User Guide: Signal Zone Filter in the Trading System

What is Signal Zone Filter?

Signal Zone Filter helps eliminate signals that appear in "floating" positions — meaning they are not near any important price zones. It only keeps signals that are connected to market structure zones (swing high/low, BOS, CHoCH).

Simply put:

• When a Buy signal appears → the filter checks: "Did this pattern sweep through a nearby support zone? Or was there a recent bullish BOS/CHoCH event?"

  • If yes → signal is kept (displayed on chart)

  • If no → signal is blocked (not displayed)

Purpose: Reduce noise signals, trade only at structurally significant price zones.

How it works (2 OR conditions)

The filter uses 2 independent checks; only 1 of the 2 needs to be satisfied for a signal to pass:

Check 1: Swing Sweep

• Buy: Pattern low must touch below a nearby swing low (sweep support zone HL/LL)

• Sell: Pattern high must spike above a nearby swing high (sweep resistance zone HH/LH)

• Sweep distance is limited by Swing Sweep Max Depth to avoid mistaking real breakouts

Why "sweep"? In price action analysis, when price sweeps past a high/low then reverses → this is often a sign of liquidity sweep. Signals appearing right after a sweep typically have higher success probability.

Check 2: Event Recency

• Look for a BOS or CHoCH event in the same direction occurring within the last N candles

  • Buy: needs recent bullish BOS or bullish CHoCH

  • Sell: needs recent bearish BOS or bearish CHoCH

Why recent events? If there was just a BOS/CHoCH → market structure just confirmed the direction → signals in that direction are more reliable.

How to enable Signal Zone Filter

Signal Zone Filter is built into these indicators: Mirage (Fakey), PinBar, InvertedHammer (and Template). By default, the filter is off (false).

To enable: right-click the indicator → Properties (or press F7) → find parameter Enable Signal Zone Filter → change to true.

Important note: Signal Zone Filter requires Market Structure to be running (because it needs swing and BOS/CHoCH data from Market Structure). Market Structure is always enabled by default, so you don't need to do anything extra.

Input parameters explained

1. Enable Signal Zone Filter — Turn filter on/off

Tip: Enable filter when you see the indicator displaying too many signals, especially signals in "empty space" (not near any high/low).

2. Swing Sweep Max Depth (×ATR) — Maximum sweep distance

Formula: Max sweep distance = Swing Sweep Max Depth × ATR

Example: ATR = 50 pips, Max Depth = 1.5 → pattern can only sweep maximum 75 pips (1.5 × 50) past the swing level. If it sweeps more than 75 pips → doesn't count as sweep.

When changing:

• Increase (2.0, 3.0...) → accept farther sweeps → easier to pass filter → more signals

• Decrease (0.5, 0.8...) → only accept sweeps close to swing level → fewer signals but more accurate

Tip: 1.5 works for most cases. If trading Gold (large range), can increase to 2.0–2.5. If trading forex majors (smaller range), keep 1.0–1.5.

3. Max Recent Swings to Check — Number of recent swings to check

When changing:

• Increase (12, 15, 20) → check more older swings → easier to find a sweep → more signals pass

• Decrease (3, 5) → only check a few recent swings → signal must be near newer swings to pass

Tip: Value of 8 is well balanced. On small timeframes (M5–M15) can increase to 10–12 because swings form faster. On large timeframes (H4–D1) keep 5–8.

4. Swing Sweep (HH/LH/HL/LL) — Enable/disable swing sweep check

Tip: Should keep true. Only disable if you want the filter to rely entirely on BOS/CHoCH events instead of swing zones.

5. BOS Recency Check — Enable/disable recent BOS check

• Bullish BOS (BOS ▲) → allows Buy signal to pass

• Bearish BOS (BOS ▼) → allows Sell signal to pass

Tip: Should keep true. BOS is a trend continuation signal — very reliable.

6. CHOCH Recency Check — Enable/disable recent CHoCH check

• Bullish CHoCH → allows Buy signal to pass

• Bearish CHoCH → allows Sell signal to pass

When to disable: If you only want to trade with the trend (not trade reversals), disable CHOCH Recency Check so filter only passes signals with BOS or sweep.

7. Event Lookback (bars after BOS/CHOCH) — Event time window

Example: Event Lookback = 10, on H1 timeframe. If BOS ▲ occurs at 10:00 → Buy signal must appear before 20:00 (10 H1 candles = 10 hours) to pass because of this event.

When changing:

• Increase (20, 30, 50) → wider "window" → older events still count → easier to pass but less meaningful

• Decrease (3, 5) → only signals appearing very soon after event pass → stricter, more accurate

Tip: On M15–H1, value of 10 works well. On H4–D1, should decrease to 5–7 (each candle is already long, 10 H4 candles = nearly 2 days). On M1–M5 can increase to 15–20.

