Three EMA Scalp Signals

The Three EMA Scalp Signals indicator is a specialized scalping tool designed to identify high-probability entry points by detecting candle deviations and subsequent returns to a primary moving average trend.

Usage

The script is primarily intended for lower timeframes (specifically the 5-minute chart) and should be used in alignment with a higher timeframe "Anchor" trend (such as a 60-minute chart).

A valid setup occurs when:

1. Five consecutive candles break away from the Fast EMA (default 8) without touching it.
2. A "trigger" candle subsequently crosses back over the Fast EMA but remains above/below the Medium EMA (default 13) depending on the trend direction.
3. The indicator then calculates an entry level based on the highs or lows of the previous setup candles.

Signals are generated as follows:

• Buy/Sell Triangles: Appear when the price crosses the calculated entry level.
• Flags: Indicate a "Win" where the price reached the target level.
• X-Crosses: Indicate a "Loss" where the price hit the stop level.

Details

The script utilizes three Exponential Moving Averages (EMA) to define a trending environment: Fast, Medium, and Slow. The logic requires a specific "breakaway" phase followed by a mean-reversion "trigger" candle to confirm momentum before suggesting an entry. Entry levels are calculated using the candle bodies (high/low) rather than wicks to filter out noise. Profit targets and stop losses are dynamically calculated using the Average True Range (ATR) to adapt to current market volatility.

Settings

• Slow EMA: Period for the slow moving average (default 21).
• Medium EMA: Period for the medium moving average (default 13).
• Fast EMA: Period for the fast moving average (default 8).
• ATR Periods for risk: The lookback period used to calculate volatility for exits.
• Stop size (ATR Multiplier): Determines the distance of the stop loss from the entry based on ATR.
• Limit size (ATR Multiplier): Determines the distance of the take profit from the entry based on ATR.

FAQ

How do I interpret the colored bars?

Bars that change color to blue or fuchsia indicate that a setup condition (the 5-candle break and trigger) has been met, signaling that an entry level has been established.

Can I use this on any timeframe?

While it can be applied to any timeframe, it was specifically designed for 5-minute scalping with a 60-minute anchor chart for trend confirmation.

How can I access Three EMA Scalp Signals?

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