QEMO Trading Guide
The Quantum Electromagnetic Oscillator (QEMO) is an advanced momentum gauge that borrows principles from quantum probability to measure absolute price dominance, noise, and entropy over a defined lookback period.
What does the indicator show?
- Main QEMO Line: A dynamic, color-shifting oscillator curve tracking the absolute pressure of the market. High positive values show bullish dominance; negative values show bearish dominance.
- Probability Bands (1% / 99%): The trailing statistical extremes denoting highly overbought and oversold conditions based on recent historical variation.
- Shaded Entropy Background: White vertical background shading indicating market "noise." Denser shading means higher entropy (unpredictability), while clear areas mark clean trending momentum.
Key Settings
- Volatility Lookback: The sample size (in bars) used to calculate baseline volatility, momentum smoothing, and baseline averages.
- Price Bins: The resolution of the internal probability density matrix used to compute quantum deviations from mean price action.
- Planck Constant: A multiplier adjusting the sensitivity of the probability wave response.
- Correlation Window: The timeframe over which market entropy (randomness vs trend strength) is calculated.
How to use Strategy Parameters (Condition Source)
Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.
1. Core Oscillator Values
Use the raw output lines to understand the exact market state and statistical extremes.
qemo— The core oscillator value representing the current smoothed, entropy-adjusted market force.p99— The 99th percentile extreme boundary (overbought threshold).p1— The 1st percentile extreme boundary (oversold threshold).entropy— Measuring from 0.0 to 1.0, this defines how noisy or random the price action currently is.
Strategy Example: For a momentum trend-following approach, you might stipulate an entry condition where qemo > 0 and entropy < 0.5, ensuring you are trading in a clean, established uptrend with low noise.
Strategy Example 2: A mean-reversion setup might look to enter Long trades exclusively when price has reached extreme exhaustion, defined as qemo < p1.