Tag Archive for: Confluence

The two filters in the STRATEGY indicator – what’s the difference?

The STRATEGY indicator has two filters that both use EMAs to keep you trading with the trend, but they behave nothing alike. They serve very different purposes. That’s the part worth getting straight, because the shared “EMA” name does most of the confusing.

One checks where a Stage in the STRATEGY Sequence sits against a single moving average line. The other reads the broader, higher-timeframe trend from two moving averages and only reveals setups that align with the overall EMA direction. Both use EMAs as a building block, but they do completely different jobs.

Here’s what each one does, and when to reach for it.

(EMA is short for exponential moving average. It’s a line that follows price but gives more weight to recent candles, so it reacts faster than a plain average.)

LTF and HTF EMA’s working together

The EMA Filter: one level against one line

The EMA Filter asks a simple question. Where does a specific price level sit relative to a single EMA? If it’s on the wrong side, the setup gets thrown out.

You pick two things. A period (default 50) and a timeframe (default is whatever your chart is on). Then the Apply At setting decides which price level it checks, and at what point in the setup’s life:

  • Sequence Creation: the Step 1 break level, when the sequence first forms.
  • Liquidity: the Step 4 level, when liquidity confirms.
  • Sequence Completion: the Step 5 sweep level, after the sweep.
  • Flip Creation: the flip entry level, the moment the flip triggers.

For a bullish setup, that level has to be above the EMA. For a bearish one, below it.

Say you set Apply At to Flip Creation with the 50 EMA. You’re telling the indicator: only let me into a bullish trade if the flip pivot is above the 50 EMA at the moment it triggers. If it’s below, the setup gets discarded and labelled “EMA” on your chart, so you can see what it removed.

Two things people get wrong here.

First, it’s a one-time snapshot, not a running check. It looks once, at the stage you picked, and that’s it. If the setup passes and price later crosses back over the EMA, the setup stays valid. The filter has already done its job.

Second, “TF = Chart” does not mean the daily 50 EMA. It means whatever timeframe you’re looking at. On a 3 minute chart, it’s the 3 minute 50 EMA. If you want the daily as your reference, set the timeframe to D yourself.

One practical note to close this out. Flip Creation is the strictest option, because it checks right at entry. Sequence Creation is the loosest, because it checks early, before the setup has matured. That’s the trade-off. Filter harder and you cut more setups, including some that would have worked anyway.

The HTF Bias Filter: which way the bigger trend leans

This one works differently. Instead of one price level against one EMA, it looks at two EMAs on a higher timeframe and only allows setups in the direction those two are pointing.

You pick a higher timeframe (I suggest 15 min), a fast EMA (default 50) and a slow EMA (default 100). The rule is plain. Fast above slow means the higher-timeframe bias is bullish, so only bullish setups are allowed. Fast below slow means it’s bearish, so only bearish setups are allowed.

With the defaults, the indicator only reveals bull setups when the daily 50 EMA sits above the daily 100 EMA. If the 50 is below the 100, no bull setups appear on your chart at all. Not even the clean ones. Every other condition can line up and you’ll still see nothing.

There’s no Apply At option here, and that’s on purpose. The higher-timeframe cross is a regime check. It’s about the broader trend, which only matters when a setup first forms. Once a sequence has cleared that gate, the bias can shift later without touching the trade.

The EMA pair is a dial you can turn. Tighter pairs like 20/50 flip bias more often, so more setups but more whipsaws. Wider pairs like 100/300 are steadier, fewer setups but cleaner trend regimes.

Same tool, two different questions

If you only remember one thing, make it this. The EMA Filter compares a price level to one EMA. The HTF Bias Filter compares two EMAs to each other. One judges where your entry sits. The other judges what kind of trend you’re in.

EMA Filter HTF Bias Filter
What it compares A price level vs one EMA Two EMAs against each other
Timeframe Chart or HTF (your choice) Always HTF
When checked Step 1, 4, 5 or Flip (your choice) Always at sequence creation
Rejected setups Visible, labelled “EMA” Never appear at all
Best for Filtering setups by entry location Filtering by broader trend regime

That difference in purpose is the thing to hold on to. One is a precision tool for a single setup. The other is a broad gate for the whole session. They answer different questions, so they’re not really alternatives. They’re a pair.

Can you run both at once?

Yes, and they pair well. The HTF Bias Filter gives you the broad regime, the kind of trend you’re trading inside. The EMA Filter then refines individual setups within that trend, checking where the entry sits against a closer moving average.

