“Strong” (Green) = Strong Buy, high likelihood of bullish trend intact, look to get into a long position.
“Strong” (Red) = Strong Sell, high likelihood of bearish trend intact, look to get into a short position.
"Buy" = Possible trend reversal but not 100% confirmed until a Strong Buy. Take profit on short positions and wait for another strong signal to trigger. (Purple candles active)
"Sell" = Possible trend reversal but not confirmed until a Strong Sell. Take profit on long positions and wait for another strong signal to trigger. (Purple candles active).
Candle Coloring:
Green candles = Strong buy active.
Red candles = Strong sell active.
Purple candles = Consider taking profit, waiting for the next signal to trigger, or exercise caution in your current position.
Gray Candles = Indecision, an early entry is presenting itself or the trend is changing.
Note: You do not have to follow this exact terminology, if you see a sell signal and based on your analysis believe it is a good opportunity to enter short, go right ahead. If you just made life-changing money through a strong buy signal, it's probably best you don't wait for a sell signal to take profit. It's important to understand this is overall a tool and you can use it however you find it best. Our signals are not meant to be taken blindly.
The Lux Algo Signal input settings are described below:
Sensitivity - can be adjusted for reducing noise and decreasing or increasing the amount of signals per your chart. The higher the sensitivity the less signals appear. Best to adjust this first.
Agility - allows our algorithm to react more responsively to price movements - behaving like a subset of sensitivity. Best to adjust once Sensitivity is optimized.
Smoothing - increases/decreases the significance of more recent data so the newer candles will have more impact on the signals than older candles. Best to adjust once Sensitivity & Agility are optimized.
With all of our settings as listed above, users have a much greater ability to fine-tune their settings per each market and for different timeframes.
Default & suggested settings for Every Market = (4.25, 1.96, 20) - These settings have been decided by our team as the closest to a one-size fits all for every market but it is smart to adjust settings accordingly how you find them performing the best for your own trading style.
To adjust settings, do the following on your chart:
Although we provide suggested settings by default, there are no "best settings" that we can mention because trading is very personal per asset and timeframe. It is smart to adjust the settings per the assets & timeframes you trade. Let us know in Discord or at support@luxalgo.com if you have any questions!
The scanners are found in our Discord server and are only visible once you've signed up for Lux Algo V2.
We have thousands of Lux Algo V2 signals setup from every major market in the server so you don't have to go through the headache of setting up all the alerts yourself on TradingView directly.
You can also setup mobile push notifications in our Discord server for these alerts.
If you can't see these scanners in our Discord and you've already purchased, email support@luxalgo.com with your order number and Discord username and our team will grant you access immediately.
The Lux Dashboard is a toggle option within our Lux Algo V2 script which displays features from all of our Premium scripts in one place.
Lux Dashboard
The live dashboard appears next to the current price and displays the current signal, volume, trend, volatility, and a suggested stop-loss that changes as the market moves. (Trailing Stop).
Use Cases
The ideal use case of the dashboard is to have easy access to important data which allows you to immediately look for confluence across different aspects of our trading system.
For measuring volatility the dashboard will display a warning sign "⚠️" when volatility is above 75% which means the move is likely getting exhausted. It will also display the "⚠️" sign when the volatility is under 25% which indicates the market is likely entering a choppy zone and a big move is likely to occur in the near future.
"Trend" which is based on Lux Oscillator at Length 50 can help you know when to be cautious of signals. A buy signal can occur while the trend is still overall bearish and vice versa and this is another way to help you make better decisions when considering our signals.
The "Suggested Stop" is the price our algorithm suggests to place a stop-loss order (invalidation of a trade). This price adjusts in real time as the market moves whereas it can be used as a trailing stop loss order which helps you lock in profits as the trade goes in your favor. Read more about it here.
The dashboard can be toggled on & off at anytime by viewing the input settings on the Lux Algo V2 script.
