Step 1: Market State Classification – AI Decision Tree Analysis
#### Primary Branch (ADX(14)):
- ADX(14) = 24.86320659
Since ( 24.04055437 leq text{ADX(14)} < 32.04055437 ), we analyze the market as a Weak Trend Market.
#### Weak Trend Market Analysis (24.04055437 ≤ ADX < 32.04055437)
- Option B: Trend Initiation State (Bullish/Bearish)
Check Conditions:
- Clear breakout above (bullish) or below (bearish) a key resistance or support level:
– Below 20-period Low: True
– Above 20-period High: False
– Magnitude of Breakout: 0.76%
- Volume expansion confirms the breakout:
– Volume Spike (>1.5x average): False
– Volume Ratio: 0.96
- ADX begins to rise from low levels:
– ADX(14) = 24.86320659 (This is not particularly low, but it is within the weak trend range)
- Price maintains direction in the breakout’s favor for multiple bars:
– The price has been moving lower, and the current close is below the 20-period low.
Classification:
- Conditions Met:
– Clear breakout below a key support level: 1
– Price maintains direction in the breakout’s favor: 1
– Volume confirmation: 0 (no significant volume spike)
– ADX rising from low levels: 1 (within the weak trend range)
Since 3 out of 4 conditions are met, we classify the market as Trend Initiation (Bearish).
Final Output:
- Market State: Trend Initiation (Bearish) | Confidence: 75%
Step 2: Specified Model Quantitative Analysis
#### Models for Option B: Trend Initiation State (Bullish/Bearish)
- Volatility Squeeze Breakout
– Prerequisite: BB Width < Dynamic Bandwidth Threshold
– BB Bandwidth = 0.01643014 (Dynamic Bandwidth = 0.02237668)
– Condition Met: True
– Trend Initiation Bearish (Sell): Close 1.0 AND Breakout Confirmation
– Close = 5354.81000000
– KC Lower = 5346.73303371
– Breakout Filter = 76.76142857
– VO = 0.78218589
– Condition Met: False (Close is not below KC Lower – Breakout Filter, and VO is not > 1.0)
- Volume – Price Breakout of Previous High / Low
– Trend Initiation Bearish (Sell): Close 0.1%
– Close = 5354.81000000
– Previous 20-period Low = 5344.64000000
– Increased Volume: False
– Breakout Magnitude = 0.76%
– Condition Met: False (No increased volume)
- DMI Momentum Crossover Start
– Prerequisite: 24.04055437 ≤ ADX(14) < 32.04055437
– Condition Met: True
– Trend Initiation Bearish (Sell): -DI(14) crosses above + DI(14)(Death Cross)
– +DI(14) = 18.98382447
– -DI(14) = 16.57949407
– Condition Met: False (No death cross)
Actionable Signals:
- Sell Signal: None
Default Output:
- Maintain Watch
Step 3: AI Autonomous Analysis
#### Methodology:
- Pattern Recognition: Identify candlestick patterns and their implications.
- Multi-timeframe Analysis: Consider the broader context from higher timeframes.
- Confluence of Divergences: Look for divergences between price and indicators.
#### XAUUSD 5-min Specific Considerations:
- Current Session: Asian Session (09:00-14:00)
- Volatility: Lower volatility thresholds apply.
- Economic News: No major news events within the last 15 minutes.
#### Analysis:
- Candlestick Patterns:
– Bearish Engulfing Pattern: Not present.
– Doji or Spinning Top: Not present.
– Bearish Pin Bar: Not present.
- Indicators:
– RSI(14) = 41.64100731: Below 50, indicating bearish momentum.
– MACD Histogram = -4.33377140: Below zero, indicating bearish momentum.
– Stochastic Oscillator (%K = 43.49440563, %D = 41.62776561): Below 50, indicating bearish momentum.
– CCI(14) = -47.41159480: Below -50, indicating bearish momentum.
- Support/Resistance:
– Pivot Points:
– S1 = 5249.30666667
– S2 = 5189.12333333
– S3 = 5028.40333333
– Key Levels:
– Recent Swing Low: 5344.64000000
– Recent Swing High: 5409.35000000
- Volume:
– OBV = 3666496.00000000: No significant increase in volume.
– MFI(14) = 37.67052025: Below 50, indicating bearish momentum.
High-Confidence Trading Signals:
- Bearish Momentum: RSI, MACD, Stochastic, and CCI all indicate bearish momentum.
- Price Action: Price is below the 20-period low, indicating a potential bearish trend initiation.
Comparison with Step 2:
- Step 2: No clear sell signals from the specified models.
- Autonomous Analysis: Strong bearish momentum and price action suggest a bearish trend initiation.
Step 4: Generate 1 trading signal based on the confirmed trading plan
#### Weighted Decision Matrix:
- Specified Model (Step 2): 0 (Maintain Watch)
- Autonomous AI Analysis (Step 3): -1 (Bearish)
- Final Score Calculation:
– Final Score = (Step2_Score × 0.6) + (Step3_Score × 0.4)
– Final Score = (0 × 0.6) + (-1 × 0.4) = -0.4
- Threshold-Based Action:
– Plan Short: Final Score ≤ -0.4
Stop-Loss Strategy:
- ADX = 24.86320659 (Normal Ranging)
- ATR = 25.58714286
- Time Factor (Asian Session): 1.1
- Volatility Factor (Normal Volatility): 1.0
- Base Multiplier: 3.0 × ATR = 76.76142857
- Adjusted Stop-Loss: 76.76142857 × 1.1 × 1.0 = 84.43757143
Take-Profit Strategy:
- Risk-Reward Ratio (Normal Ranging): Minimum 1.3:1, Ideal 2.0:1
- Swing Point (Recent Low): 5344.64000000
- Buffer: 0.5 × ATR = 12.79357143
- Take-Profit: 5344.64000000 – 12.79357143 = 5331.84642857
The Final Signal:
- Direction signal: Short
- Trade entry price: >>> 5354.81 <<<
- Signal Strength: =>> -1 <<=
- Stop-Loss price: ->> 5439.24 <<-
- Take-Profit price: +>> 5331.85 <<+
Step 5: Summarize analysis conclusions
- Market State: Trend Initiation (Bearish) | Confidence: 75%
- Specified Model Analysis: No clear sell signals.
- Autonomous AI Analysis: Strong bearish momentum and price action suggest a bearish trend initiation.
- Final Trading Plan: Plan Short
– Entry Price: 5354.81
– Stop-Loss: 5439.24
– Take-Profit: 5331.85
The market is showing signs of a bearish trend initiation, and the autonomous analysis confirms this with strong bearish momentum. The final trading plan is to go short with a stop-loss and take-profit based on the calculated risk-reward ratio.