VWAP Retest + EMA9 Cross + Candle Pattern V2

The VWAP Retest + EMA9 Cross + Candle Pattern V2 indicator is a comprehensive intraday momentum tool designed to identify high-probability long entries by combining volume-weighted average price (VWAP) proximity, exponential moving average (EMA) crossovers, and price action confirmation. It specifically filters for setups occurring during high-liquidity sessions where price exhibits strong relative strength against the previous day's high.

Usage

The script is primarily used as an intraday long-only strategy for the US morning session (9:30 AM – 12:30 PM EST). A valid entry is signaled when the following three-pillar confluence occurs:

• Trend & Momentum Alignment: The 9-period EMA crosses above the VWAP within a 3-bar window, indicating a shift in short-term momentum toward the volume-weighted mean.
• Value Retest: The price must be within a specified buffer zone of the VWAP, ensuring the entry is not overextended and is utilizing VWAP as dynamic support.
• Price Action Confirmation: The tool scans for specific candle patterns to confirm buyer intervention. These include Hammers (H), Bullish Engulfing (BE), or Momentum candles (M) characterized by large body sizes relative to the recent average.

For a signal to trigger, the price must also be trading above the previous day's high, ensuring the asset is in a state of relative strength.

Details

The script incorporates several filters to refine entry quality. The "VWAP Retest" ensures that traders are entering near the volume-weighted average rather than chasing breakouts. By requiring the EMA9 crossover to happen recently, the strategy captures the early stages of a momentum shift.

The strategy includes built-in risk management, calculating a stop loss at 0.5% below the VWAP at the time of entry and a fixed take profit target. A forced exit is programmed for 1:00 PM EST to avoid the typical midday chop and late-session volatility.

Settings

• EMA Length: Determines the period for the short-term Exponential Moving Average (Default is 9).
• Take Profit %: Sets the target profit percentage relative to the entry price.
• VWAP Retest Buffer ($): Defines the price range around the VWAP value that constitutes a "retest" zone.

FAQ

How do I use the VWAP Retest + EMA9 Cross + Candle Pattern V2?

The indicator is best used on intraday timeframes (like 1m, 5m, or 15m) during the US market open. Look for the "SETUP" label which appears when all trend, value, and price action criteria are met simultaneously.

What do the "H", "BE", and "M" labels mean?

These are price action markers: "H" stands for Hammer, "BE" for Bullish Engulfing, and "M" for a Momentum candle. These provide visual confirmation of the candle pattern requirement within the strategy logic.

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.