Lux Oscillator comes complementary with your subscription to Lux Algo V2. It can also be found in your Invite-Only Scripts after purchasing.
How To Use Lux Oscillator
- Lux Oscillator uses crosses to detect trend reversals. A red fill indicates a bear trend whereas a blue fill suggests a bullish trend.
- This combines the earliness of a stochastic whilst using the accuracy of moving averages.
- You can increase the "Length" in the input settings if you wish to adjust to your required asset and timeframe.
- This value can be changed large amounts whilst not sacrificing accuracy or adding delays which is something we are very proud of.
To understand divergences as shown in the image above, use this cheat sheet.
Using Lux Oscillator in confluence with Lux Algo V2 signals
Spotting divergences with Lux Oscillator allows you to take some normal signals more seriously as potential trend reversals or opportunities for larger moves rather than just areas to take profit.
The oscillator overall provides users with more confluence and opportunities to spot reversals before they happen and our signals can be used as great directional confirmation with those plays.
Lux Volatility (LV) comes complementary with your subscription Lux Algo V2 and can also be found within your invite-only scripts.
Lux Volatility (LV)
This indicator measures the volatility levels of any given market from 0-100%. It's useful for spotting low volatility zones where it's likely smart to avoid trading and be aware that a big impulse move is likely in the near future.
Alongside our Lux Algo V2 signals, LV provides great confluence for when to fully trust an impulse move to occur as well as spotting extremes in the market where impulse moves are likely to end.
When volatility holds cleanly between the two zones 25% and 75% it is a good sign the trend has more room left to go and the move isn't finished just quite yet.
A great feature of Lux Volatility (LV) is that it has multi-timeframe capabilities.
For example, on the 4HR timeframe you could select the 1D volatility to appear rather than the current timeframe for a more macro picture of the market. In this scenario, this would have helped you avoid this extra choppy price range on the 4HR.
Conclusion
Volatility low = Market is in a sideways state and a bigger impulse move is likely beginning to form.
Volatility high = Current impulse move is likely beginning to get exhausted.
Volatility normal = The current move likely has more room to continue.
This isn't an oscillator to be used at all times, it's an additional tool which can help you avoid dangerous areas in the market where the best move is to either get out or consider switching to a different timeframe. Typically when volatility is very low on the higher timeframes, it's a good indication that the lower timeframes are going to perform better.
This is an additional feature which can be turned on in the settings of Lux Algo V2.
Using The Equalizer Band
Taking inspiration from Ichimoku with our own calculations, the Equalizer Band displays the presence of any market with more dynamic reversals and a precise representation of the market's equilibrium.
Rules & Techniques:
When enabled:
- If price holds above the band, market is considered bullish and strong buys (green candles) are able to activate.
- If price holds below the band, market is considered bearish and strong sells (red candles) are able to activate.
- If price holds inside the band, market is considered indecisive and gray candles activate. Depending on how price reacts to the band it could be either an early entry being presented or a trend shift in the market too.
- If equalizer band is actively twisting multiple times, market is considered ranging and violent moves can happen in either direction until price holds cleanly above / below the band or until it establishes support or resistance on it.
Example 1
Sell signals called for a move back to the equalizer band which proved to be a buying opportunity when it held as support. Confirmation was given with Strong Buy signals and especially when price held cleanly above the band which led to a 30% move up.
Example 2
A 40% price increase within 1-2 days led many people and indicators into getting bullish, however with our equalizer band and gray candles, it was nothing but a bearish retest.
This is a one of a kind market analysis system that measures the domination of either the bulls or bears in the market from 0-100% bullish / bearish.
Using this % value the user can deduce how active bulls or bears are in the market and hence will be able to understand which force is stronger in the current market. For example 30% bullish would indicate a bullish move is likely to be 1.3x more powerful than a bearish move and hence may be a more logical position to take rather than a short for example.
A low value e.g. 0-5% may suggest the market is in a balanced state, whereas a value upwards of 30% shows one side is more aggressively in control overall. When the value is very high such as 90%+ it is indicative of an overextension and a reversal is likely happening.
