Shadows V2, by ParagonSignals

29 ธ.ค. 2025

"Shadows" is a momentum indicator with a more “market-structure aware” backbone. Instead of treating raw price as the signal, it builds a cleaner internal series by mixing direction (price change normalized by volatility), activity relative volume), and robust normalization so spikes don’t dominate. That produces a smoothed “base” line that behaves like a filtered price proxy.

On top of that base, it runs a MACD-style momentum read (fast/slow moving averages + signal line). The key difference is the gating: it tries to avoid firing in dead or choppy markets by requiring a minimum regime strength(volatility + volume) plus a minimum trend quality (slope + efficiency/trendiness). Entries are then triggered only when momentum is strong enough relative to a dynamic threshold(it adapts to current conditions), with simple confirmation/cooldown to reduce noise. Exits use hysteresis so it doesn’t flip in and out on tiny wiggles.

Finally, the Quality Score (0–100) is your quick filter: higher score means cleaner conditions and more trustworthy signals; low score usually means chop/noise. The colored lines can be read as a live direction/momentum guide even without the entry/exit markers.

Treat the colored state as the regime-consistent directional bias
Bullish color/state, directional bias (+). Operate in the long domain; avoid contra-signals.
Bearish color/state, directional bias (-). Operate in the short domain; avoid contra-signals.
A rapid state alternation, low directional persistence (chop). Reduce participation and require cleaner confirmation.

Use triggers as discrete state-transition events

L = long-entry event. Valid only when the current state is bullish (alignment condition).
S = short-entry event. Valid only when the current state is bearish.
XL = long-exit event. Treat as a bias/momentum deterioration signal; flatten exposure.
XS = short-exit event. Same logic; flatten exposure.

When state persistence is poor (frequent color flips), treat triggers as low quality: either stand down or only act when the state remains stable for multiple bars.
Never take L against bearish state or S against bullish state; the system is designed around alignment, not mean-reversion.

This keeps the workflow strictly state-driven (colors define the trade domain) and event-driven (L/S enter, XL/XS exit), which is exactly how you avoid noise-induced flipping.

30 ธ.ค. 2025

เอกสารเผยแพร่

Shadows is a flow-weighted momentum oscillator. Instead of running MACD on price, it builds a signed activity factor from OHLCV (direction × relative volume), then applies a MACD regime detector on that factor to flag momentum inflections.

Signal construction (factor model)

Directional proxy: A discrete sign of the 1-bar return: up = +1, down = −1, flat = 0.
Activity normalization: Volume is normalized by an EMA baseline to form relative volume, then capped to control outliers.
Signed flow factor: direction × capped relative volume → a compact proxy for “net pressure.”
Noise control: the flow factor is EMA-smoothed to reduce microstructure noise.

Regime detection (MACD on factor, not price)

Compute fast and slow EMAs on the smoothed flow factor; their difference is the MACD(momentum of pressure).
A further EMA produces the signal line; the*histogram is the residual (acceleration/decay of pressure).

Event logic (trade markers)

Long bias event: MACD crossing above signal, optionally gated by a minimum |MACD| threshold (energy filter).
Short bias event: MACD crossing below signal, same gating.
Exit markers are the symmetric cross events. This version is intentionally stateless: it produces regime-change events, not a full position manager.

What it captures

A shift from price-based momentum to pressure-based momentum: the oscillator responds more to directional moves occurring on above-baseline volume, and less to low-participation drift.
This indicator is for educational/informational purposes only and is not financial advice or a recommendation to buy or sell. Signals are probabilistic and can be wrong; past performance doesn’t guarantee future results. Trading crypto/derivatives involves high risk and you may lose all capital. Use proper risk management and you’re responsible for any decisions or losses.