EMA Retest Signal Indicator (Indicator)

EMA Retest Signal Indicator (Strict + Loose)
Overview:
This indicator is designed for active traders who want to identify high-probability retraction (pullback) opportunities within confirmed EMA trends. It highlights two categories of signal candles—strict and loose—based on how price interacts with fast and slow EMAs, giving you clear, visually-coded signals for both trend continuation and optimal entries.

How It Works
EMA Trend Confirmation:
The script uses a fast EMA (default 13) and a slow EMA (default 48). Trend confirmation occurs only after a user-defined number of candles have closed beyond an EMA crossover, filtering out false or premature trend shifts.

Strict Retraction Signals:
These appear when a retraction candle pulls back and tests both the fast and slow EMAs before resuming in the direction of the main trend. These are typically higher-confidence signals.

Loose Retraction Signals:
Designed to catch “shallower” or more flexible pullbacks. These signal when the candle either:

Touches only the fast EMA (but stays above/below slow EMA), or

Comes within a configurable maximum number of ticks from the slow EMA (but does not need to touch either EMA).
Blue diamonds indicate fast EMA tests; yellow diamonds indicate pure distance-based signals.

Chop Filter:
The script automatically suppresses signals if it detects the trend has shifted more than once within a configurable recent bar window (default: last 10 candles). This helps you avoid signals during choppy or sideways markets.

Trading Window Highlighting:
Optionally highlights your preferred trading hours on the chart background for visual clarity.

Inputs & Settings
Fast EMA & Slow EMA lengths

Number of bars to confirm trend after EMA crossover

Toggle for displaying strict/loose retraction signals

Maximum allowed tick distance for loose signals (yellow diamonds)

“Chop filter” (bars to look back for trend shifts)

Optional: show/hide trend background highlights

Visual Signals
Green triangle up: Strict long entry candidate

Red triangle down: Strict short entry candidate

Blue diamond: Loose retraction signal, tested fast EMA

Yellow diamond: Loose retraction signal, within max distance from slow EMA

Who Is This For?
Day traders and scalpers seeking precise pullback entries in strong trends

Algo/system traders wanting robust, visually intuitive signal logic

Anyone who wants an advanced, trend-following indicator for futures, forex, crypto, or equities

Usage Tips
Use in combination with your risk management and other confirmation tools.

Tune the “max loose ticks” and trend confirmation bars for your preferred market/volatility.

Strict retractions are usually higher confidence; loose can help catch moves that don’t quite reach the EMAs.

Note: This indicator is not financial advice and should be tested in a demo or backtest environment before live use.