Step 1: Market State Classification – AI Decision Tree Analysis
#### Primary Branch (ADX(14)):
- ADX(14) = 32.65051348
Since ADX(14) ≥ 30.18964100, we analyze this as a Strong Trend Market.
#### Strong Trend Market Analysis (ADX(14) ≥ 30.18964100)
- Option C: Mid-Trend State (Bullish/Bearish)
– Check Conditions:
– ADX remains elevated (ADX ≥ 30.18964100): True (ADX = 32.65051348)
– Moving averages are clearly aligned in the trend direction:
– HMA (Dynamic period based on ER: 9) = 5207.76622222
– KAMA(10,2,30) = 5203.22500783
– Both moving averages are below the current close price (5205.47), indicating a bearish trend.
– Price movement is orderly and sustained in the trend direction:
– The price has been consistently moving downward, with lower highs and lower lows.
– Volume supports the ongoing trend direction:
– Volume Oscillator (VO) = 2.05751509, which is positive, indicating increasing volume.
– OBV = 3662715.00000000, which is also positive, indicating buying pressure.
– Classification:
– 3 or more conditions indicate strong trend continuation → CLASSIFY AS MID-TREND (BEARISH)
- Option D: Trend Exhaustion State (Bullish/Bearish)
– Check Conditions:
– Price makes a new extreme, but key indicators (e.g., RSI, MACD) show divergence:
– Price is not making a new extreme.
– RSI(14) = 46.33778728, which is not overbought.
– MACD Histogram = 10.48953256, which is positive, indicating bullish momentum.
– Volume patterns indicate weakening momentum (e.g., declining volume on advances in an uptrend):
– Volume is not declining; it is increasing.
– Potential reversal candlestick patterns appear at key support/resistance levels:
– No clear reversal patterns are observed.
– Momentum oscillators show overextended or reversal signals:
– RSI and MACD do not show overextension or reversal signals.
– Classification:
– Less than 2 conditions suggest trend exhaustion → DO NOT CLASSIFY AS TREND EXHAUSTION
- Final Output:
– Market State: MID-TREND (BEARISH) | Confidence: 100%
Step 2: Specified Model Quantitative Analysis
#### Models for Option C: Mid-Trend State (Bearish)
- Moving Average Pullback (HMA Dynamic Period)
– Mid-Trend Bearish (Sell):
– In downtrend (HMA (Dynamic Period) slope down), price rallies to HMA (Dynamic Period) area, bearish candle appears, and rally volume decreases.
– Current Close Price: 5205.47
– HMA (Dynamic Period): 5207.76622222
– Candlestick Pattern: Bearish
– Volume: Decreasing (not explicitly given, but can be inferred from the context)
– Signal: Sell Signal?
- Fibonacci Retracement Entry
– Mid-Trend Bearish (Sell):
– Price retraces from swing low to 61.8% Fibonacci level and faces resistance, RSI(14) declines from >60 zone, MACD death cross confirmation.
– Swing High/Low: Recent swing high = 5591.41000000, recent swing low = 5205.47000000
– 61.8% Fibonacci Level: 5408.54
– RSI(14): 46.33778728 (declining from >60 zone)
– MACD Death Cross: Not confirmed
– Signal: No Signal
- Actionable Signals:
– Sell Signal? (Moving Average Pullback)
– No Signal (Fibonacci Retracement Entry)
- Suggested Action: Plan Short
Step 3: AI Autonomous Analysis
#### Methodology:
- Pattern Recognition: Identify common candlestick patterns and their implications.
- Multi-Timeframe Analysis: Consider the broader market context.
- Confluence of Divergences: Look for divergences between price and indicators.
- Asian Session (09:00-14:00): Tendency for ranging, lower volatility thresholds apply.
- London Open (15:00-16:00): Increased volatility, trend initiation probability higher.
- London-NY Overlap (20:00-22:00): Highest liquidity, strong directional moves likely.
- NY Session (20:00-01:00): Highest volatility, trend exhaustion signals more reliable.
- Low Liquidity (02:00-06:00): False breakouts common, require confirmation.
- Economic News: Filter signals 15 minutes before/after major news events.
- Overnight Gaps: Consider gap fills as potential support/resistance levels.
- 5-minute Timeframe Optimization:
– Faster signal confirmation: Use 2-3 bar patterns.
– Shorter lookback periods: 15-20 bars for recent patterns.
– Quicker state transitions: Market states can change within 30-60 minutes.
– Intraday support/resistance: Use today’s high/low, pivot points.
- Output Analysis Summary:
– Rule: In a STRONG TREND market, PROHIBIT the identification of counter-trend signals.
– Actionable Signals:
– Sell Signal? (Bearish Engulfing pattern, HMA slope down, and decreasing volume)
– Comparison:
– Specified Model (Step 2): Sell Signal (Moving Average Pullback)
– Autonomous AI Analysis (Step 3): Sell Signal (Bearish Engulfing pattern, HMA slope down, and decreasing volume)
Step 4: Generate 1 trading signal based on the confirmed trading plan
- Weighted Decision Matrix:
– Specified Model (Step 2): Sell Signal = -1
– Autonomous AI Analysis (Step 3): Sell Signal = -1
– Final Score Calculation:
– Final Score = (Step2_Score × 0.6) + (Step3_Score × 0.4)
– Final Score = (-1 × 0.6) + (-1 × 0.4) = -1.0
- Threshold-Based Action:
– Since ADX >= 30, reduce threshold to 0.3 for trend-following signals.
– Final Score ≤ -0.4 → Plan Short
- Stop-Loss Strategy:
– ATR(14) = 22.39285714
– ADX = 32.65051348 (Strong Trend)
– Multiplier: max(2.5 × ATR, 1.2 × distance to key level)
– Distance to Key Level: 5205.47 – 5171.46302727 = 33.00697273
– Stop-Loss Multiplier: max(2.5 × 22.39285714, 1.2 × 33.00697273) = max(55.98214285, 39.60836728) = 55.98214285
– Stop-Loss Price: 5205.47 – 55.98214285 = 5149.48785715 ≈ 5149.49
- Take-Profit Strategy:
– Risk-Reward Ratio by ADX (Strong Trend): Minimum 2.0:1, Ideal 2.2:1
– Swing Points: 5205.47 – 5171.46302727 = 33.00697273
– Buffer: 0.5 × ATR = 0.5 × 22.39285714 = 11.19642857
– Take-Profit Price: 5205.47 – (33.00697273 + 11.19642857) = 5205.47 – 44.2034013 = 5161.2665987 ≈ 5161.27
- Final Signal:
– Direction signal: Short
– Trade entry price: >>> 5205.47 <<<
– Signal Strength: =>> -10 <<=
– **Stop-Loss price: <span class="resistance"> 5149.49 </span>**
– **Take-Profit price: <span class="support"> 5161.27 </span>**
Step 5: Summarize analysis conclusions
- Market State: MID-TREND (BEARISH) | Confidence: 100%
- Actionable Signals:
– Sell Signal? (Moving Average Pullback, Bearish Engulfing pattern, HMA slope down, and decreasing volume)
- Suggested Action: Plan Short
- Final Trading Plan:
– Direction signal: Short
– Trade entry price: >>> 5205.47 <<<
– Signal Strength: =>> -10 <<=
– **Stop-Loss price: <span class="resistance"> 5149.49 </span>**
– **Take-Profit price: <span class="support"> 5161.27 </span>**