Madrimov Ribbon Pullback

The Madrimov Ribbon Pullback indicator identifies trend-continuation entries by combining the Madrid Moving Average Ribbon with internal market structure confirmation.

Usage

The Usage section describes how the script can be used to identify high-probability entries in trending markets. The indicator filters for clean trends and requires specific alignment before generating signals.

Trend Identification and Filtering

The script utilizes the Madrid Ribbon (MA75–MA90) to determine trend health. A "Clean Ribbon" status is required for a signal, meaning the ribbon must exhibit a specific slope and band separation. If the ribbon is flat or compressed, the market is considered range-bound, and signals are suppressed. An automatic Higher Timeframe (HTF) filter further ensures that entries align with the broader market direction.

Entry Conditions

To generate a BUY or SELL signal, the indicator follows a three-step validation process:

1. Established Trend: The Madrid Ribbon must show a clear bullish or bearish slope.
2. Price Pullback: Price must physically enter the ribbon zone, indicating a mean reversion.
3. Structure Confirmation: Once price is within the ribbon, the indicator looks for an internal market structure break (CHoCH or BOS). A signal fires only when price breaks structure in the direction of the trend while recovering from the ribbon.

Risk Management

Upon a valid signal, the tool can project ATR-based Take Profit (TP1, TP2) and Stop Loss (SL) levels. These visual aids help in setting risk-to-reward parameters dynamically based on current market volatility.

Details

The indicator calculates a series of Moving Averages (75, 80, 85, 90) to form the Madrid Ribbon. It employs a "Clean Ribbon" logic by comparing the ribbon's slope and the distance between the lead and trail MAs against an ATR-based threshold.

Internal structure is tracked using local pivots. A Change of Character (CHoCH) represents the first sign of a trend shift within the pullback, while a Break of Structure (BOS) represents a continuation of the local corrective trend. The auto HTF bias logic automatically selects a higher interval based on the current chart timeframe (e.g., a 15m chart will reference a 4H bias) to ensure confluence.

Settings

Ribbon Settings

• Exponential MA: Toggles between Exponential (EMA) and Simple (SMA) moving averages for the ribbon.
• Show Ribbon: Toggles the visibility of the Madrid Ribbon.
• Slope Lookback (bars): Sets the number of bars used to calculate the ribbon's angle.
• Slope Sensitivity: Adjusts the minimum required slope for a ribbon to be considered "Clean."
• Separation Sensitivity: Adjusts the minimum distance required between the ribbon bands.

Structure Settings

• Show Internal Structure (CHoCH / BOS): Displays internal market structure breaks on the chart.
• Label Size: Adjusts the size of the structure break labels.

Entry Settings

• Wait for candle confirmation (close): If enabled, signals only trigger after the confirming candle has closed.
• Show Buy / Sell signals: Toggles the entry labels.
• Show TP / SL levels: Toggles the visualization of target and exit price lines.
• TP/SL Line Length (bars): Determines how far the TP/SL lines extend to the right.

Risk Management

• ATR Length: The lookback period for the Average True Range calculation used for targets.
• TP1/TP2 ATR Multiplier: Sets the distance for take-profit levels based on ATR.
• SL ATR Multiplier: Sets the distance for the stop-loss level based on ATR.

FAQ

How do I interpret the "Clean" vs "Weak" ribbon status? A clean ribbon indicates a strong, trending market with sufficient momentum and separation, which is the ideal environment for the pullback strategy. A weak or neutral ribbon suggests consolidation where pullback signals are less reliable.

On which timeframes does this indicator work best? While applicable to various markets, the logic is optimized for the 15m, 30m, and 1H timeframes, particularly for crypto perpetual contracts and trending instruments.

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