POC | TrendLines | Displacement Candles | EQH & EQL
🎯 POC – Point of Control
📖 What Is Point of Control?
Point of Control (POC) is the price level attracting maximum trading volume over a defined period, forming a powerful support/resistance zone. This represents the most agreed-upon fair value.
⚙️ POC Settings
Line Color: Customize the POC line color
Line Style: Choose between solid, dashed, or dotted
Line Width: Adjust POC line thickness
Line Length: Set how far back POC calculation considers
Text Options: Show/hide "POC" label
🛠️ Practical Application
POC serves several trading purposes:
Support/resistance: Price often respects POC as it represents fair value
Mean reversion: Look for price returning to POC after deviating
Breakout confirmation: Sustained breaks of POC can signal strong trend moves
Volume trend analysis: POC movement can indicate shifting volume patterns
📐 Trendline Settings
Show/Hide Trendlines: Toggle visibility of all trendlines
Color Settings: Customize colors for up and down trendlines
Extend: Project trendlines into the future
Line Style: Choose between solid, dotted, or dashed
Line Width: Adjust thickness
Lookback: Set how far back to analyze for trendline detection
Show Broken Trendlines: Choose whether to display trendlines after they're broken
Show Signals: Get alerts on trendline breaks
🛠️ Practical Application
Trendlines offer valuable trading insights:
Trend validation: Multiple touches of a trendline confirm trend strength
Support/resistance: Use trendlines as dynamic support/resistance
Breakout trades: Enter when price breaks significant trendlines
Trend exhaustion: Watch for price failing to reach trendlines or multiple breaks
🟩🟥 Displacement Candles
Displacement is a substantial price movement occurring within a single candle, often signaling a dramatic shift in market sentiment. These high-volatility candles often mark significant turning points.
⚙️ Displacement Settings
Show Displacement Candles: Toggle visibility of highlighted displacement candles
Color Settings: Customize colors for bullish and bearish displacement
Type: Choose between highlighting full candle or candle body only
Strength: Adjust sensitivity (higher values show fewer, more significant displacements)
Structure Filter: Only show displacements that coincide with market structure events
🛠️ Practical Application
Displacement candles provide valuable signals:
Trend reversals: Large displacement against the trend may signal exhaustion
Momentum entries: Displacement in trend direction can offer momentum entry opportunities
Volatility awareness: Clusters of displacement candles indicate increased volatility
Stop-loss placement: Place stops beyond significant displacement candles
EQH (Equal Highs) & EQL (Equal Lows)
🟰 Equal Highs (EQH) and Equal Lows (EQL)
Equal Highs (EQH) and Equal Lows (EQL) are important price patterns that help traders identify potential market manipulation and reversal points. These patterns appear when price creates exactly matching highs or lows before changing direction.
🔑 Key Features
🔼 Equal Highs (EQH)
Definition: Two or more price candles with identical or nearly identical high points
Significance: Often indicates a "stop hunt" where price briefly breaks above resistance to trigger buy stops before reversing
Trading Signal: Potential short opportunity after the equal high is formed and price begins to decline
🔽 Equal Lows (EQL)
Definition: Two or more price candles with identical or nearly identical low points
Significance: Often indicates a "stop hunt" where price briefly breaks below support to trigger sell stops before reversing
Trading Signal: Potential long opportunity after the equal low is formed and price begins to climb
🧠 How to Use EQH & EQL Patterns
Identify the Pattern: Look for price making identical highs or lows, especially near previous significant support/resistance levels
Confirmation: Wait for a reversal candle following the equal high/low pattern
🎯 Entry Strategy
For EQH: Enter short when price breaks below the candle that formed the equal high
For EQL: Enter long when price breaks above the candle that formed the equal low
🛡️ Stop Placement
For EQH shorts: Place stop just above the equal high
For EQL longs: Place stop just below the equal low
📈 Risk Management
These patterns work best when traded with tight stops and clear invalidation levels
🚀 Advanced Tips
Look for EQH/EQL patterns that coincide with order blocks or key levels for higher probability trades
Multiple equal highs/lows in the same area create stronger signals
Pay attention to volume during these patterns – declining volume on the second high/low often confirms the pattern
The script automatically identifies these patterns, highlights them on your chart, and can alert you when new EQH or EQL patterns form, helping you spot potential reversal opportunities.
Last updated