One of the key aims at VEMA Trader is to allow traders to automate as much of their trading as possible, freeing up their time to spend on the things most important to them while also reducing the psychological stressors of trading by having traders create setups while in a calm, rational headspace.

To facilitate this, we created unique entry conditions, allowing users to specify exactly what they want to see price do before their entry conditions are met and VEMA enters the trade.

This article aims to give a detailed description of each condition, as well as guide users on how and when to use them to their advantage.

 

Quick Links Guide:

Cross Strategy

• Expiry Date
• Operate On Candle Close
• Volume Increasing

 

Bounce Strategy

• Expiry Date
• Distance to Activate
• Distance to Confirm
• Operate On Candle Close
• Distance to Invalidate

 

Break and Retest Strategy

• Expiry Date
• Distance to Break
• Distance to Activate
• Distance to Confirm
• Operate On Candle Close
• Distance to Invalidate

 

Cross Strategy:

Expiry Date

By default, trigger trendlines have no expiry date.

So even though you may draw them to only encompass a certain period of time like so:

They will actually act as though you have the "extend left / right line" settings enabled on the trendline, meaning to VEMA they appear as:

To combat this, the expiry date condition can be used.

This enables you to pick a date and time in the future that you consider this setup to be invalid, and instruct VEMA to stop monitoring the setup at this time.

Here we can see the Expiry Date condition has been added to the trade setup panel on the left, and VEMA will now stop monitoring this trade at 4:30 PM on the 17th of February.

Note: By default all VEMA logic, including expiry dates, currently runs on UTC.

 

Operate on Candle Close

The "Stop Hunt Saviour" or "Avoid Wicks" condition. Operate on Candle Close is extremely useful for avoiding entering on wicks and fake-outs.

In this scenario, Operate on Candle Close was not enabled. This leads VEMA to enter the position as soon as Alpha is crossed, we can see price then pushed back above Alpha and went on small run, potentially leading to this trade being stopped out.

We can avoid that using the Operate on Candle Close feature.

Enabling it here would have caused VEMA to have ignore the wick, only entering after the small bounce upwards when price came back and closed below Alpha, which was followed shortly by a large drop.

 

Volume Increasing 

The Volume Increasing condition is designed to ensure an extra level of confirmation on your entries - reducing the chances of wicks and fake-outs. When price crosses and closes over your trigger, VEMA then checks volume on the crossing candle was higher than that of the previous candle and only enters if volume was increasing.

Note: Due to requiring the candle to close before Volume can accurately be gauged, the Volume Increasing condition automatically enforces the Candle Close condition.

In the event price crosses and closes over your trigger, but volume is not increasing (as in the screenshot below), the setup will be invalidated and VEMA will not enter.

Bounce Strategy:

Cheat Sheet:

The order that VEMA's Bounce strategy conditions must be met is:

1. Expiry date 

2. Distance to Activate (Avoid getting frontrun)

3. Distance to Confirm (Confirm Rejection)

4. Operate on Candle Close (Stop Hunt Saviour / Avoid Wicks)

Expiry Date

By default, trigger trendlines have no expiry date.

So even though you may draw them to only encompass a certain period of time like this:


They will actually act as though you have the "extend left / right line" settings enabled on the trendline, meaning to VEMA they appear as:

To combat this, the Expiry Date condition can be used. This enables you to pick a date and time in the future that you consider this setup to be invalid, and instruct VEMA to stop monitoring the setup at this time.

Here we can see the Expiry Date condition has been added to the trade setup panel on the left, and VEMA will now stop monitoring this trade at midnight on the 27th of February.

Note: By default all VEMA logic, including expiry dates, currently runs in UTC. 

 

Distance to Activate

We like to think of Distance to Activate as the "Avoid getting front-run" condition. It essentially gives you a buffer zone on your trigger trendline, so that if price gets within the percentage you specify, VEMA will see this condition as being met.

In this scenario, Distance to Activate is set to 0%. For the entry conditions of this trade to be met, price would have to touch the Alpha trigger trendline.

This trade was again set up with no Distance to Activate. Unfortunately, price came close to the Alpha trendline, but was front-run and began to bounce before crossing Alpha, leading to a missed entry.