Without disclosing the exact way the algorithm works; Lux Market Control plots a series of microtrend lines. These microtrend lines if displayed would have little meaning to a user but have a deeper meaning for trend analysis and our code.
The way these trendlines are generated is private. Each of these trendlines is iteratively checked and analyzed against the current price, with decisions being made on how aggressive they are, how they relate to the current price and volume.
This brand new, unique approach to trend detection gives users the edge allowing the clear identification of market control or equilibrium phases.
You should know from our Signal Terminology that it's best to look for entries after Strong Buy or Strong Sell signals while normal signals are usually for taking profit or getting "flat" while waiting for a new Strong signal to appear.
Taking positions blindly or without any risk management is strongly discouraged with our system. Below is a simple strategy for increasing your probability of entering profitable trades and avoiding false signals.
We also have a new tool launched within our v2.7 update called "Trade Setup" - this is a toggle option you can find within the input settings of Lux Algo V2.
This displays the suggested Stop-Loss directly on your chart which is adjustable with the "SL ATR Multiplier" setting as well as 2 suggested Take Profit levels which are adjustable with the "R:R Ratio" setting.
These levels move with the price and are only there to give you ideas of levels you could set Stop-Loss or Take Profit orders when entering any trade you want at any time. They are not meant to be followed blindly.
Risk Management
Proper risk management plays a very important role for traders to be consistently profitable in the market. It's very important to take this seriously and apply it accordingly with or without our system.
Using a Stop Loss
A stop loss is your invalidation price of a trade. If price reaches a certain point, you would consider the trade invalid. Our Suggested Stop is useful to reference when entering trades and can help you find a level of invalidation for any trade.
Position Sizing
By rule of thumb, you should only risk 1-3% of your account size maximum with each trade you take. By following this strictly, you increase your odds of being consistently profitable in the market.
Lux overall if used with proper risk management is a reliable, unique, and profitable strategy that you can implement as your very own trading system or just as an additional tool in your technical analysis.
Auto Trend Lines & Linear Regression - How It Works
See the example below of our automatic trend lines & linear regression forecasting working in action:
Auto Trend Lines:
By activating this setting, Lux will automatically find and plot relevant trend lines based on significant pivot points in any market. By zooming out and viewing more data on the chart, more trend lines will appear.
This is a useful tool for finding perspectives and significant areas of support or resistance you may not have been able to see without our algorithm. (See example above)
Linear Regression Forecast:
Our Linear Regression line appears as a yellow dotted forecasting line that best fits the previous x data points. This gives the user a small insight into the possible average movements for the asset in the future.
We take the current linear regression line and forecast it into the future. This is directly enabled on any chart as a toggle option within our Lux Algo V2 script in TradingView.
- This is an approach to modeling the relationship between a scalar response (or dependent variable) and one or more explanatory variables (or independent variables). Linear regression attempts to plot a line of best fit through what appears to be noisy data, simplifying it for later analysis.
3 Step Process to Activate:
By clicking on settings and enabling "Trend Lines" and "Linear Regression Forecast" - you activate them directly on your chart. You can then select the Trend & Regression Age number of your preference to increase or decrease the amount of data on your chart.
Lux Algo V2 works on any market internationally including stocks, indicies, forex, futures and commodities on all timeframes including 1m, 5m, 30m, 1H, 4H, 1D, 1W, etc.
There is no "best timeframe" as it really all depends on the current market conditions, your trading style, and other factors. We generally recommend to try trading higher timeframes with Lux but many of our users optimize Lux for lower timeframes and find success.
We don't provide back-testing data or a specific % for it's accuracy since Lux was designed as a trading system with many different factors to consider with our signals.
No bot or human can have a 100% hit rate in the markets. Our signals are meant to help traders hold winning positions and find good areas to take profit.
