Signal Bar – Breakout Failure Tick

Signal Bar – Breakout Failure Tick
Indicator for NinjaTrader® 7/8

E-mini S&P 500 Future 5 min chart (click to enlarge)

 


Features

  • shows Tick Failure Breakouts above or below possible Signal Bars
  • shows possible signals in real-time
  • entry method suggestions
  • alert feature
  • does not work on HeikenAshi, Kagi, Renko, PointAndFigure and LineBreak charts
  • achieves best results on futures and equities (on centralized markets) with time based charts (all participants seeing the same data)

Example Charts


Download a 20 day trial version

Download for NinjaTrader 7  (how to install, see here for help)
Download for NinjaTrader 8  (how to install, see here for help)

Sound file .zip file  (how to install, see here for help)

All of our available paid indicators are distributed in one package.
This package also includes a chart template (“PA_Indicators_ES_5min”) .
After installing the indicator package into NinjaTrader, that chart template can be
used to show a possible setup of the indicators for the ES E-mini 5 minute RTH chart.

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“Hi Thomas, thank you for the work you have developed.
I have downloaded all of your indicators, trial and free
and started to get a feel for them one by one.” Great stuff!
 Paul C.

What are Signal Bars and Entry Bars?

A Signal Bar can be a single candlestick or a bar within a pattern that signals a trader that a possible trade is likely setting up. Just about every bar is a potential Signal Bar. Most of them never lead to an entry though and hence do not become Signal Bars. Many times a Signal Bar can be a setup for a trade in either direction.

Once the Signal Bar has completed, a trader places his stop entry order above or below the Signal Bar. The bar, that moves past the range of the Signal Bar triggers the entry order and puts the trader into that trade. This bar becomes the Entry Bar.

What are Tick Failure Breakouts of Signal Bars?

Tick Failure Breakouts of possible Signal Bars are breakout failures from stop entries above or below these bars.

1 or 2 tick Tick Failure Breakouts of possible Signal Bars (on the ES E-mini) can be considered a failed breakout for traders, who entered on a stop entry above or below that bar. In stocks, Tick Failure Breakouts are often around one to a couple of cents, depending on the price and volatility of the stock.

5 tick Tick Failure Breakouts of possible Signal Bars (on the ES E-mini) can be considered a failure to reach a common scalp target, since a scalp for four ticks (one point) is a very popular trade. A six tick breakout is needed to fill a four tick profit target for a trader who entered on a breakout of the Signal Bar (one tick to enter on a stop, four ticks profit, and one more tick to fill the profit target limit order).

A 5 tick Tick Failure Breakout of a possible Signal Bar (on the ES E-mini) also often means, that there were sellers above that bar (for a bull Signal Bar), who also might have scaled-in one point (four ticks) higher. The same can be true for a 9 tick Tick Failure Breakout, where sellers were able to scale-in twice above that Signal Bar (one and two points higher).

Tick Failure Breakouts of possible Signal Bars can be found in all liquid futures markets, that have many scalpers, like ES, NQ, CL, as well as ETFs like SPY or QQQ, highly liquid stocks and FOREX.
If you trade the MES, load the indicator on the ES chart (the volume is much larger) and take the trades on the MES.

Aggressive/advanced traders buy or sell closes of possible Signal Bars. This creates an Entry Bar with no (shaved Open) or a very small tail on one side. Often this means urgency and a failure of such an Entry Bar can be a great signal. The indicator tries to accommodate for that as well.

Read more on this topic in Al Brooks book:
Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader 
Chapter 9
Failed Signal and Entry Bars and One-Tick Failed Breakouts – page 222 and
Failed Scalps: Five-Tick Failed Breakouts and Failure to Reach a Scalper’s Profit Target – page 251

What do I need to set the Tick Failure to?

Tick Failure Breakouts largely depend on the market and time frame you are trading. Some common scalp targets are (add one or two ticks (futures/equities) for the failure):
ES – 4/6, 8, 12 and 16 ticks
NQ – 10, 20 ticks
CL – 5, 10, 15 ticks
SPY – 10 ticks (cents)
AAPL (Apple stock) – 50, 100 ticks (which is 50 cents and $1)

On the ES E-mini 5 min chart 1 or 2 tick failures are failed breakouts and 5 or 7, 9, 13 and 17 tick are failures to reach common scalp targets.
If you trade the MES, load the indicator on the ES chart (the volume is much larger) and take the trades on the MES.
Best results are achieved on futures and equities.

Can I simply trade every signal?

This largely depends on context, trading style and stop loss (risk), also on your ability to scale in and the use of wide or swing stops (below the last higher low or above the last lower high in a trend).
Confluence is very important in trading and means to have several (at least two) reasons to take a trade. Your 1st reason is the Tick Failure Breakout and your 2nd reason can be e.g. Support / Resistance, measured moves, trend line / trend channel line overshoot, Buying/Selling Pressure, a 2nd attempt to reverse and many more.

See also the scale-in approach discussed with another indicator here: Can I simply trade every signal?
Also check out the Blog for more examples on how to use Tick Failure Breakouts of possible Signal Bars in your trading.

