Contrarian Entry System

Contrarian Entry System - Opportunity Detection

The Contrarian Entry System identifies potential entry and exit opportunities based on multi-factor oversold and overbought conditions. It uses a staged approach combining momentum, trend strength, and price action analysis to detect situations where assets may be positioned for reversal.

Important: This indicator is designed for awareness and information purposes only. Signals are NOT intended for blind buying or selling. They highlight situations worth investigating further. The final decision must always be made by the trader using additional analysis, context, and other indicators.


Signal Philosophy

This system operates on contrarian principles - looking for opportunities when market sentiment reaches extremes. However, contrarian signals can be misleading:

• In Downtrends: Entry signals may appear during temporary bounces within a larger decline. What looks like an oversold bounce opportunity could be a "falling knife" scenario.
  
• In Strong Uptrends: Exit signals may trigger prematurely during healthy corrections that don't actually threaten the trend.
  
• Context Matters: Always confirm signals with broader market analysis, sector performance, and fundamental factors.
  

Signal Types

Entry signals - three tiers based on oversold depth:

• Good Entry (Green): Deep oversold with multiple factors at extremes - strongest signal
  
• Nice Entry (Blue): Moderate oversold conditions detected
  
• Maybe Entry (Orange): Early-stage detection - higher uncertainty
  

Exit signal (Red) - triggers when multiple overbought conditions are met and momentum shows exhaustion.

Signals appear semi-transparent when price is below the exit SMA, indicating higher-risk conditions.


SMA Exit Protection

Optional cascading SMA-based exit system:

• Configurable primary SMA level (9, 21, 50, or 200)
  
• Automatic fallback to longer SMAs if price never rises above primary
  
• Provides downside protection during extended declines
  
• Can be disabled by selecting "None"
  

Position Filter

When enabled (default), prevents multiple entry signals between exit signals. This helps avoid overtrading and averaging down into losing positions.


Multi-Timeframe Support

Signal calculations can be performed on a different timeframe than the chart:

• Empty setting uses chart timeframe
  
• Higher timeframe provides broader perspective signals
  
• Useful for confirming signals across multiple views
  

Alert System

Configurable alerts for:

• Any entry signal (combined)
  
• Good Entry specifically
  
• Nice Entry specifically
  
• Maybe Entry specifically
  
• Exit signals
  

Best Practices

Before Acting on Entry Signals:

• Check the broader trend - is this a pullback in an uptrend or a bounce in a downtrend?
  
• Review volume patterns - is there buying interest?
  
• Consider sector and market conditions
  
• Look at support/resistance levels
  
• Evaluate fundamental factors if applicable
  

Risk Management:

• Never use signals as sole decision criteria
  
• Consider position sizing based on signal strength
  
• Use the SMA exit feature as a safety net
  
• Be especially cautious with Maybe entries
  
• Semi-transparent signals (below SMA) warrant extra scrutiny
  

When to Ignore Signals:

• Strong downtrends with no sign of reversal
  
• News-driven selloffs with ongoing uncertainty
  
• Low liquidity periods
  
• When signals conflict with higher timeframe analysis
  

This indicator is designed for educational and analytical purposes. Signals indicate potential opportunities that require further analysis - they are not trading recommendations. Past performance does not guarantee future results. Always conduct thorough research and use proper risk management. Consider consulting with financial professionals before making investment decisions.