Day Trading with Price Action
Indicator Manual
Galen Woods
Trading Setups Review
Copyright © 2014. Galen Woods.
NinjaTrader 7 Edition (Version 1.0)
Cover Design by Beverley S.
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Copyright © 2014 by Galen Woods (Singapore Business
Registration No. 53269377M). All rights reserved.
Day Trading with Price Action Indicators - Version 1.0
Released on 1 September 2014 by Galen Woods (Singapore
Business Registration No. 53269377M).
All charts were created with NinjaTrader™. NinjaTrader™ is a
Registered Trademark of NinjaTrader™, LLC. All rights reserved.
No part of this publication may be reproduced or transmitted in
any form or by any means, electronic or mechanical, without
written permission from the publisher, except as permitted by
Singapore Copyright Laws.
Affiliate Program
If you find this set of indicators to be valuable and wish to offer
it for sale to your own customers or readers, please contact
Galen Woods to be an affiliate to get a percentage of each sales
as commission.
Contact Information
Galen Woods can be reached at:


Website: http://www.tradingsetupsreview.com
Email: galenwoods@tradingsetupsreview.com
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Disclaimer
The information provided within the Day Trading with Price
Action eBook series and any supporting documents, software,
websites, and emails is only for the purposes of information and
education. We don't know you so any information we provide
does not take into account your individual circumstances, and
should NOT be considered advice. Before investing or trading on
the basis of this material, both the author and publisher
encourage you to first seek professional advice with regard to
whether or not it is appropriate to your own particular financial
circumstances, needs and objectives.
The author and publisher believe the information provided is
correct. However we are not liable for any loss, claims, or
damage incurred by any person, due to any errors or omissions,
or as a consequence of the use or reliance on any information
contained within the Day Trading with Price Action eBook series
and any supporting documents, software, websites, and emails.
Reference to any market, trading timeframe, analysis style or
trading technique is for the purpose of information and
education only. They are not to be considered a
recommendation as being appropriate to your circumstances or
needs.
All charting platforms and chart layouts (including timeframes,
indicators and parameters) used within this eBook series are
being used to demonstrate and explain a trading concept, for
the purposes of information and education only. These charting
platforms and chart layouts are in no way recommended as
being suitable for your trading purposes.
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Charts, setups and trade examples shown throughout this
product have been chosen in order to provide the best possible
demonstration of concept, for information and education
purposes. They were not necessarily traded live by the author.
U.S. Government Required Disclaimer: Commodity Futures
Trading and Options trading has large potential rewards, but
also large potential risk. You must be aware of the risks and be
willing to accept them in order to invest in the futures and
options markets. Don't trade with money you can't afford to
lose. This is neither a solicitation nor an offer to Buy/Sell futures
or options. No representation is being made that any account
will or is likely to achieve profits or losses similar to those
discussed on this web site. The past performance of any trading
system or methodology is not necessarily indicative of future
results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED
PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE
AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO
NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES
HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDEROR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF
CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO
SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE
BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE
THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT
OR LOSSES SIMILAR TO THOSE SHOWN.
Hyperlinks in this series contain Amazon affiliate links.
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Contents
Chapter 1 – Introduction ...................................................... 1
Chapter 2 – Setting Up ........................................................ 3
2.1 - NinjaTrader.............................................................. 3
2.2 - Indicators ................................................................ 3
2.3 - Chart Template ........................................................ 4
2.3.1 - Loading the Chart Template ................................. 4
2.3.2 - Modifying and Saving the Chart Template .............. 5
2.3.3 - Additional Considerations ..................................... 5
2.4 - Market Analyzer ....................................................... 6
2.4.1 - Loading the Market Analyzer template ................... 6
2.4.2 - Understanding the Market Analyzer ....................... 7
Chapter 3 – Trading Tools .................................................... 8
3.1 - Price Action Time-Frame Index (PATI) ......................... 8
3.1.1 - Construction ....................................................... 8
3.1.2 - Plots & Inputs ..................................................... 9
3.1.3 - How to Use ........................................................ 9
3.2 - Reward-to-Risk (R2R) Indicator ................................ 10
3.2.1 - Construction ..................................................... 10
3.2.2 - Plots & Inputs ................................................... 11
3.2.3 - How to Use ...................................................... 12
Chapter 4 – Price Pattern Tools ........................................... 13
4.1 - Congestion Zone / Break-out Failure ......................... 13
4.1.1 - Construction ..................................................... 14
4.1.2 - Plots & Inputs ................................................... 15
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4.1.3 - How to Use ...................................................... 16
4.2 - Trend Bar Failure .................................................... 17
4.2.1 - Construction ..................................................... 17
4.2.2 - Plots & Inputs ................................................... 18
4.2.3 - How to Use ...................................................... 19
4.3 - Deceleration .......................................................... 19
4.3.1 - Construction ..................................................... 19
4.3.2 - Plots & Inputs ................................................... 20
4.3.3 - How to Use ...................................................... 21
4.4 - Anti-Climax ............................................................ 22
4.4.1 - Construction ..................................................... 22
4.4.2 - Plots & Inputs ................................................... 23
4.4.3 - How to Use ...................................................... 24
4.5 - Pressure Zone ........................................................ 24
4.5.1 - Construction ..................................................... 24
4.5.2 - Plots & Inputs ................................................... 25
4.5.3 - How to Use ...................................................... 26
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Chapter 1 – Introduction
This is a guide to using the “Day Trading with Price Action”
indicators. This version consists of the following indicators:
Trading Tools
1. Price Action Time-Frame Index (PATI)
2. Reward-to-Risk (R2R) Indicator
Price Action
3.
4.
5.
6.
7.
Congestion Zone
Trend Bar Failure
Deceleration
Anti-Climax
Pressure Zone
This bundle of price action indicators serves as a complement to
the “Day Trading with Price Action” eBook series. It is strongly
recommended that you read the series before using these
indicators.
Do not employ them mechanically.
This manual will cover the following aspects for each indicator.