Some use our signals just for directional confirmation & for checking their bias on the market, others strictly follow them and find success.
You don't need much experience to understand the signals provided by Lux.
However, trading can be difficult and can take time to learn regardless of our signals on your charts. If you're new to trading / technical analysis in general, we recommend paper-trading at first using our standard signals until you get more familiar with how it all works.
There is no magic bot that can immediately make you money on auto-pilot. Our signals can help you develop a directional bias on multiple timeframes and get you to take profit / wait out of trades which most other indicators can’t exactly communicate.
No, you are in full control of your trades. Lux was built to be used as a standalone trading system or just as an additional tool within your own technical analysis.
We have thousands of automated alerts scanning every market 24/7 within our Discord server so you don't have to setup many alerts.
If you wish to set up your own alerts on TradingView, click alerts on the right under your watchlist and make sure to use "Once per bar close".
When you set up an alert, click "Continue anyway" (Read more info below)
Our signals do NOT repaint, the reason this appears is due to the Lux Dashboard which is automatically removed from the previous candle & moved to the current candle which TradingView counts as repainting.
See the code below & watch our 24/7 live stream to see our non-repaint signals LIVE.
Our product works on TradingView(free web-based charting platform) and you can trade anywhere based on those charts, you won't be able to directly see Lux on MT4 or Thinkorswim charts.
You don't need to upgrade TradingView, our product works with 100% functionality on the basic plan of TradingView (free). You can sign up for free here.
Lux Algo V2 can work with normal candles, however, we recommend you to use Heikin Ashi candles to filter as much noise as possible with an improved ability to capture trends.
Although they are near the same, HA candles do not show the exact price by default. You can view the exact price of any ticker by applying the following setting:
To use Lux With Normal Candles enable our 'Use HA Source [Sensitivty Locked]' setting found within the input settings of Lux Algo V2. This toggle option was only designed to be used with standard candlesticks activated. Make sure if you are using Heikin Ashi candles that this is disabled.
The calculations for Heikin Ashi candles:
Open = (open of previous bar + close of previous bar)/2
Close = (open + high + low + close)/4
High = the maximum value from the high, open, or close of the current period
Low = the minimum value from the low, open, or close of the current period.
A signal is confirmed only once the candle is closed. Meaning a signal could appear on your chart but is not confirmed until that candle is closed and the next candle has started.
Our automated Discord bots will never notify you on any signal until the candle has closed and confirmed it. If you're adding alerts for Lux signals in TradingView - make sure to select "Once per bar close".
To prevent overfitting we test our algorithm across a massive range of assets and timeframes to ensure maximum and optimal performance. We also allow the user to tune the algorithm to their desired settings to prevent this.
TradingView supports real-time data for the majority of tickers you can find on the platform. Only a small portion of them (mostly futures contracts) require a small monthly fee to access real time data.
If you've already been given access to Lux Algo V2 after purchasing and you're seeing this alert, refresh your browser and make sure you're logged in on the TradingView profile you gave us.
If you have not signed up with us, you'll see this alert when trying to add our script to your chart. You can sign up here: https://luxalgo.com/products/lux-algo
You can cancel your subscription anytime by logging into your account on our site or by reaching out to support@luxalgo.com. Once your subscription has been cancelled, you will have access for the rest of your month or interval of the plan you purchased and you will not be charged again.
No, the price you signed up for is the price you will keep forever as long as you stay signed up. We will never change the price of your subscription. All members are grandfathered in to the price they first signed up at regardless of any price increases we do in the future.
After signing up, please allow us around 8 hours to grant you access to Lux Algo V2 on TradingView. It's a manual process by our team. Although, typically during the day, (EST) full access is granted much quicker and you'll receive a confirmation email with further instructions.
If you provided your Discord username during checkout (optional) you'll receive the VIP role at the same time. If you still need access to our VIP Discord alerts after signing up, send an email to support@luxalgo.com with your order number and Discord username and we'll take care of it as soon as possible.
Contact support
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