you are someone who likes to swing trade on the 1-5 minute timeframe, you may find better confluence with all settings on ‘Fast’. Medium term holders and traders may find better results with all settings on ‘Medium’. Likewise, long term investors may find best results with all settings on ‘Slow’. However, this shouldn’t stop you from finding your own best result by adjusting them individually to meet your own unique trading style.


SFX Signals & Overlays helps you identify shifts in momentum by displaying Momentum Signals. Momentum Signals are shown by either a Green or Red Triangle. Momentum Signals can continue for quite some time until the momentum has ended. We rank the first Momentum Signal from 1/5 to 5/5 for their strength and may help determine the chances of the momentum shift occurring. Once the Momentum Signals have ended we display a Reversal Signal. This Reversal Signal helps signify that the Momentum has ended. When the Momentum ends it means that a reversal may have started. This reversal may mean the price will continue in the direction the signal mentioned; or it may mean the price will consolidate. If the price consolidates then the signal is void as when the consolidation ends the price could go in either direction. If you notice consolidation occurring after a Reversal Signal; wait for more confirmations as it is now too risky.


Our Indicator displays different evaluations for each INITIAL Buy and Sell signal. These evaluations rank the current start of the signal from 1-5; 1 being the lowest and least reliable, 5 being the highest and most reliable. These rankings aren’t indefinite and are simply an evaluation at the time of the initial signal. We may potentially provide evaluations at the reversal later on if requested enough. When a Buy or Sell signal occurs this defines where momentum is occurring in this direction. This momentum is indicated by momentum signals shown through red / green triangles. These triangles indicate that this momentum is present. When these momentum signals end is when the Reversal Signal appears indicating that since this momentum has ended, there may be a decent chance of a reversal occurring. There also adherently may be the potential of consolidation occurring; but generally it means there is either a reversal, or consolidation + then a reversal or a continuation; however it may be apparent that the momentum has ended.

ES:
NQ:
BTC:

If you refer to the 3 examples above, we show how the ES, NQ and BTC look within a 5 minute scalping example. Essentially you’d make your decision on the Buy / Sell signal, the momentum signals, the Reversal Signals, the Trend Colors as well as other oscillators and Due Diligence.

Remember, there’s no such thing as a perfect entry / exit, the more you understand about trading and do your own Due Diligence the better. These Buy and Sell as well as Reversal signals attempt to locate and rank momentum shifts to help you identify where the momentum may be ending and reversing in the opposite direction.


Our zones defined by the Outer (red) and Inner (green) are representations of not only Support and Resistance locations, but likewise Overbought and Oversold locations. These zones help in multiple ways. The hard lines that define each zone's start / end are very useful locations of support / resistance which may indicate where the price will bounce off of. Likewise, when the price is within these zones it represents the price being Overbought or Oversold. Then the price is for instance within the Red Resistance Zone, what generally may happen is the price will correct quickly to get back to the ‘Black Empty Zone’ between the Red and Green zones; OR it may consolidate sideways until it has entered the ‘Black Empty Zone’. This is how the price may redeem itself back to being valued correctly. These zones help you identify and understand, in concatenation with our signals when and how much the price may move.


Our Settings are minimalistic so you don’t need to worry and get overwhelmed about changing values and trying to fiddle to find which values works the best for what. Our Algorithms will take care of all of that for you. Simply select the speeds for your Trend, Signals and Zones and you’re good to start trading! You can likewise customize what information is visible to you and the colors to better customize your experience.

Fast:
Medium:
Slow:

The 3 examples above display what the same portion of the chart looks like when Trend, Signal and Zone Sensitivity is changed from Fast, Medium and Slow.

As you can see, they all look quite different in the results they produce. By default all settings are set to Medium, however they can all be individually changed to suit your trading style and needs.


Our Indicator offers many different alert options which may help you stay informed with how the market is moving and any momentum changes that may occur.