Construction of each indicator
Explanation of its inputs
Summary of its usage
The default settings of each indicator correspond to the version
explained in the “Day Trading with Price Action” eBook series.
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Chapter 1 – Introduction
Refer to the series for the trading concepts underlying these
price patterns and the trading techniques associated with them.
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Chapter 2 – Setting Up
To use the indicators on the NinjaTrader platform, follow the
instructions below.
These instructions are the minimal steps to use the indicators
and related templates. They are not an exhaustive guide to
NinjaTrader. For the official guide to using NinjaTrader, please
refer to its online guide.
2.1 - NinjaTrader
You need the NinjaTrader charting platform to use the
indicators.
1. Download the NinjaTrader 7 charting platform from
www.ninjatrader.com.
2. Install NinjaTrader 7.
3. If you need intraday futures data to get started with the
indicators, contact one of NinjaTrader’s partner brokers (or
NinjaTrader Brokerage itself) and request for a demo account.
4. Learn the basic functions of NinjaTrader with this short
article. It covers how to connect to a data source, load a chart
and apply indicators. If you are new to NinjaTrader, please
do not skip this step.
2.2 - Indicators
Before you can use the price action indicators, you need to
import them into NinjaTrader. Follow these steps to import the
price action indicators.
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Chapter 2 – Setting Up
1. Open NinjaTrader 7
2. From the Control Center window, select the menu File >
Utilities > Import NinjaScript to open the Import NinjaScript
dialog window.
3. Select DayTradingWithPriceActionIndicators.zip and
click the Open button.
You have imported the indicators into NinjaTrader 7.
2.3 - Chart Template
We have included a chart template for the price action indicators
to help you get started.
2.3.1 - Loading the Chart Template
Follow these steps to load the chart template.
1. On a chart, right click and select the menu item Templates
followed by the Load... menu item. The Load Chart Template
window will appear.
2. Select PriceActionChart from the list of templates and press
the OK button.
This chart template will load the following indicators on the
chart.




GalenWoodsCongestion (blue zones with green and red
arrows)
GalenWoodsAntiClimax (blue arrows)
GalenWoodsDeceleration (pink arrows)
GalenWoodsPressureZone (green and red zones)
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Chapter 2 – Setting Up
2.3.2 - Modifying and Saving the Chart Template
You may modify the template to suit your trading style and
preference. Retaining your changes to the chart template is
simple.
1. Right click and select the menu item Templates followed by
the Save As... menu item. The Save Chart Template window
will appear.
2. Enter a name for your template and press the OK button.
2.3.3 - Additional Considerations
In the sample chart template, we excluded three indicators.



