Strategy

If you don't have your set trading system, this page aims to teach an effective strategy to use with QW

Hypothesis:

At its root core, Quantum Wave is an oscillator and these types of indicators work well in ranging markets. That is also why (as advised in the documentation) we do not recommend you take signals during volatile moves. Using the Visible Range Volume Profile provided in Trading View, we can help eliminate false signals given by volatile moves within the markets. Essentially, proper use of the VRVP helps identify ranges and the Quantum Wave helps execute and confirm the setups

Backtested results on USOIL 5min:

• 75% winrate ( 6W, 2L )

• 11.05 total RR

Indicators used

• Quantum Wave Automatic

• VRVP

  • Settings:

    • Rows layout: Number of rows

      • Row Size: 100

      • Volume: Up/down

      • Value Area Volume: 70

What is Visible Range Volume Profile?

Visible Range Volume Profile (VRVP) indicator calculates the volume profile within the visible range of prices, making it an ideal tool for traders who want to analyze the most recent market trends.

VRVP consists of four main components:

1. the Value Area High (VAH) – the highest price in the Value Area;

2. the Value Area Low (VAL) – the lowest price in the Value Area;

3. the Point Of Control (POC) – the price level, at which the maximum number of contracts were executed during a selected period.

4. Value Area Volume Specifies what percentage of all volume for the trading session should be highlighted by Value Area.

Diagram of VRVP

Rules:

Valid signals: When the green, yellow, and red wave are oversold/overbought

1. Use VAL/VAH to weed out bad signals.

   1. If price is above or at the VAH, don’t take sells.

   2. If price is below or at the VAL, don't take buys.

2. Trade within the Value Area

   1. If price goes below the VAL and comes back into the value area, look for buys with TPs at the POC and VAH with a SL at the LOW

   2. if price goes above the VAH and comes back into the value area, look for sells with a TPs at the POC and VAL with a SL at the HIGH.

3. Price is at the POC, the direction inwhich you trade towards is the area that hasn't been claimed yet.

   1. If price hasn't hit the VAH, look to take a buy signal

   2. If price hasn't hit the VAL, look to take a sell signal.

Example 1

Green line = VAL, price is below it

Price is below the VAL. Even though there is a valid buy signal, it below the VAL and we shouldn't take this signal as it violates Rule 1

Example 2

Price reclaims the value area after falling below it

Price has taken the VAL and reclaimed the Value Area. According to Rule 2, we should look for buys with TPs at the POC and VAH with a SL at the LOW.

Example 3

Price took out the VAH and reclaims the value area and is at the POC

Price took out the VAH and reclaimed the Value Area. According to Rule 3, price is at the POC and we should look to take a sell signal because the price hasn't hit the VAL.