No-lose trading targets (Based on EoRfA)

The No-lose trading targets (Based on EoRfA) indicator provides visual target levels and potential reversal zones based on sudden price movements and overextended market conditions using the EoRfA (Element of Risk for Assets) calculation.

Usage

The tool identifies overbought and oversold regions to project horizontal target lines that the price is expected to revisit after a sharp move.

• Short Opportunities: When the price enters an overbought state (indicated by the red area), a horizontal target line is generated. Traders often look for a retracement back toward the beginning of this horizontal red boundary.
• Long Opportunities: When the price enters an oversold state (indicated by the green area), a horizontal target line appears. Traders can look for price action to return toward the starting horizontal level of this green zone.
• Fibonacci Levels: The indicator dynamically plots Fibonacci retracement levels (0.236, 0.381, 0.500, 0.618, 0.763) between the established target and the extreme high or low of the move, providing intermediate points of interest.

Details

The indicator utilizes the EoRfA oscillator logic, which compares a Weighted Moving Average (WMA) of the price to an Exponential Moving Average (EMA) and normalizes the result using standard deviation. This serves as a measure of how far the price has deviated from its mean.

• Trigger Logic: Signals are generated when the EoRfA value exceeds a user-defined limit.
• Target Persistence: Once a target is set, it remains on the chart until the price successfully crosses back over the horizontal level or a counter-signal is generated.

Settings

• Reference: The source price used for calculations (default is Close).
• Length: The lookback period used for the standard deviation and EMA calculations.
• Limit: The threshold used to determine overbought and oversold conditions; higher values require more extreme moves to trigger targets.

FAQ

How do I use the target lines?

The target lines represent "magnetic" prices that the market frequently revisits after a period of exhaustion. They are typically used as take-profit zones for counter-trend trades.

What is the purpose of the colored areas?

The red areas signify overbought conditions where the market may be overextended to the upside, while green areas signify oversold conditions where the market may be overextended to the downside.

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.