Supply and demand EA / nested zones with trend aka sam seiden

A SPECIFICATION: NESTED MULTI-TIMEFRAME MOMENTUM (NMTM)

1. CORE OBJECTIVE

The EA is designed to identify institutional Supply and Demand zones on the

H4 timeframe that are "nested" within Daily (D1) zones. It filters for high-

momentum "Leg-Out" moves and only trades in the direction of the Daily

trend.

2. PHASE 1: TREND & CONTEXT FILTERS (DAILY)

The EA must first confirm the Daily bias. No H4 zones are valid if they

contradict the D1 trend.

A. Trend Definition

• Bullish Trend (Longs Only): * 20 EMA is above the 50 SMA.

• Current Price is above the 50 SMA.

• Bearish Trend (Shorts Only): * 20 EMA is below the 50 SMA.

• Current Price is below the 50 SMA.

• Trend Invalidation: If the Daily price closes on the opposite side of the 50

SMA, the trend is considered finished, and all pending limit orders for that

direction must be cancelled.

B. Higher Timeframe (HTF) Nesting

• H4 Demand: The H4 zone (High to Low) must be physically located within

the boundaries of a Daily Demand Zone.

• H4 Supply: The H4 zone (High to Low) must be physically located within

the boundaries of a Daily Supply Zone.

3. PHASE 2: H4 ZONE IDENTIFICATION (THE BASE)

The EA identifies the "Base" using four specific price action formations:

1. RBR (Rally-Base-Rally): Bullish continuation.

2. DBR (Drop-Base-Rally): Bullish reversal.

3. DBD (Drop-Base-Drop): Bearish continuation.

4. RBD (Rally-Base-Drop): Bearish reversal.

The Base Span: Defined as the vertical distance (in pips) between the

highest high and lowest low of the consolidation candles (the "Base") before

the explosive move.

4. PHASE 3: THE "EXPLOSIVE LEG-OUT" QUALITY CONTROL

A zone is only valid if the candle that exits the base (the "Leg-Out")

represents an abnormal institutional footprint.

A. Momentum Ratio (The 70% Rule)

The Leg-Out candle must have a high body-to-range ratio to ensure minimal

price rejection (small wicks).

• Formula: \frac{|Open - Close|}{High - Low} \ge 0.70

• Note: The candle body must represent at least 70% of the total candle

range.

B. Size Requirement

The Leg-Out candle must be "abnormally larger" than the candles forming

the Base. (Recommended: at least 2x the average size of the previous 3

candles).

5. PHASE 4: THE "FOLLOW-THROUGH" (3X MOVE VALIDATION)The EA will not place a limit order immediately. It must wait for the move

to "complete" to verify the profit potential.

1. Move Tracking: Monitor the sequence of candles following the Leg-Out

that are the same color as the Leg-Out.

2. Termination: The "Move" ends when a candle of a different color closes.

3. The 3x Validation Rule:

• Calculation: Total distance of the move (from the edge of the Base to the

highest/lowest point of the same-colored sequence).

• Requirement: The Move must be at least 3 times the size of the Base

Span.

• Logic: MoveDistance \ge (BaseSpan \times 3)

6. PHASE 5: EXECUTION & TRADE MANAGEMENT

A. Entry (Limit Orders Only)

• Buy Limit: Placed at the Proximal Line (top) of the H4 Demand Base.

• Sell Limit: Placed at the Proximal Line (bottom) of the H4 Supply Base.

B. Stop Loss (SL)

• Long: Placed at the Distal Line (bottom) of the H4 Demand Base.

• Short: Placed at the Distal Line (top) of the H4 Supply Base.

C. Order Invalidation

• Delete the Limit Order if the Daily trend changes (Price closes on the

wrong side of 50 SMA).

• Delete the Limit Order if price returns to the zone and "touches" it before

the 3x move was completed.

Summary of Mathematical Constraints for Developer:

• Trend: (EMA20 > SMA50) && (Close > SMA50) = Longs Only

• Candle Quality: Body / (High - Low) >= 0.7

• Reward/Risk Potential: Move_Sequence_Pips >= (Base_Pips * 3)

And SL 33% SL buffer on H4 chart

Stoplossto BE function with R multiples / Take profit R multiples

calculate position size based on dollar risk