Inside Candle with EMA +ST +TP/SL@Saheemol

The Inside Candle with EMA +ST +TP/SL@Saheemol indicator identifies high-probability breakout opportunities by combining the Inside Candle price action pattern with EMA trend analysis and SuperTrend confirmation.

Usage

The indicator is used to detect consolidation periods followed by directional breakouts. When a valid Mother-Daughter candle formation is detected, the script marks the range and monitors for a breakout. A signal is generated when price closes outside the Mother Candle's range, provided the breakout direction aligns with the current SuperTrend (bullish for buys, bearish for sells).

Upon a valid breakout, the tool automatically plots trade management boxes including an entry zone, two take-profit levels (TP1, TP2), and a stop-loss (SL) level based on the Mother Candle's range and user-defined risk-reward ratios. The EMAs (9, 21, 200) serve as additional trend filters and dynamic support or resistance areas.

Details

The script utilizes a specific "Mother-Daughter" logic to filter for quality setups:

• Mother Candle: Must meet a minimum body-to-candle-range ratio to ensure it represents a significant move rather than a doji.
• Daughter Candle (Inside Candle): Must be fully contained within the Mother Candle's high and low. It also includes a maximum body-ratio filter to prioritize narrow-range consolidation.
• Breakout Confirmation: The script requires a bar close beyond the Mother Candle's extremes. To prevent false signals, the SuperTrend must be in agreement with the breakout direction.
• Trade Projections: Stop losses are placed at the opposite end of the Mother Candle. Profit targets are then calculated using the distance of the Mother Candle range multiplied by the Risk-Reward (RR) inputs.

Settings

EMA Settings

• EMA 9/21/200 Length: Determines the period for the short, medium, and long-term Exponential Moving Averages used to visualize market structure.

SuperTrend Settings

• SuperTrend ATR Period: The lookback period used for the Average True Range calculation within the SuperTrend.
• SuperTrend Factor: The multiplier applied to the ATR to determine the distance of the SuperTrend line from the price.

Pattern Settings

• Mother Candle Body Ratio (%): The minimum percentage of the Mother Candle's total range that must be comprised of the candle body.
• Daughter Candle Body Ratio Maximum (%): The maximum percentage of the Daughter Candle's total range allowed for its body to be considered valid consolidation.
• Mother Line Length: The number of bars the Mother Candle's high and low lines extend forward on the chart.

Trade Settings

• TP1/TP2 RR: Sets the risk-reward ratio for the first and second take-profit targets relative to the Mother Candle range.
• Box Length: Controls how many bars into the future the trade management boxes (SL/TP) are projected.

Style Settings

• EMA Colors: Customizable colors for the 9, 21, and 200 EMAs.
• Highlight/Box Colors: Aesthetic settings for Daughter candle highlighting and the various trade zone boxes (Entry, TP1, TP2, SL).

FAQ

How do I interpret the trade boxes? The red box indicates the Stop Loss zone, the blue/neutral box indicates the Entry price, and the green boxes represent the Take Profit 1 and Take Profit 2 targets calculated from the breakout point.

Why did an Inside Candle appear without a Buy/Sell signal? A signal only triggers if the price closes outside the Mother Candle range and the SuperTrend direction matches the breakout. If the SuperTrend is bearish during an upside breakout, the signal is filtered out.

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