Signals visible on chart

Signal Zone Filter is a hidden filter — it doesn't draw any additional objects on the chart. Instead, it blocks or allows pattern signals (Fakey, PinBar, Inverted Hammer) to be displayed.

When filter is ON (enabled = true):

• Signal passes filter → displays normally (arrow, zone fill, trading line...)

• Signal is blocked → not displayed on chart (disappears completely)

When filter is OFF (enabled = false):

• All signals display normally (as if there's no filter)

How to know filter is working:

• Enable Debug Mode (in indicator parameters) → open Expert tab → find log lines tagged [SZ-FILTER] or [SZ_FILTER]

• Log will show: which signal PASS (and reason: swept which swing, or which event), which signal BLOCK

Before/after filter comparison:

Scenario 1: Buy signal passes via Swing Sweep

• Market Structure shows ▲ UPTREND , latest swing low (HL) at 2,030

• Buy pattern appears (e.g., Fakey Bullish), pattern low touches 2,028 (2 pips below HL)

• Filter checks: "Pattern low 2,028 < HL 2,030? → Yes. Distance 2 pips < Max Depth 75 pips? → Yes"

• Result: PASS — Pattern swept support zone → reliable signal → displays on chart

• 

Scenario 2: Buy signal passes via recent BOS

• No nearby swing (pattern doesn't sweep past any high/low)

• But 5 candles ago, BOS ▲ (bullish Break of Structure) occurred

• Filter checks: "Is there bullish BOS within 10 candles? → Yes (5 candles ago)"

• Result: PASS — Structure just confirmed bullish → Buy signal is reasonable

Scenario 3: Signal blocked

• Sell signal appears, but pattern high doesn't spike above any swing high

• And no bearish BOS/CHoCH within the last 10 candles

• Filter checks: "Sweep? → No. Event? → No"

• Result: BLOCK — Signal is "floating", not connected to structure zone → eliminated

Practical tips

Tip 1: Start with default values, fine-tune later

Enable filter with all default parameters first. Observe for 1–2 weeks how many signals the filter removes. If too few signals blocked → increase strictness. If too many good signals blocked → decrease strictness.

Tip 2: Combine with Market Structure to understand meaning

When signal passes filter, open Expert tab to see reason:

• If passed via sweep HL → pattern swept bullish support zone → very strong in Uptrend

• If passed via sweep LL → pattern swept new low → may be reversal sign (be more careful)

• If passed via same-direction BOS → momentum is strong → trend-following signal

Tip 3: Disable CHoCH if you only trade with trend

If your trading style is trend-only (no catching reversals):

• Keep BOS Recency Check = true

• Set CHOCH Recency Check = false

• Result: signals only pass when sweeping swing or having BOS (trend continuation) — don't pass because of CHoCH (reversal)

Tip 4: Warning about "false sense of security"

Filter helps eliminate weak signals, but doesn't guarantee 100% remaining signals will win. Risks still exist:

• Sweep might be a real breakout (price continues far, doesn't return)

• Recent BOS/CHoCH doesn't guarantee momentum will sustain

• Always use stop loss and proper money management, regardless of what filter says

Tip 5: Adjust Event Lookback by timeframe

Enable Debug Mode = true in indicator parameters, then open MT5 → View → Toolbox → Expert tab. You'll see log lines like:

text

Use this information to:

• Understand why signal was blocked

• Fine-tune parameters appropriately

Tip 7: Be careful using filter on small timeframes + ranging markets

In ranging markets (Market Structure shows ◆ RANGING ), swing highs/lows alternate close together. Patterns easily "sweep" past swings → most signals pass → filter is less effective.

Recommendation: Combine Signal Zone Filter with Direction Filter. Direction Filter will block signals in ranging markets, while Signal Zone Filter filters position in trending markets.

Optimize by trading style

Quick summary

Frequently Asked Questions (FAQ)

Q: After enabling filter, all signals disappeared?
A: Possibly market is ranging + no recent BOS/CHoCH. Try increasing Event Lookback or Swing ATR Mult. If still none → market truly has no suitable structure zones.

Q: Does filter draw anything on chart?
A: No. Filter works "behind the scenes" — only blocks/allows signals. To see swing zones (HH/HL/LH/LL) and BOS/CHoCH, enable Show Swing Markers and Show BOS/CHOCH Lines in Market Structure section.

Q: Must Market Structure be enabled for filter to work?
A: Yes. Market Structure provides swing and event data for the filter. Market Structure is always enabled by default, so no need to worry.

Q: Should I enable filter from the start or only when needed?
A: Recommended to use indicator without filter first to get familiar with signals. Then enable filter to reduce noise once you understand how the indicator works.