Main Features
Shadow Diver
TWM
Extensions
STRATEGY
Shadow Diver
Pullback strategy
Strategies
Shadow Diver is a trend-following breakout tool that focuses on how price behaves around an Exponential Moving Average (EMA) calculated on highs. It looks for specific candle patterns where price “dives” through the EMA and then is rejected, using that structure as a base for stop orders above or below recent extremes rather than entering at market. The goal is to capture continuation moves after a clear rejection of the EMA, instead of reacting to every simple cross of the average. Once a valid pattern forms and an order is placed, it stays active only for a limited number of bars, so trades are always taken close to the original setup and not on stale signals. From there, risk and reward are managed with percentage-based stops and targets that automatically adapt to the entry price and instrument volatility.
Description
There are two main signal directions that define how trades are triggered:
- Long signals appear when several consecutive candles close above the EMA, with opens also above the EMA, while their lows momentarily dip below it, showing a brief liquidity sweep and strong rejection by buyers.
- Short signals are the opposite condition, with candles closing and opening below the EMA, but their highs spiking above it and failing, indicating rejection by sellers.
Entry orders are not placed immediately at market; instead, the strategy uses stop orders beyond the high (for longs) or low (for shorts), shifted by an Entry Offset in ticks to make the trigger more or less aggressive.
Position and signal controls
Position sizing and order lifetime are controlled through a few core parameters.
- PosSize defines how many units or contracts are traded on each signal, making risk scalable from small to large accounts.
- Keep Order Bars sets how many candles an entry order can remain active; if price does not trigger the order within that window, the order is automatically canceled, preventing late entries that no longer respect the original pattern.
This keeps executions tied closely to fresh, meaningful setups instead of chasing moves after they have already played out.
Stops and targets
Stops and targets are expressed as percentages of the fill price, so they adjust naturally across different markets and price levels
After an entry is filled, the strategy:
- Places a profit target above (for longs) or below (for shorts) as a fraction of the entry price.
- Places a stop loss on the opposite side, also as a fraction of the entry price.
These are sent as linked exit orders: when either the stop or target is executed, the other is canceled, ensuring positions close with a single, clean outcome and that risk is always defined in advance.
Order management and framework idea
Additional order management logic helps avoid left alone or conflicting orders: dedicated market exit commands can close existing positions immediately when needed, such as at the end of a session or due to discretionary intervention, and the strategy cancels any remaining stop, target, or scale-in orders tied to that position. Shadow Diver is built as a simple and flexible EMA-based framework: a compact set of parameters for the moving average, offsets, and percentage exits allows traders to observe, test, and trade how markets react when price pierces and rejects a dynamic mean instead of relying on complex indicator stacks.
Smart Trend Filtering
Trades only in conditions where price action confirms trend direction using a 3-bar check above or below a moving average.
Dynamic Entry Logic
Uses recent highs/lows and offsets to enter at likely breakout points instead of blindly jumping into the market.
Built-in Risk Management
Every position includes an automatic stop-loss and take-profit order based on percentages of entry price.
Order Time-to-Live Control
If an entry order is not filled within a predefined number of bars, it's automatically canceled to avoid stale entries.
FAQ
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Please read the FAQ below.
What type of strategy is this?
A trend-following breakout strategy with pullback confirmation.
Which indicators does it use?
A single moving average is used for trend direction and as a reference point for price behavior.
How does it decide to enter a trade?
It waits for 3 consecutive closes above or below the moving average, plus certain candle shapes like wicks piercing the average.
How are entries executed?
With stop-market orders placed slightly above highs (for longs) or below lows (for shorts).
What happens if an entry order isn’t filled?
It's canceled after a fixed number of bars to avoid late or irrelevant entries.
Does it use stop-loss and take-profit?
Yes, both are placed automatically based on configurable percentages of entry price.
Is the system always in the market?
No, it enters only when strict conditions are met and stays flat otherwise.
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