TMO Trade Trigger System v1.2

The TMO Trade Trigger System indicator provides a momentum-based framework that combines the True Momentum Oscillator (TMO) and TTM Squeeze concepts to identify trade entries, exits, and add-on opportunities. It is designed to filter market noise by requiring a two-stage confirmation process: momentum exhaustion followed by a trend reversal.

Usage

The Usage section describes how the script can be used, with logic divided into "Arming" and "Triggering" phases to ensure trades are only executed after a confirmed shift in momentum.

Entry and Exit Logic

The system monitors the TMO signal line relative to user-defined thresholds.

• Long Entry: When the signal line crosses below the Entry Arming Level (default -55), the setup is "ARMED." A "BUY NEXT OPEN" signal is generated only when the TMO ribbon subsequently turns green.
• Long Exit: When the signal line crosses above the Exit Arming Level (default +55), the exit is "ARMED." A "SELL NEXT OPEN" signal triggers once the ribbon turns red.

Add-on Positions

If a long position is already active and the TMO signal line dips back below the Entry Arming Level without the exit condition being met, the system arms an "ADD" signal. This allows for identifying dip-buying opportunities within an established trend.

Timeframe Considerations

While optimized for the Weekly (1W) timeframe, the indicator can be applied to lower timeframes like the 4H. Users should adjust thresholds accordingly (e.g., -73/+73 for 4H) to account for increased volatility and different momentum characteristics.

Details

The script utilizes a state machine to track whether the market is currently flat, armed for entry, in a long position, or armed for exit. This prevents premature signals and ensures the "two-stage" logic is strictly followed.

The core calculation is based on the TMO, which counts the number of times the close is higher or lower than the open over a lookback period, smoothed via double EMA. Additionally, the tool incorporates TTM Squeeze logic, using Bollinger Bands and Keltner Channels to identify periods of volatility compression (Squeeze On) and expansion (Squeeze Release).

Settings

TMO Settings

• TMO Length: Sets the lookback period for the main oscillator calculation.
• TMO Calc Length: Determines the first EMA smoothing period.
• TMO Smooth Length: Determines the second EMA smoothing period for the final lines.
• TTM Squeeze Length: Adjusts the period used for the volatility squeeze calculation.

Strategy Settings

• Entry Arming Level: The threshold the signal line must cross below to arm a buy/add signal.
• Exit Arming Level: The threshold the signal line must cross above to arm a sell signal.
• Ribbon Confirmation Mode: Chooses between "Ribbon Flip" (triggering exactly when colors change) or "Ribbon State" (triggering if the color is already correct).
• Confirm Only On Bar Close: When enabled, signals only trigger once the candle is finalized.

Visuals

• Show TMO Lines/Ribbon: Toggles the visibility of the oscillator components in the pane.
• Show TTM Squeeze Dots: Enables the volatility compression dots on the zero line.
• Show Armed Markers: Toggles "ARMED" text labels on the price chart.
• Show Trigger Markers: Toggles "BUY/SELL/ADD" labels on the price chart.

FAQ

How do I adjust the indicator for higher volatility pairs? You should increase the Entry and Exit Arming Levels (e.g., moving from 55 to 70 or higher) to ensure the momentum is truly exhausted before the system arms a trade.

What is the difference between "ARMED" and "BUY"? "ARMED" indicates that price has reached an extreme oversold or overbought level, but the trend has not yet reversed. "BUY" or "SELL" signals occur only after the TMO ribbon confirms a change in direction.

How can I access this tool? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.