To remedy this, we could have used a Distance to Activate of 1.3%. This gives a buffer zone, meaning price doesn't need to hit our trendline exactly, but just needs to come "close enough" (within 1.3% of Alpha) for VEMA to enter, leading to fewer missed trades.

 

Distance to Confirm

Distance to Confirm is the "rejection confirmed" condition. It allows you to set a percentage that price must reach after bouncing from your Trigger trendline or Distance to Activate zone.

Similar to our earlier example, this trade would have entered when price hit the trendline, as the Distance to Confirm is set to zero, meaning no rejection is needed to satisfy the entry conditions.

Here VEMA would have waited until price touched alpha (0% distance to activate) then bounced our 2.2% Distance to Confirm before entering.

 

Operate on Candle Close

Operate on Candle Close is the "Don't get caught out by wicks" condition. It ensures VEMA will only enter a position if all other entry conditions are met when a candle closes.

Without the Distance to Activate or Confirm conditions set, a bounce with Operate on Candle Close will only enter a trade when the trendline is touched, and that candle close agrees with your direction - either a close above the trigger for longs, or below the trigger for shorts.

This is useful to avoid getting caught by big moves through levels.


In this scenario, we were looking for a long off the Alpha trendline. Because we used the Operate on Candle Close condition, VEMA would not have entered the trade due to price being below Alpha at the close. If price had bounced off Alpha and closed above, VEMA would have taken this position.

 

Distance to Invalidate

Distance to invalidate prevents trades from staying monitoring indefinitely when your trade setup has been invalidated.

It allows you to set a distance from your trigger in the opposite direction to your predicted price movement, that if price reaches (wick or close) VEMA will cancel the setup.

Here we can see this trade setup would be invalidated if price came 3% below Alpha, as it would confirm price is going against our setup (not bouncing from Alpha) and satisfy our distance to invalidate condition.

Note: Distance to Invalidate requires the Candle Close or Distance to Confirm condition to function properly, as without these the position will always have entered before price reaches your Distance to Invalidate level.

Combining these conditions:

Distance to activate & Operate on Candle Close

A trade setup with these conditions needs to move within the Distance to Activate zone, then close above the trigger for a long (below for short positions) before entering.

Distance to Confirm & Operate on Candle Close

A trade with these conditions must touch the trigger trendline, then reject beyond the Distance to Confirm percentage and close there.

Distance to Activate & Distance to Confirm

These conditions mean price must move into the Distance to Activate zone, then reject beyond the Distance to Confirm percentage before VEMA will enter. 

The whole kit and kaboodle



And here, we can see all four conditions at work. Price was within our expiry date, so VEMA was still monitoring this setup. Price then entered our Distance to Activate zone, rejected outside our Distance to Confirm, but did not close above on that candle. Due to not all entry conditions being satisfied, VEMA waited, and two candles later the close above Distance to Confirm came, all of our entry conditions were met and VEMA would have taken this position for us.

 

Troubleshooting:

Distance to Activate larger than Distance to Confirm

A Distance to Activate larger than Distance to Confirm will render your Distance to Confirm condition useless unless the Operate on Candle Close condition is also used.

This is due to your distance to both conditions being satisfied as soon as price enters your Distance to Activate zone.

With Operate on Candle Close enabled, it essentially just moves your trigger trendline to the Distance to Confirm percentage, as price needs to come into the activation zone, then close above the Distance to Confirm zone. This would behave identically to the same trade with no Distance to Confirm condition enabled but the trendline placed closer to the Distance to Activate.

Break and Retest Strategy:

Cheat Sheet:

The order that VEMA Break and Retest conditions must be met for entry is:

1. Expiry date 

2. Distance to Break

3. Distance to Activate

4. Distance to Confirm

5. Operate on Candle Close

Conditions:

Expiry Date

By default, trigger trendlines have no expiry date.

So even though you may draw them to only encompass a certain period of time like this:

They will actually act as though you have the "extend left / right line" settings enabled on the trendline, meaning to VEMA they appear as:

To combat this, the Expiry Date condition can be used. This enables you to pick a date and time in the future that you consider this setup to be invalid, and instruct VEMA to stop monitoring the setup at this time.