Settings:

1. Algorithm Settings
  • Trend Sensitivity (Fast, Medium, Slow): Trend Sensitivity refers to how quickly the Trend Bar Colors change. Fast: will change colors very quickly if it senses momentum is changing. Medium: will change almost as quickly as Fast, however, rather than swapping from Bullish to Bearish momentum right away it has an intermediate 'Neutral - Slightly Bullish (Yellow)' and 'Neutral - Slightly Bearish (Orange)'. This way you can better visualize when the momentum is dying in the trend and starting back up by having these trend 'Neutral/Consolidation' areas. Slow: will attempt to only change Trend Bar Colors when the momentum has surely shifted. This may result in a bit of lagging behind.
  • Signal Sensitivity (Fast, Medium, Slow): Signal Sensitivity refers to how quickly the Buy & Sell Momentum Signals & Reversal Signals appear. These signals are meant to appear when it thinks the price may reverse, but the speeds refer to how much of a reversal they think may happen. Fast: will attempt to locate any and all momentum swings. Medium: will attempt to only locate momentum swings which may drive the price up considerably. Slow: will attempt to locate only the most extreme momentum swings. This may result in some potentially good ones missed however; but the ones it finds may have a higher probability of occuring.
  • Zone Sensitivity (Fast, Medium, Slow): Zone Sensitivity refers to how quickly the Zones expand based on price movement. These zones may be useful for not only seeing Support & Resistance; but also identifying when it is Overbought & Oversold; as well as visualizing volatility between the Black (Empty area) and the zones. The lines that separate each zone are the Support and Resistance locations; the area within the zones are simply the spacing between these Support and Resistance locations. However, the further the price is to the outer zones does represent Overbought and Oversold. Fast: will expand very quickly. This causes the price to be within the Black (Empty area) more often. This may be useful for finding extremities in price movement which may have a better chance of correcting. Medium: moves fast but not anywhere close to as fast as 'Fast'. Medium will hold its values in an attempt to be as accurate as possible for identifying Support and Resistance locations. Slow: will expand very slowly. This may be useful for identifying Support & Resistance as well as Volatility targets on higher time frames since these zones move much slower.

2. Display Settings:
  • Show Trend Bar Colors: Trend Bar Color are a way of seeing how the Trend is holding up on a bar by bar basis. This may be useful for seeing momentum starting, ending or simply dying down before any signals actually appear.
  • Signal Text Display (Both, Buy & Sell, Reversals, None: Signals are a way of seeing potential changes in momentum and when they have actually occurred. Our signals also rank from 1/5 to 5/5 how strong of a chance this momentum change may occur (only at the time of the signal, not at the time of the reversal). These may be useful as potential Entry and Exit locations; as well as when you see the reversal, you know that this momentum change has either begun or a consolidation may be occurring. If a consolidation occurs, the signal is no longer valid as the price can now go either way and it is best to wait for more signals or other technical analysis to determine momentum and movement.
  • Zone Display (All, Outer + Middle, Inner + Middle, Outer, Middle, Inner, None): Zones are composed of 3 areas above and below. These areas attempt to project Support & Resistance locations as well as display when the Price is Overbought and Oversold. You can specify which zones you wish to view, however all are important.

3. Color Settings:
  • Buy Color: This is the color of all Buy Signals and Zones.
  • Sell Color: This is the color of all Sell Signals and Zones.
  • Buy Reversal Color: This is the color of all Buy Signal Reversals.
  • Sell Reversal Color: This is the color of all Sell Signal Reversals.

If you have any questions, comments, ideas or concerns please don't hesitate to contact us.

HAPPY TRADING!
Release Notes:
Added the ability to select the Signal Location within the Settings.

Signal Location will allow you to select if you want the Buy & Sell Signals + Ratings to occur on either the First Momentum Signal or the Last Momentum Signal (Reversal Signal).

By doing this you can tweak it to your trading style.

For instance, if you are a cautious trader who doesn't like to go 'All-In' you can DCA from the first Momentum Signal until the Reversal.

However, maybe you only like to do one position; and want to get in / out when the momentum may have changed, this type of trader would likely want the Buy & Sell Signals + Rating to be on the Last Momentum Signal.

By default in the Settings we have now switched it so it uses the Last Momentum Signal instead of the First for Buy & Sell Signals + Ratings.

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