ValorAlgo User Guide

1. Settings Inputs At the start of the ValorAlgo script, you will find a variety of settings and parameters that you can adjust. These include options such as enabling or disabling certain features, adjusting indicator values or changing colors to fit your preferences. This flexibility allows you to customize ValorAlgo to best suit your trading style.

2. Impulse System The Impulse System is based on the work of Dr. Alexander Elder. It aims to identify significant momentum behind price movements to highlight possible trading opportunities. By using a combination of a momentum indicator and a trend-following indicator, it colors bars to represent the direction of the trend and the strength of momentum.

3. Tom Demark (TD) Setup ValorAlgo uses the TD Sequential system by Tom Demark to predict potential price reversals. The TD Setup component identifies a series of nine consecutive bars where the close price is consistently higher (for a buy setup) or lower (for a sell setup) than the close four bars earlier. Completion of this setup may suggest a potential price reversal.

4. Breakout Detection This part of ValorAlgo identifies price breakouts, moments when the price moves significantly beyond a resistance or support level. When a breakout is detected, a line will be drawn on the chart to indicate the breakout level. Keep in mind that breakouts can be false, so it's essential to use other indicators and strategies to confirm the breakout before taking action.

5. Fair Value Gap (FVG) The FVG feature attempts to identify areas where the price has deviated significantly from its 'fair value'. This is determined by an imbalance between the high and low prices within a specified period. ValorAlgo represents these areas as boxes on the chart.

6. Bull / Bear Candles ValorAlgo also identifies potential bullish and bearish candles. These are moments where the current closing price is significantly higher or lower than the opening price, possibly indicating the start of a new trend. It’s recommended to use these signals in conjunction with other indicators or strategies for increased reliability.

7. Reversal Seeker The Reversal Seeker employs a combination of the RSI (Relative Strength Index) and Bollinger Bands indicators to find potential price reversals. When a bullish or bearish reversal is detected, it is marked on the chart and an alert condition is created. Similar to other features, these signals should be confirmed with other indicators or strategies before trading.

Alerts ValorAlgo has several built-in alerts, including for the completion of a TD Setup, a detected breakout, a Bull/Bear candle or a potential reversal. You can customize these alerts to notify you via TradingView when these conditions are met.

It's essential to understand that the ValorAlgo script is a tool to assist with trading decisions. It's not meant to guarantee profits or prevent losses. Like any trading tool, its effectiveness will depend on the broader context, the specific asset you're trading and the time frame. Therefore, it's crucial to use ValorAlgo as part of a broader, well-researched trading strategy.