ELCARO ALGORITHM
Three TradingView indicators — Forecast (cycle BUY/SELL dates), Trading Filter (σ‑zones + divergences) and Trend Trail — plus a private trading group. Any asset, any timeframe from 15m up.
10 community reviews, linked to original posts · Works on any asset, any timeframe from 15m up
The market is chaos.
The algorithm reads the pattern.
The 3 Modules
ELCARO is built on three independent modules that work together to provide complete market analysis. Each module confirms the others.
Projects the dominant cycle forward and marks BUY/SELL dates on the calendar — a roadmap, not a guarantee.
A smoothed momentum filter of price, measured in σ units, with sigma zones, channel bands and divergence detection. The filter that tells you WHEN to act and in which direction.
Adaptive trend detection and trailing system — a dynamic level that follows price and defines the regime. GREEN trail = uptrend: the trail acts as dynamic support — price pulling back toward the green line is a LONG entry zone. RED trail = downtrend: the trail acts as dynamic resistance — price rising toward the red line is a SHORT entry zone. GRAY = low-volatility chop: no trend, stand aside. The trail gives the direction and the flip level; entry timing comes from the Forecast phase and sigma zones.
Timeframe Hierarchy
ELCARO reads timeframes as a cascade. 1W, 1D and 4H set the DIRECTION; 1H and 15m only time the ENTRY:
| TIMEFRAME | ROLE | WHAT YOU READ |
|---|---|---|
| 1W | Phase | The senior cycle phase: the big picture |
| 1D | Trend | Trend direction inside the weekly phase |
| 4H | Impulse / direction | The impulse; must agree with 1W and 1D |
| 1H & 15m | Entry timing only | Fine-tunes the entry; never sets the direction |
Never go below 15m. The algorithm is not designed for sub-15m noise.
Three modules. One system.
Complete intelligence.
FM — Forecast Module
The FM module detects dominant market cycles and generates BUY/SELL dates. Think of timeframes as gears in a machine — the larger gear drives the smaller ones.
GEARBOX · 1W 1D 4H 1H 15m
FM ascending · 4H green · filter at lower boundary reversing
Timeframes not aligned · awaiting confirmation · no entry
FM descending · 4H red · filter at upper boundary reversing
Like a Matryoshka doll: one cycle inside another. The smaller the timeframe, the smaller the amplitude. 1W sets the phase, 1D the trend, 4H the impulse — 1H/15m only time the entry. The TFs drag each other: this is how the market machine moves.
CASCADE LOGIC
1. Higher TF sets the phase (1W1D)
2. Mid TF confirms impulse (4H)
3. Lower TF provides entry timing only (1H/15m)
4. 1W, 1D and 4H must align for a valid trade
CASCADE: 1W phase 1D trend 4H impulse 1H / 15m entry timing
Trading Filter
The VOL module is your main decision-making tool: a smoothed momentum filter of price, measured in σ units. It generates real-time alerts based on channel position and statistical extremes.
Channel Bands
Indicator near or above the upper band = extreme stretch zone. The filter has extended too far up from center. Stretched zone — a pullback becomes more likely; wait for the filter to turn.
Indicator near or below the lower band = extreme stretch zone. The filter has extended too far down from center. Stretched zone — a bounce becomes more likely; wait for the filter to turn.
The center line divides bullish and bearish territory. Indicator ABOVE center = bullish phase. BELOW center = bearish phase. Crossing the center is a trend change indication. Direction of crossing matters: crossing UP = bullish shift, crossing DOWN = bearish shift.
Channel Squeeze
When the channel bands squeeze (narrow toward center), it means volatility is compressing — like a spring being loaded. The next time the indicator line crosses the center, watch whether it expands toward the σ2 band in the direction of the crossing.
Alert Types
| ALERT | MEANING | ACTION |
|---|---|---|
| Entered LOWER | Indicator dropped into lower band zone | Prepare BUY |
| Left LOWER | Indicator turning up out of the lower band zone | BUY confirmation |
| Entered UPPER | Indicator rose into upper band zone | Prepare SELL |
| Left UPPER | Indicator turning down out of the upper band zone | SELL confirmation |
| Crossed Center | Indicator crossed center line upward — bullish shift | Phase change to BULLISH |
| Crossed Center | Indicator crossed center line downward — bearish shift | Phase change to BEARISH |
BLACK-SCHOLES PRICING MODEL
Straddle × 1.253 = σ₁ · × 2.507 = σ₂ · × 3.760 = σ₃
We don't predict.
