Quantum Ribbon Lite

📊 WHAT IS IT?

Quantum Ribbon Lite is a trend trading indicator built on a 5-layer exponential moving average ribbon system. It analyzes price momentum, volume, and ribbon alignment to generate entry signals with pre-calculated stop loss and take profit levels.
The indicator is designed for traders who want a straightforward approach to trend trading without managing complex configurations.


🔧 HOW IT WORKS

The Ribbon System

The indicator uses 5 pairs of EMAs (10 moving averages total) that create colored "clouds" on your chart:
Blue/Teal ribbons indicate bullish alignment
Red/Pink ribbons indicate bearish alignment
Mixed colors indicate neutral or transitional periods
The ribbon spacing automatically adjusts from a fast EMA (21) to a slow EMA (60), creating layers that show trend strength and direction.

Signal Generation
Signals appear when multiple conditions align:
For LONG signals:

1. Fast EMAs are above slow EMAs
   
2. Price momentum is positive and strong (> 0.5 ATR)
   
3. Volume is above average (> 1.1x average)
   
4. Ribbon confirms bullish state
   
5. Minimum confidence threshold met (filters weak setups)
   

For SHORT signals:

1. Fast EMAs are below slow EMAs
   
2. Price momentum is negative and strong
   
3. Volume is above average
   
4. Ribbon confirms bearish state
   
5. Minimum confidence threshold met
   

📈 VISUAL COMPONENTS

Entry Signals

Green "BUY" label = Long entry signal at candle close
Red "SELL" label = Short entry signal at candle close
Signals only trigger on confirmed candle closes (no repainting).

Risk Management Lines

Three lines appear when you have an active position:
White dotted line = Entry price
Red dotted line = Stop loss level
Green dotted line = Take profit target

Performance Dashboard

The stats table shows:
Current position status (In Long/Short or Waiting for signal)
Entry, stop, and target prices when in a trade
Win/loss record
Win rate percentage with color coding


⚙️ SETTINGS

1. Signal Sensitivity (1-10)
Controls the minimum time between signals (cooldown period):
1 = 2 bars between signals (most frequent)
5 = 10 bars between signals (balanced)
10 = 20 bars between signals (most selective)
Lower values generate more signals, higher values filter for better setups.

2. Stop Loss Distance
Determines how stops are calculated using ATR (Average True Range):
Tight = 1.5x ATR from entry
Normal = 2.0x ATR from entry
Wide = 2.5x ATR from entry
ATR adapts to market volatility, so stops are tighter in calm markets and wider in volatile markets.

3. Take Profit Target
Sets your risk-to-reward ratio:
1.5R = Target is 1.5 times your risk
2R = Target is 2 times your risk
3R = Target is 3 times your risk
Example: With a $100 stop distance and 2R setting, your take profit will be $200 away from entry.

4. Show Stats Table
Toggle to show/hide the performance dashboard in the top-right corner.

5. Show Risk Lines
Toggle to show/hide the entry/stop/target lines on the chart.


📋 HOW TO USE

Step 1: Apply to Chart
Add the indicator to your preferred instrument and timeframe (daily recommended).
Step 2: Wait for Signal
A BUY or SELL label will appear on the chart when conditions align.
Step 3: Enter Position
Enter at the close of the signal candle in the indicated direction.
Step 4: Set Risk Parameters Use the displayed lines:

• Red line = Your stop loss
  
• Green line = Your take profit
  

Step 5: Hold Position
Wait for the position to hit either the stop or target. No new signals will appear while you're in a position.
Step 6: Review Results
Check the stats table to track your win rate and adjust settings if needed.


🎯 RISK MANAGEMENT

Stop Loss Calculation
Stops are based on ATR (Average True Range) which measures recent price volatility:

• In quiet markets: Stops are placed closer to entry
  
• In volatile markets: Stops are placed further away
  

This adaptive approach helps prevent stop-hunting while maintaining appropriate risk levels.

Take Profit Calculation
Targets are calculated as a multiple of your stop distance:

• If stop is 50 points away and you use 2R, target is 100 points away
  
• Maintains consistent risk-reward ratios across all trades
  

Required Win Rates To break even after fees:

• 1.5R requires ~40% win rate
  
• 2R requires ~34% win rate
  
• 3R requires ~25% win rate
  

📊 RECOMMENDED USAGE

Timeframes:

• Daily charts show strongest performance in testing
  
• 4H and 1H timeframes work but may have lower win rates
  
• Lower timeframes generate more signals but reduced quality
  

Markets:

• Works on all instruments: Stocks, Forex, Crypto, Futures, Indices
  
• Best suited for trending markets
  
• May generate false signals in tight ranges or choppy conditions