Turn both on and the filters stack. A setup has to clear the higher-timeframe regime check and the price-level check before it earns a place on your chart. Stricter, fewer setups, but every one that survives has passed both questions.

Which is the point of a filter in the first place. It isn’t there to give you more trades. It’s there to quietly remove the ones that don’t fit, before you ever have to decide.

Trade well. Stay ordinary.

What an A+ Setup Looks Like on the Indicator

Silver futures, just after 10am London time. The 1-minute chart had been grinding lower into the session. Bearish bias was there on the higher timeframes, and the indicator was painting a five-point sequence I’ve now seen play out enough times to know what to look for.

The trade ran 1.58R with effectively zero drawdown.

But the result isn’t the point. The setup is. Most sequences that print on the indicator are fine. They work often enough. The A+ ones look different, and once you’ve watched a few play out, you stop being willing to risk real money on the average ones.

Here’s what made this one A+, walking through it in roughly the order it printed.

The geometry has to make sense first

Before anything else, I’m looking at the distance between Step 3 and Step 5.

Step 3 is the swing low we want to see break out of the zone. Step 5 is the deeper swing low that completes the bearish structure, the furthest point from the zone before price heads back toward our liquidity at Step 4. A short distance between (3) and (5) means the pullback is shallow and the R:R gets compressed before you’ve even started.

This trade had room. Step 5 sat a meaningful distance below Step 3, which meant any pullback back up into Step 4 had to be substantial. A substantial pullback means a deeper entry, a tighter stop relative to the target, and a setup that’s worth taking risk on. If the geometry’s wrong, nothing else on the chart matters.

The depth of the Step 4 tap

The second filter is how price interacts with the Step 4 zone.

What I want to see is a clean sweep of (4) and an immediate rejection, not a deep mitigation well beyond (4). On this trade, price came back into the zone, wicked (4), and turned. That’s the indicator’s job, to observe, track and display these sequences as they play out, and it did it.

What made it A+ rather than just acceptable was what other confluences we could observe around that tap. The rejection came off a bearish fair value gap (FVG), an unfilled imbalance left by an earlier full-bodied bearish candle. So it wasn’t just price sweeping the liquidity at (4) and turning. It was price sweeping liquidity, hitting fresh bearish imbalance from a candle that had real intent behind it, and refusing to push through.

That’s not a coincidence. That’s sellers showing up exactly where you’d expect them to.

The Flip and what sits around it

The Flip is my entry trigger, the moment the indicator confirms a structural break in the direction of the original bias. On its own, it’s a signal. With the right context around it, it’s a different category of signal.

What I want to see around The Flip

Two things gave this one extra weight.

First, fresh bearish FVGs started forming right after The Flip. Multiple of them. That tells me the move down isn’t a one-candle reaction, it’s a sequence with momentum behind it. Each new FVG is an unfilled gap, and unfilled gaps are evidence that price is moving with intent rather than chopping.

Second, The Flip printed below both the 50 and 100 EMA. This one’s a hard filter for me in bearish setups, and I’ve built it directly into the indicator. If The Flip is above the 50 EMA, I’m probably looking at a counter-trend reversal, and counter-trend trades are a different beast. Below the 50 EMA, in an already bearish higher-timeframe context, means I’m taking continuation in the direction of the trend. The old adage holds up here, the trend is your friend, and on this setup everything was pointing the same way.

Execution becomes easy when the setup is right

Here’s the part I want to be honest about. When the setup is genuinely A+, execution stops being the hard part.

On this trade, I set my entry exactly on the flip line. There was zero drawdown. Not “almost zero,” literally none, because price had already committed to the move before The Flip printed, and the entry sat at the boundary of that commitment.

When price pushed close to 1R, I moved my stop to break even. That’s the rule, and it didn’t require any negotiation with myself. Target was Step 5, same as always.

After a minor pullback (the kind that always shows up and always feels worse than it is), price continued down. Two more fresh bearish FVGs formed on the way. TP hit cleanly.

The trade took care of itself, because everything that needed to be true at entry was already true.

A+ setups are filters, not formulas

The reason I keep using the phrase A+ instead of just “valid” is that the indicator will give you valid signals all day long. A large percentage of them will work. The job isn’t to take all of them.

The job is to wait for the ones where the geometry, the conditions of the sweep, the quality of the rejection, the freshness of the imbalance, and the EMA position all line up the same way.

You won’t get many of these every session, sometimes only 1 or 2 a week.

That’s fine. The discipline is in the waiting, not the trading.