We calculate probability.
Divergences
Divergences are the most powerful observations in the ELCARO system. They show when price and the trading filter disagree — an early sign that momentum is fading.
Regular Divergences
Regular divergences signal a possible REVERSAL. Price makes a new extreme, but the indicator does not confirm it. Marked with crosses on the chart.
Hidden Divergences
Hidden divergences signal a possible CONTINUATION of the existing trend. Marked with (bullish) and (bearish) triangles on the chart.
Confirmed vs Unconfirmed
Divergence is forming but not yet confirmed by candle close. The observation may disappear if price invalidates it. Watch — but don't act yet.
Divergence confirmed by candle close. The observation is locked in. This is an entry indication — especially when confirmed on multiple timeframes.
All three modules on your TradingView chart, plus the private trading group.
GET ACCESSPROBABILITY CORRIDORS
Where price usually stays.
Not where you hope it goes.
68 / 95 / 99.7% of readings fall inside ±1/2/3σ
Sigma Zones σ
Sigma zones measure statistical extremes. Based on standard deviation (σ), they show how far price has deviated from the mean. The further out, the rarer the reading — σ2 and σ3 mark statistically stretched moves, not guaranteed turns.
Sigma (σ) is standard deviation — a statistical measure of how far a value is from average. In trading, when price reaches σ2 or σ3, the reading is statistically extreme (outside 95% / 99.7% of readings).
| SIGMA ALERT | MEANING | INSIDE ±σ (NORMAL) |
|---|---|---|
| σ3 SELL | Extreme upper stretch — maximum deviation from mean | 99.7% |
| σ2 SELL | Strong upper stretch — statistically rare zone | 95% |
| σ1 SELL | Caution — stretched above average | 68% |
| σ1 BUY | Caution — stretched below average | 68% |
| σ2 BUY | Strong lower stretch — statistically rare zone | 95% |
| σ3 BUY | Extreme lower stretch — maximum deviation from mean | 99.7% |
Sigma = Cascade Position Zones (NOT Stop‑Losses)
CASCADE AVERAGING
Position size increases as price enters deeper sigma zones. No stop-losses — only mathematical averaging.
The method relies on cascade averaging.
MTF Trend Filter — The Only 'Stop' in ELCARO
ELCARO does NOT use traditional stop-losses (fixed price levels). The only reason to close a position is when the higher timeframe trend changes direction. This is the HSH (Trend Trail) module's primary function — it detects when the dominant trend on the senior timeframe has shifted.
| INDICATION | MEANING | ACTION |
|---|---|---|
| TREND ASCENDING | Higher TF confirms uptrend intact | Only LONG positions. Close all shorts immediately. |
| TREND DESCENDING | Higher TF confirms downtrend | Only SHORT positions. Close all longs immediately. |
Cascade: 1W 1D 4H set the direction · 1H / 15m only time the entry — the senior timeframe always controls the junior
Traditional stop-losses get hunted by market makers. Fixed price levels are visible to exchanges and large players who deliberately push price through stop clusters before reversing. ELCARO's approach is fundamentally different: instead of exiting at a fixed loss level, we add to the position at sigma zones (cascade averaging) and only exit when the actual trend structure breaks — something that cannot be faked with a single wick.
How Does It Work?
ELCARO reads timeframes as a cascade. 1W, 1D and 4H set the phase and direction; 1H and 15m only time the entry.
Read 1W 1D 4H for direction, time the entry on 1H/15m
FORECAST module determines the current market phase and direction on the higher timeframe
TRADING FILTER on 1H/15m times the entry with sigma zones and divergences
HSH_Trail shows the trend regime on the senior timeframe (green = long side, red = short side, gray = stand aside). A trail flip on the senior TF is your exit signal — position size and risk stay your decision.
Algorithm Overview
Works on any asset (crypto, forex, stocks, commodities) and any timeframe from 15m up. Delivered as TradingView indicators with full access to a private trading community.
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COMMUNITY REVIEWS
The edge is mathematical.
The algorithm is Elcaro.