Here we can see the Expiry Date condition has been added to the trade setup panel on the left, and VEMA will now stop monitoring this trade at noon on the 12th of June.

Note: By default all VEMA logic, including expiry dates, currently runs in UTC. 

 

Distance to Break

Distance to break allows you to define what exactly constitutes a break. It is a measure of how far from the trigger price must close before you would classify it as a break of the desired level.

In this scenario, Distance to Break is set to 4%. For the entry conditions of this trade to be met, price must close more than 4% above Alpha, then come back to satisfy the remaining "retest" conditions (explained below).

 

Distance to Activate

We like to think of Distance to Activate as the "Avoid getting front-run" condition. It essentially gives you a buffer zone on your trigger trendline, so that if price gets within the percentage you specify, VEMA will see this condition as being met.

In this scenario, Distance to Activate is set to 0%. For the entry conditions of this trade to be met, price would have to close above the white line (4% Distance to Break) then come back and touch the Alpha trigger trendline.

This trade was again set up with no Distance to Activate. Unfortunately, price broke, came back close to the Alpha trendline, but was front-run and began to bounce before hitting Alpha, leading to a missed entry.

To remedy this, we could have used a Distance to Activate of 1.5%. This gives a buffer zone, meaning price doesn't need to hit our trendline exactly, but just needs to come "close enough" (within 1.5% of Alpha) for VEMA to enter, leading to fewer missed trades.

 

Distance to Confirm

Distance to Confirm is the "Rejection confirmed" condition. It allows you to set a percentage that price must reach after bouncing from your Trigger trendline or Distance to Activate zone.

Similar to our earlier example, this trade would have entered when price hit the trendline, as the Distance to Confirm is set to zero, meaning no rejection is needed to satisfy the entry conditions.

Here VEMA would have waited until price touched alpha (0% distance to activate) then bounced our 2% Distance to Confirm before entering.

Here Distance to Confirm would have saved you from a losing trade, as VEMA never entered due to price not bouncing enough to confirm the retest and satisfy the condition.

 

Operate on Candle Close

Operate on Candle Close is the "Don't get caught out by wicks" condition. It ensures VEMA will only enter a position if all entry conditions have been previously been satisfied and the Distance to Confirm condition is still met when a candle closes.

In this scenario, we were looking for a Break and Retest off the Alpha trendline. Because we used the Operate on Candle Close condition, VEMA would  have entered the trade on the candle following price closing above the 0.45% distance to confirm. 



In this scenario, we were looking for a Break and Retest off the Alpha trendline. Because we used the Operate on Candle Close condition, VEMA would not have entered the trade due to price never closing above the 0.3% distance to confirm & preventing us from getting into a losing trade.

 

Distance to Invalidate

Distance to invalidate prevents trades from staying monitoring indefinitely when your trade setup has been invalidated.

It allows you to set a distance from your trigger in the opposite direction to your predicted price movement, that if price reaches (wick or close) then VEMA will cancel the setup.

It's important to note Distance to Invalidate will only begin monitoring after the Distance to Break Condition has been satisfied.

Here we can see this trade setup would be invalidated if price closed 4% above Alpha, then came back and moved 4.5% below. 

Here price is currently further than 4% below Alpha. This does not satisfy the Distance to Invalidate condition, as Distance to Break must be satisfied first (otherwise many Break and retests would invalidate before ever getting started).

 

Note: Distance to Invalidate requires the Candle Close or Distance to Confirm condition to function properly, as without these the position will always have entered before price reaches your Distance to Invalidate level.

Conclusion:

These entry conditions allow you to free up your time by automating much more of your entry then traditional exchange trading allows for. 

While they may take some getting used to at first, many early users of VEMA have raved about the time and energy saved by using these conditions to reduce the need to rely on alerts and monitor charts. We hope this guide will help allow you to reap those same rewards!

Got a suggestion for other entry conditions you'd like to see? 

Submit them here:

VEMA Trader Feature Request Forum

The features most voted by users will be prioritised as the next additions to VEMA.