What do the signals mean?

Signal Text Background Color Entry Method
5t
5 tick failure from the low of the Signal Bar, which can occur on the Entry Bar or later
no Background Color no suggestion

trade according to context
with trend, support / resistance or other confluence
check out the Blog for more examples

5t
5 tick failure from the high of the Signal Bar, which can occur on the Entry Bar or later
Bear Background Color
there was an earlier bear move or exhaustion
Sell Above
5t
5 tick failure from the low of the Signal Bar, which can occur on the Entry Bar or later
Bull Background Color
there was an earlier bull move or exhaustion
Buy Above
Buy Below
5t O
5 tick failure from the open of the Entry Bar
for shaved open entry bars (or with a small tail on the Open side)
no Background Color no suggestion

trade according to context
with trend, support / resistance or other confluence
check out the Blog for more examples

5t OB
5 tick failure from the low of the Signal Bar, the Signal Bar is an Outside Bar
Outside Bars are often “mini” trading ranges
no Background Color no suggestion

trade according to context
with trend, support / resistance or other confluence
check out the Blog for more examples

fEB 5t
5 tick failure on the Entry Bar from the high of the Signal Bar, probably trapping early bulls
Bear Background Color
there was an earlier bear move or exhaustion
the Entry Bar has opposite color to the Signal Bar, trapping breakout traders of the Signal Bar immediately
Sell Below
fEB 9t
9 tick failure on the Entry Bar from the high or low of the Signal Bar, probably trapping late bears
Entry Bar Background Color
the Entry Bar has opposite color to the Signal Bartrapping breakout traders of the Signal Bar immediately
Buy Above
9t O, lmt C
9 tick failure on the Entry Bar from the open of the Entry Bar for shaved open entry bars, or with a small tail on the Open side
Bear Background Color
there was an earlier bear move or exhaustion
Sell Limit Close
Sell Above
5t B1 or 5t B2
5 tick failure from the high or low of the 1st bar of the session (or the 2nd bar, if that is an Outside Bar of the 1st bar of the session)
useful, if you trade charts with gaps , like RTH
no Background Color no suggestion

trade according to context
with trend, support / resistance or other confluence
check out the Blog for more examples

Yellow lines
1 or 2 tick failures of the prior bar (e.g. sellers above (SA) an Entry Bar, like disappointed buyers exit above a weak Entry Bar)
set line color and thickness in settings no suggestion

trade according to context
with trend, support / resistance or other confluence
check out the Blog for more examples

Entry Method

The indicator tries to suggest an appropriate entry method for the context, the Tick Failure Breakout of the Signal Bar occurs in.
This is no investment advice, the investor is solely responsible for the choice of the indicator signals or entry  method. Please read our Disclaimer.

Stop Entry above stop buy order 1 tick above the high of the bar
Stop Entry below stop sell order 1 tick below the low of the bar
Buy Below limit buy order at the low of the bar (advanced traders)
Sell Above limit sell order at the high of the bar (advanced traders)
Buy Limit Close buy the close of the bar with a limit order (advanced traders)
Sell Limit Close sell the close of the bar with a limit order (advanced traders)

 

What are the settings?

The settings probably need to be tweaked especially to the “personality” and time frame of the instrument you’re trading.
If you trade the MES, load the indicator on the ES chart (the volume is much larger) and take the trades on the MES.

Show Last 200 Bars only
Show the indicator signals only for the last 200 bars, which will speed up a reload of the chart or indicator

Sound Alert
Play a sound and show an alert in the alert window

Sound Alert on Prior Bar
Also alert on a Tick Failure Breakout of the Prior Bar

Sound Alert Percent
Sound Alert, when Bar is to (Percent) complete (does not work for Range, Kagi or LineBreak)
leave Rearm Seconds 0 (zero), if using on a Range, Kagi or LineBreak chart

Sound Alert Rearm Seconds
Rearm Sound Alert after (Rearm Seconds)
if not using Sound Alert Percent or for Range, Kagi or LineBreak

Sound Alert File
Pick a .WAV file from the NinjaTrader sound folder (how to install sounds, see here )

Ticks
Extend of the Tick Failure Breakout in ticks from the high or low of the Signal Bar

Show for Entry Bar only
Show a possible Tick Failure Breakout only on the Entry Bar (the bar after the  Signal  Bar)

Show for Prior Bar
Show Tick Failure Breakouts of the prior bar (also, if that is not a Signal Bar)
show lines from the prior bar high/low to the current bar high/low, if that is a Tick Failure

Show Untriggered
Otherwise Tick Failure breakouts, that don’t trigger, will be deleted

Text Size, Offset and Color
Set text properties

Bull Background Color
Please see “What do the signals mean?” above

Bear Background Color
Please see “What do the signals mean?” above

Entry Bar Background Color
Please see “What do the signals mean?” above

Micro Double Bottom/Top Color
Color for the line, that shows a double bottom or top of the Tick Failure Breakout bar with a prior bar

Tick Failure Prior Bar Color and Line Thickness
Please see “What do the signals mean?” above

 

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