Digit Mony
Learn about an AI-powered trading strategy that uses free indicators available on TradingView to generate accurate trade entry signals. The strategy uses the k-Nearest Neighbors machine learning algorithm and the Smart Money concept to make informed trading decisions based on historical data. With examples on lower timeframes, the video explains how to set up and fine-tune the indicators for optimal results.
Introduction to AI and Smart Money Indicators
Trading with AI powered indicators has become increasingly popular in recent times, driving improvements in different sectors, especially in financial trading. The smart money concept helps traders to make informed decisions before placing trades, allowing them to trade with the big banks that commit millions or billions into the financial market. In this article, we will be focusing on two indicators, the Machine Learning Indicator and the Smart Money Indicator, and how they can help generate accurate trade entry signals.
Setting up the Machine Learning Indicator
To get started, traders need to go to tradingview.com, open to the price of New Zealand dollar with U.S dollar currency pair, and set the timeframe to one hour. The Machine Learning Indicator is a free tool on TradingView, and you can add it to your chart by clicking on the “Indicators” tab, searching for Machine Learning, and selecting the k n based strategy by capissimo. To set up the indicator, click on the gear icon, and change the short period to 21, the long period to 14, the base number of neighbors to 150, and check the volatility filter. The k n algorithm uses historic data to find the number of nearest neighbors of the current indicator values and forecast the future direction.
Using the Machine Learning Indicator
The Machine Learning Indicator produces buy and sell signals, providing the best possible trend direction prediction. Once a buy signal appears on your chart, you will need to wait for some price consolidation before entering a long trade at the close of this candle, setting your stop loss at the low and targeting a risk to reward ratio of 2:1. The Machine Learning Indicator works best in lower timeframes, and traders can adjust the settings to suit their trading style.
Getting started with the Smart Money Indicator
The Smart Money Indicator is an advanced smart money concept indicator on TradingView that helps traders to simplify and make smart money concept trading strategies more simple and easy. To add the indicator to your chart, go to the indicators tab, search for Lux Algo, and select the Smart Money Concept Indicator created by lexalgo.
How the Smart Money Indicator Works
The Smart Money Indicator helps traders to identify and accurately draw bearish and bullish break of structures, change of characters, and order blocks. Traders can set up the indicator to filter out smaller market moves, show swings points, and check other settings to fine-tune it according to their trading strategy. When the price is trending down with a heavy momentum creating order flows through a bearish break of structures, traders can use the Smart Money Indicator to identify liquidity resting in the order block and target it for a possible bullish trend. Traders can then set their stop loss below the internal order block and extend their profit target to the high to achieve a risk to reward ratio of six to one.
Using the Smart Money Indicator for Trading
The Smart Money Indicator can produce accurate buy and sell signals that traders can use to enter profitable trades. When the price forms an order block, traders can wait for a change of character and bullish equal lows in the price to identify liquidity resting in the order block. Traders can then target the order block and set their stop loss below the internal order block, extending their profit target to the high to secure a risk to reward ratio of six to one.
Conclusion
AI and smart money indicators are powerful tools that traders can use to generate accurate trade entry signals and identify profitable trends. The Machine Learning Indicator and the Smart Money Indicator are two useful indicators that traders can use to make informed trading decisions. Traders can adjust the settings on these indicators to suit their trading strategy and increase their chances of success.
