Cipher

This indicator identifies potential reversal points through volume exhaustion analysis combined with multi-factor confirmation, volume distribution patterns at price extremes, market state classification based on volatility characteristics, and time-weighted probability calculations. Each component reduces false signals that single-factor indicators typically produce.

METHODOLOGY:
The system continuously monitors market conditions across multiple dimensions. When volume patterns indicate potential exhaustion at significant price levels, it checks for alignment with favorable market conditions and statistical probabilities. Signals only generate when multiple factors confirm, with entry triggered on momentum continuation beyond the exhaustion point.

COMPLETE USAGE GUIDE:

Signal Identification:
- "EXH L+2" = Long exhaustion with 2 confirmations
- "EXH S+3" = Short exhaustion with 3 confirmations
- Higher confirmation numbers indicate stronger setups

Entry Execution:
- Dashed lines mark entry trigger levels
- Entry activates when price breaks trigger within specified bar window
- Buffer setting controls distance from exhaustion bar (ticks)

Position Management:
- Automatic stop loss and target levels display on entry
- Green lines = profit targets
- Red lines = stop loss levels
- Info panel shows real-time position status

CONFIGURABLE PARAMETERS:

Timing Controls:
- Entry Buffer: 0-5 ticks (momentum confirmation distance)
- Max Bars to Wait: 3-10 bars (entry window duration)
- Session Times: Separate London/New York parameters

Sensitivity Settings:
- Volume Multiplier: 1.5-3.0 (vs 20-bar average)
- Lambda Values: Setup frequency expectations per session
- Stop Distances: Session-specific risk parameters

Risk Controls:
- Daily Win Limit: Stops after profitable day
- Daily Loss Limit: Prevents excessive drawdown
- Maximum Daily Trades: Controls overtrading

PERFORMANCE OPTIMIZATION:

Best Trading Windows:
- 10:00 AM EST: Primary reversal window
- 9:30-9:45 AM EST: Opening range exhaustion
- 3:00-4:00 AM EST: European session setups
- 2:30 PM EST: Afternoon reversal potential

Session Characteristics:
- London (2-9 AM EST): Lower frequency, cleaner setups
- New York (9 AM-4 PM EST): Higher frequency, requires filtering
- Background colors indicate active sessions

RISK PARAMETERS:
- Default Stops: 30-40 ticks (session-dependent)
- Risk:Reward Ratios: 1:1.5 to 1:3 (configurable)
- Trade Frequency: 2-4 quality setups weekly

VISUAL REFERENCE:
- Orange Background: London session active
- Blue Background: New York session active
- Yellow Markers: Exhaustion points identified
- Dashed Lines: Pending entry levels
- Solid Lines: Active trade levels
- Info Table: Statistics and system status

IMPORTANT CONSIDERATIONS:
This tool identifies potential setups based on rule-based analysis. Traders should understand that no system guarantees profits and should use appropriate risk management. The indicator works best on 3-minute and 5-minute timeframes in liquid markets. Combine with market context and price action understanding for optimal results.

TECHNICAL REQUIREMENTS:
- Best suited for index and commodites
- Optimized for 3M and 5M
- Requires volume data for proper function
- Best results with consistent market participation