The 5-Minute Buy/Sell Signal Indicator is a powerful tool designed for scalpers and day traders who rely on quick, actionable signals to capitalize on short-term market movements. This indicator synthesizes multiple technical analysis components—MACD, RSI, EMA, and volume—to generate high-probability trading opportunities on 5-minute charts.
How the Indicator Works
Core Technical Components
MACD (Moving Average Convergence Divergence)
- Calculates momentum by comparing 12-period and 26-period exponential moving averages (EMAs).
- Buy Condition: Positive MACD histogram (bullish momentum).
- Sell Condition: Negative MACD histogram (bearish momentum).
RSI (Relative Strength Index)
- Identifies overbought/oversold levels (30/70 thresholds).
- Buy Trigger: RSI < 30 (oversold).
- Sell Trigger: RSI > 70 (overbought).
50-Period EMA (Exponential Moving Average)
Acts as a trend filter:
- Price above EMA = Uptrend (validates buy signals).
- Price below EMA = Downtrend (validates sell signals).
Volume Confirmation
- Signals are only valid if current volume exceeds the 20-period average, ensuring stronger market participation.
Signal Generation Logic
- Buy Signal:
✅ MACD histogram positive.
✅ RSI below 30.
✅ Price above 50-period EMA.
✅ Volume > 20-period average.
👉 Visual Cue: Green "BUY" label beneath the candlestick. - Sell Signal:
✅ MACD histogram negative.
✅ RSI above 70.
✅ Price below 50-period EMA.
✅ Volume > 20-period average.
👉 Visual Cue: Red "SELL" label above the candlestick.
Key Features of Version 1.0
- Streamlined Interface: Removes MACD/RSI plots to reduce chart clutter while retaining calculations.
- Enhanced Accuracy: Multi-layered confirmation (trend, momentum, volume) minimizes false signals.
- Custom Alerts: Set notifications for real-time buy/sell triggers.
Optimal Usage
- Designed exclusively for 5-minute charts.
- Ideal for scalping and intraday strategies.
- Combines trend-following and mean-reversion principles.
FAQs
How reliable are the signals?
Signals are validated by four technical filters (MACD, RSI, EMA, volume), significantly improving accuracy compared to single-indicator systems.
Can I use this for longer timeframes?
While optimized for 5-minute charts, traders may adapt the logic to 15-minute or hourly frames by adjusting EMA/RSI parameters.
Does volume really matter?
Yes. Volume confirms institutional participation, reducing the risk of "fakeouts."
👉 Explore advanced trading strategies to maximize this indicator’s potential.
Why was the MACD/RSI plot removed?
To prioritize clarity. The calculations still run in the background, and signals appear only when all conditions align.
This open-source tool adheres to TradingView’s House Rules. Always practice risk management—no indicator guarantees 100% accuracy.
👉 Learn more about algorithmic trading to refine your short-term edge.