GalenWoodsPATI
GalenWoodsR2R
GalenWoodsTrendBarFailure
GalenWoodsPATI is not meant for use during live trading. Its
purpose is to determine, with historical data, if a time-frame is
tradeable. Hence, we should employ it separately.
GalenWoodsR2R is used for ascertaining if a trading setup offers
positive expectancy and should be used during live trading.
However, it can clutter the chart with the many projected target
levels. To avoid a cluttered chart, you may exclude it during the
learning phase and include it later when you comfortable with
reading prices.
GalenWoodsTrendBarFailure is not loaded as it is the simplest
pattern. With some practice, it is the easiest price pattern to
spot without the help of an indicator.
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Chapter 2 – Setting Up
In addition, the Trend Bar Failure signal marker often overlaps
with other price patterns. Hence, if you want to use the
GalenWoodsTrendBarFailure indicator in conjunction with other
price action indicators, use the Displacement option ensure that
the signal markers do not overlap. (More about the
displacement option in Chapter 1.)
To build the optimal chart template for your trading, you must
understand the trading concepts in the “Day Trading with Price
Action” book series.
2.4 - Market Analyzer
NinjaTrader has a Market Analyzer function that is useful for
scanning across different markets and time-frames.
We have included a sample Market Analyzer template that scans
for price patterns on the 5-minute time-frame.
2.4.1 - Loading the Market Analyzer template
Follow these steps to load the Market Analyzer template.
1. Select File > New > Market Analyzer… to open the Market
Analyzer window.
2. Right mouse click within the Market Analyzer window.
3. Select the menu item Templates > Load….
4. Select PriceActionAnalyser from the dropdown list of
templates and press the OK button.
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Chapter 2 – Setting Up
5. To add instruments to the Market Analyzer, right mouse click
within the Market Analyzer window. Select the menu item Add
Instrument…
6. Select the instrument you want to monitor using the Market
Analyzer. Click OK.
2.4.2 - Understanding the Market Analyzer
The PriceActionAnalyser template shows if each price action
pattern is currently present in the selected instrument(s).
To interpret the values shown in the PriceActionAnalyser, refer
to Table 2-1.
Bullish
Pattern
Bearish
Pattern
No Pattern
Congestion
Zone
N/A
N/A
0 (1 if market is in
congestion)
Break-out
Failure
1
-1
0
Anti-Climax
1
-1
0
Deceleration
1
-1
0
Trend bar
Failure
1
-1
0
Pressure Zone
1
-1
0
Table 2-1 Meaning of values in PriceActionAnalyser
For details, refer to the section on each indicator.
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Chapter 3 – Trading Tools
The first two indicators in the bundle do not mark out price
patterns. They are trading tools that perform even more crucial
functions.
1. GalenWoodsPATI
2. GalenWoodsR2R
3.1 - Price Action Time-Frame Index (PATI)
The PATI indicator determines if a time-frame is amenable to
price action analysis.
3.1.1 - Construction
A Marubozu is a price bar with its open and close at extreme
ends of the bar.
A Doji is a price bar with its open and close at the same price.
By default, the PATI indicator calculates the ratio of bars that
are either Marubozus or Dojis in the last 10 bars.
If the ratio exceeds 0.5 (50%), the time-frame is deemed nontradeable.
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Chapter 3 – Trading Tools
3.1.2 - Plots & Inputs
Figure 3-1 ES 5-minute chart with PATI indicator
The PATI indicator plots the Index value in the lower panel.
It has a Check Line at 0.5. (If the PATI value is below 0.5 for
the entire chart, you will not see the Check Line.)
When the Index rises above the Check Line, the chart is flooded
with a color (red by default) to indicate a non-tradeable Zone.
Input
Field
Period
Remarks
Zone
Opacity
Opacity of the non-tradeable zone.
The number of bars to consider for calculating the
index. The default value is 10.
Zone Color Color of the non-tradeable zone.
Table 3-1
3.1.3 - How to Use
To find out if a time-frame is amenable to price action analysis:
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Chapter 3 – Trading Tools
1. Load at least 30 days of market data in your desired
time-frame. (For e.g. 5-minute bars)
2. Load the PATI indicator.
3. Check if the chart shows any non-tradeable zones within
the 30 days of market data.
4. If there are non-tradeable zones, increase your timeframe and go back to step 3. If not, the time-frame is
tradeable.
Perform checks with PATI regularly.
Refer to Volume II Chapter 2 of the eBook series for details.
3.2 - Reward-to-Risk (R2R) Indicator
For a given probability, the R2R indicator plots the minimum
target price level required for a trading opportunity to offer
positive expectancy.
3.2.1 - Construction
The R2R indicator assumes that you will:


Buy a tick above the current bar and place a stop-loss a
tick below it; or
Sell a tick below the current bar and place a stop-loss a
tick above it.
In any case, your trade risk is the bar range plus two ticks.
Together with an input value for the probability of winning, it
uses the following formula to calculate the trade reward (W)
needed for zero expectancy.
Expectancy = (W x R) – [(1 - W) x L]
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Chapter 3 – Trading Tools



Winning Probability = W
Trade Reward = R
Trade Risk = L
After deriving the trade reward needed, it projects that amount
from the assumed entry price (a tick above the bar or a tick
below it). The projected marker represents the target level for
zero expectancy.
3.2.2 - Plots & Inputs
Figure 3-2 ES 5-minute chart with R2R indicator
The R2R indicator plots two levels: BearishTarget and
BullishTarget for each price bar.
The BearishTarget is the target that corresponds to zero
expectancy for a short trade setup. It plots below each price
bar.
The BullishTarget is the target that corresponds to zero
expectancy for a long trade setup. It plots above each price bar.
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Chapter 3 – Trading Tools
Risk Parameters
Input Field
Remarks
Probability of
Winning
The winning probability used to derive the
required trade reward. The default value is
40%.
Long shows only bullish targets. Short shows
only bearish targets. Both shows targets in
both directions.
Number of ticks to add to trade risk. Use it to
include the impact of commissions and
slippage.
Target
Direction
Buffer Amount
Table 3-2
Volatility Add-On
Input
Field
Filter
Period
Remarks
Choose if you want to hide the targets for wide range
bars. (i.e. higher trade risk)
Bars with range above the average bar range are
considered ‘wide range’. The average bar range is
calculated based on this period.
Table 3-3
3.2.3 - How to Use
Enter a trade only if your target lies beyond the R2R target plot.
(i.e. positive expectancy)
You must set Calculate on bar close to False for effective
ongoing analysis of trade expectancy.
If you want to avoid using wide range bars as setup bars,
choose True for the Filter option under Volatility Add-On.
Refer to Volume IV Chapter 5.1.1 of the eBook series for details.
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Chapter 4 – Price Pattern Tools
These price pattern indicators are meant as educational tools
rather than trading tools. They mark out price patterns
according to our definition in the “Day Trading with Price Action”
series to facilitate your learning.
While you may also employ them in your trading process, there
are two important points to note:



You should also be able to pick up these patterns without
the help of the indicators.
You should not base any trades on these indicators in
isolation.
You should not trade these indicators mechanically.
There are five price pattern indicators.
1.
2.
3.
4.
5.
GalenWoodsCongestion
GalenWoodsTrendBarFailure
GalenWoodsDeceleration
GalenWoodsAntiClimax
GalenWoodsPressureZone
For these indicators, Calculate on bar close must always be
set to True.
4.1 - Congestion Zone / Break-out Failure
This indicator identifies areas of congested price action. It also
marks out possible failures of congestion break-out.
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Chapter 4 – Price Pattern Tools
4.1.1 - Construction
The indicator will mark out a Congestion Zone when three
consecutive price bars fail to close beyond their preceding price
bar.
A Congestion Zone is defined as the area between the highest
close and lowest close of the bars forming the Zone.
If the market is in congestion, the indicator will also look for
Congestion Break-out Failures.
A bullish Congestion Break-out Failure occurs when:
1. The market is in congestion.
2. A bar closes below the range of the preceding bar.
3. The next bar is a bullish bar.
A bearish Congestion Break-out Failure occurs when:
1. The market is in congestion.
2. A bar closes above the range of the preceding bar.
3. The next bar is a bearish bar.
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Chapter 4 – Price Pattern Tools
4.1.2 - Plots & Inputs
Figure 4-1 ES 5-minute chart with Congestion Zones and Break-out Failures
This indicator plots the Congestion Zone by drawing a
rectangle to surround the congested price action area. Some
Congestion Zones are concentrated at a single price level. For
such instances, a horizontal line, instead of a rectangle, will be
drawn.
As a Congestion Zone is only confirmed with its third bar, the
first and second bars are included into the marked Zone
retrospectively.
It also marks out arrows for Congestion Break-out Failures.
An upwards pointing arrow marks out the setup bar for a bullish
pattern. A downwards pointing arrow marks out the setup bar
for a bearish pattern.
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Chapter 4 – Price Pattern Tools
Congestion Zone
Input
Field
Color
Remarks
Opacity
Opacity of Congestion Zones. 0 is transparent and
10 is opaque.
Thickness of single-price Congestion Zones.
Line Width
Color of Congestion Zones.
Table 4-1
Congestion Break-Out Failure
Input Field
Remarks
Show Signals
Bullish Signal Color
Choose if you want the Break-out Failure
patterns to be marked or hidden.
Color of bullish Break-out Failure signals
Bearish Signal Color
Color of bearish Break-out Failure signals
Table 4-2
Under Visual, there is a Signal Displacement field. It allows
you to adjust the distance (in number of ticks) between the
indicator arrows and the price bars. If you use multiple price
pattern indicators, you can increase the displacement to avoid
overlapping of signal arrows.
4.1.3 - How to Use
Beware of trading when the market is in congestion.
Congestion Break-out Failures must be triggered within one bar.
If not, the signal should be ignored.
Refer to Volume III Chapter 2 and 3 of the eBook series for
details.
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Chapter 4 – Price Pattern Tools
Advanced
For the Market Analyzer and using the indicator within another
indicator or strategy, the following states are exposed.
Failure
Value
Meaning
0
Default
1
Bullish Congestion Break-out Failure
-1
Bearish Congestion Break-out Failure
Table 4-3
Congested
Value
Meaning
0
Default; not in congestion
1
In congestion
Table 4-4
4.2 - Trend Bar Failure
The Trend Bar Failure indicator identifies the lack of followthrough price action following a clearly directional price bar.
4.2.1 - Construction
The body of a price bar is the difference between its open and
close. The range of a price bar is the difference between its high
and its low.
A trend bar is a price bar with a body that takes up more than
half of its range.
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Chapter 4 – Price Pattern Tools
When a bullish trend bar is not followed by another bullish trend
bar, a bearish Trend Bar Failure is highlighted.
When a bearish trend bar is not followed by another bearish
trend bar, a bullish Trend Bar Failure is marked.
4.2.2 - Plots & Inputs
Figure 4-2 ES 5-minute chart with Trend Bar Failure indicator
This indicator marks out arrows for Trend Bar Failures. An
upwards pointing arrow marks out the setup bar for a bullish
pattern. A downwards pointing arrow marks out the setup bar
for a bearish pattern.
Display
Input Field
Remarks
Bullish Signal Color
Color of bullish Trend Bar Failure signals
Bearish Signal Color Color of bearish Trend Bar Failure signals
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Chapter 4 – Price Pattern Tools
Table 4-5
Under Visual, there is a Signal Displacement field. It allows
you to adjust the distance (in number of ticks) between the
indicator arrows and the price bars. If you use multiple price
pattern indicators, you can increase the displacement to avoid
overlapping of signal arrows.
4.2.3 - How to Use
Trend Bar Failures must be triggered within one bar. If not, the
signal should be ignored.
Refer to Volume III Chapter 4 of the eBook series for details.
Advanced
For the Market Analyzer and using the indicator within another
indicator or strategy, the following state is exposed.
Failure
Value
Meaning
0
Default
1
Bullish Trend Bar Failure
-1
Bearish Trend Bar Failure
Table 4-6
4.3 - Deceleration
The Deceleration indicator finds weakening price thrusts.
4.3.1 - Construction
A bearish Deceleration must meet the following criteria:
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Chapter 4 – Price Pattern Tools


Three consecutive bars with higher bar highs.
The distance by which the preceding bar is exceeded
must be decreasing.
A bullish Deceleration must meet the following criteria:


Three consecutive bars with lower bar lows.
The distance by which the preceding bar is exceeded
must be decreasing.
4.3.2 - Plots & Inputs
Figure 4-3 ES 5-minute chart with Deceleration indicator
This indicator marks out arrows for Deceleration patterns. An
upwards pointing arrow marks out the last bar of a bullish
Deceleration pattern. A downwards pointing arrow marks out
the last bar of a bearish Deceleration pattern.
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Chapter 4 – Price Pattern Tools
Display
Input Field
Remarks
Bullish Signal Color
Color of bullish Deceleration signals
Bearish Signal Color
Color of bearish Deceleration signals
Table 4-7
Under Visual, there is a Signal Displacement field. It allows
you to adjust the distance (in number of ticks) between the
indicator arrows and the price bars. If you use multiple price
pattern indicators, you can increase the displacement to avoid
overlapping of signal arrows.
4.3.3 - How to Use
This indicator marks out the last bar of a Deceleration pattern
which is not always the setup bar.
For bullish patterns, wait for a bullish bar to serve as the setup
bar. For bearish patterns, wait for a bearish setup bar.
Refer to Volume III Chapter 5 of the eBook series for details.
Advanced
For the Market Analyzer and using the indicator within another
indicator or strategy, the following state is exposed.
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Chapter 4 – Price Pattern Tools
Deceleration
Value
Meaning
0
Default
1
Bullish Deceleration pattern
-1
Bearish Deceleration pattern
Table 4-8
4.4 - Anti-Climax
The Anti-climax indicator finds climatic and exhaustive price
thrusts.
4.4.1 - Construction
A bearish Anti-climax pattern must meet the following criteria:


Three consecutive bars with higher bar highs.
The distance by which the preceding bar is exceeded
must be increasing.
A bullish Anti-climax pattern must meet the following criteria:


Three consecutive bars with lower bar lows.
The distance by which the preceding bar is exceeded
must be increasing.
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Chapter 4 – Price Pattern Tools
4.4.2 - Plots & Inputs
Figure 4-4 ES 5-minute chart with Anti-Climax indicator
This indicator marks out arrows for Anti-climax patterns. An
upwards pointing arrow marks the last bar of a bullish Anticlimax pattern. A downwards pointing arrow marks out the last
bar of a bearish Anti-climax pattern.
Display
Input Field
Remarks
Bullish Signal Color
Color of bullish Anti-climax signals
Bearish Signal Color
Color of bearish Anti-climax signals
Table 4-9
Under Visual, there is a Signal Displacement field. It allows
you to adjust the distance (in number of ticks) between the
indicator arrows and the price bars. If you use multiple price
pattern indicators, you can increase the displacement to avoid
overlapping of signal arrows.
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Chapter 4 – Price Pattern Tools
4.4.3 - How to Use
This indicator marks the last bar of an Anti-climax pattern.
However, the marked bar is not always the setup bar.
For bullish patterns, wait for a bullish bar to serve as the setup
bar. For bearish patterns, wait for a bearish setup bar.
Refer to Volume III Chapter 6 of the eBook series for details.
Advanced
For the Market Analyzer and using the indicator within another
indicator or strategy, the following state is exposed.
Anticlimax
Value
Meaning
0
Default
1
Bullish Anti-climax pattern
-1
Bearish Anti-climax pattern
Table 4-10
4.5 - Pressure Zone
The Pressure Zone indicator identifies areas that exhibit buying
or selling pressure.
4.5.1 - Construction
This indicator marks out Pressure Zones when three consecutive
price bars exhibit overlapping tails/shadows/wicks.
A bullish Pressure Zone occurs when the lower tails overlap. A
bearish Pressure Zone occurs when the higher tails overlap.
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Chapter 4 – Price Pattern Tools
As a Pressure Zone is only confirmed with its third bar, the first
and second bars are marked as part of the Zone retrospectively.
4.5.2 - Plots & Inputs
Figure 4-5 ES 5-minute chart with Pressure Zone indicator
This indicator plots a Pressure Zone by drawing a rectangle to
surround the overlapping tails.
Bullish Pressure Zones and bearish Pressure Zones are
distinguished by their colours.
Parameters
Input Field
Remarks
Overlap Filter
Color of Pressure Zones.
Table 4-11
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Chapter 4 – Price Pattern Tools
Display
Input Field
Remarks
Bearish Zone Color
Color of bearish Pressure Zones.
Bullish Zone Color
Color of bullish Pressure Zones.
Zone Opacity
Opacity of all Pressure Zones. 0 is
transparent and 10 is opaque.
Table 4-12
4.5.3 - How to Use
The setup bar is not static. Start looking for setups after a
Pressure Zone forms.
Use bullish bars for bullish Pressure Zone setups, and bearish
bars for bearish Pressure Zone setups.
Refer to Volume III Chapter 7 of the eBook series for details.
Advanced
For the Market Analyzer and using the indicator within another
indicator or strategy, the following state is exposed.
Pressure
Value
Meaning
0
Default
1
Bullish Pressure Zone
-1
Bearish Pressure Zone
Table 4-13
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