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☁️ Cloud Bands

Adaptive volatility envelope that expands and contracts with market conditions, providing dynamic support/resistance levels and trend direction.

🎯 What are Cloud Bands?

Cloud Bands create a dynamic volatility envelope around price action, automatically adjusting to market conditions. The bands expand during volatile periods and contract during consolidation, helping you identify trend direction, support/resistance levels, and potential breakout zones.

Key Components

  • 🔴 Upper Cloud - Resistance and overbought zone

  • 🟢 Lower Cloud - Support and oversold zone

  • ➖ Midband - Dynamic equilibrium level

  • 🎨 Gradient Layers - Volatility intensity visualization

Why They Work

Cloud bands adapt to market volatility in real-time, providing context-aware support and resistance levels that static indicators miss. The multi-layered gradient shows strength levels at a glance.

Trading Edge: The adaptive nature means you're always working with relevant levels - not fixed lines that ignore current market conditions.

📊 Understanding the Cloud Structure

Cloud Layers

The cloud consists of multiple bands creating a gradient effect:

Layer
Location
Meaning
Trading Use

Outer Band

Furthest from price

Extreme overbought/oversold

Reversal zones

Middle Layers

Gradient zones

Increasing strength levels

Partial profits

Inner Band

Closest to price

Initial support/resistance

First targets

Midband

Center line

Dynamic equilibrium

Bias filter

Dynamic Midband Color Coding

Price Position Indication:

  • 🟢 Green tint - Price above (bullish)

  • 🔴 Red tint - Price below (bearish)

  • ⚪ Neutral - Price at equilibrium

Trading Application:

  • Green = Look for longs

  • Red = Look for shorts

  • Neutral = Wait for direction

⚙️ Configuration Settings

Basic Settings

Setting
Options
Default
Description

☁️ Show Cloud Bands

On/Off

ON

Toggle cloud visibility

⏱ Cloud Period Mode

Auto/Manual

Auto

Adaptive or fixed period

⏳ Manual Period

5-400

80

Custom period (Manual mode only)

〰️ Show Cloud Midline

On/Off

ON

Display center equilibrium line

Period Mode Guide

🎯 Trading Signals

1

Cloud Breakouts

Bullish Breakout:

  • Price closes above upper cloud

  • Cloud is sloping upward

  • Volume confirmation ideal

Bearish Breakout:

  • Price closes below lower cloud

  • Cloud is sloping downward

  • Strong momentum signal

2

Cloud Squeeze

Characteristics:

  • Cloud bands converge (narrow)

  • Low volatility period

  • Energy building for move

Trading approach:

  • Mark the squeeze zone

  • Wait for expansion direction

  • Trade the breakout with tight stops

3

Midband Crosses

Signals:

  • Cross above = Bullish bias shift

  • Cross below = Bearish bias shift

  • Multiple tests = Strong level

Confirmation:

  • Check cloud slope

  • Verify MTF alignment

  • Look for volume

📈 Trading Strategies

Strategy 1: Cloud Edge Bounce

Setup:

  1. Price approaches cloud edge in trending market

  2. Look for rejection candles

  3. Enter on bounce with tight stop

  4. Target opposite cloud edge or midband

Best for: Trending markets with clear cloud slope

Strategy 2: Breakout Trading

Setup:

  1. Identify cloud squeeze (narrow bands)

  2. Wait for decisive break with volume

  3. Enter on retest of cloud edge

  4. Stop below/above cloud

  5. Target = 2x cloud width

Best for: Range breakouts and momentum trades

Strategy 3: Mean Reversion

Setup:

  1. Price at outer cloud extreme

  2. Look for reversal patterns

  3. Enter targeting midband

  4. Stop beyond cloud extreme

Best for: Overextended markets

🎨 Visual Interpretation

Cloud Colors and Opacity

Color Intensity:

  • Darker/opaque = Higher volatility

  • Lighter/transparent = Lower volatility

  • Red gradient = Resistance zones

  • Green gradient = Support zones

Trading Meaning:

  • Dark = Use wider stops

  • Light = Tighten risk

  • Red = Sell zones

  • Green = Buy zones

Cloud Slope Analysis

Slope
Visual
Meaning
Trading Bias

Steep up

📈 45°+

Strong uptrend

Long only

Gentle up

↗️ 15-45°

Weak uptrend

Long preferred

Flat

➡️ 0-15°

Ranging market

Both directions

Gentle down

↘️ 15-45°

Weak downtrend

Short preferred

Steep down

📉 45°+

Strong downtrend

Short only

🔔 Alert Configuration

Alert Name
Triggers When
Use Case
Setup

Cloud Breakout Up

Price breaks above upper cloud

Momentum long entry

Slope must be up

Cloud Breakout Down

Price breaks below lower cloud

Momentum short entry

Slope must be down

Cloud Midband ↑

Price crosses above midband

Bias shift to bullish

Watch for confirmation

Cloud Midband ↓

Price crosses below midband

Bias shift to bearish

Watch for confirmation

Alert Tip: Combine cloud breakout alerts with slope confirmation for highest quality signals.

💡 Pro Tips

Reading Market Conditions

Cloud Width
Market State
Strategy

Very Wide

High volatility

Wide stops, smaller size

Normal

Balanced

Standard approach

Narrow

Low volatility

Breakout pending

Expanding

Volatility increasing

Trend starting

Contracting

Consolidation

Prepare for move

📊 Combining with Other Features

Powerful Combinations

With Order Blocks:

  • Cloud edge + Order block = High-probability reversal

  • Breakout + Clear block = Momentum continuation

  • Squeeze at OB = Explosive move pending

With Market Structure:

  • CHoCH at cloud extreme = Major reversal

  • BOS with cloud breakout = Strong trend

  • Structure within cloud = Weak signal

With MTF Dashboard:

  • Cloud breakout + 6+ TF aligned = Highest conviction

  • Midband cross + MTF flip = Trend change confirmed

  • Squeeze + MTF divergence = Stay out

⚠️ Common Mistakes

Critical Errors to Avoid:

  1. Trading against cloud slope - Respect the trend direction

  2. Ignoring squeeze setups - These offer best risk/reward

  3. Wrong period setting - Start with Auto mode

  4. Entering at mid-cloud - Wait for edges for best entries

  5. Not adjusting stops for width - Wide cloud needs wide stops

🛠️ Troubleshooting

Cloud not showing

  • Check "Show Cloud Bands" is enabled

  • Ensure sufficient price history loaded

  • Try switching between Auto/Manual mode

  • Verify chart has enough data points

  • Some instruments may need manual period adjustment

Cloud too wide/narrow

  • Auto mode: Adapts automatically - if still wrong, try Manual

  • Manual mode adjustments:

    • Too wide → Decrease period (try -20)

    • Too narrow → Increase period (try +20)

  • Consider your timeframe (lower TF = lower period typically)

Midband not visible

  • Enable "Show Cloud Midline" in settings

  • May be hidden behind price candles

  • Check if it's the same color as background

  • Try zooming in/out

Cloud appears choppy

  • Normal on very low timeframes (1-5m)

  • Solutions:

    • Increase period in manual mode

    • Use higher timeframe (15m+)

    • Switch to Auto mode

    • Enable smoothing if available

📚 Quick Reference

Visual Cues at a Glance

Cloud Width:

  • Wide = High volatility

  • Narrow = Low volatility (squeeze)

  • Expanding = Trend starting

  • Contracting = Range forming

Colors & Slope:

  • Green midband = Bullish bias

  • Red midband = Bearish bias

  • Steep slope = Strong trend

  • Flat cloud = Range-bound

Trading Rules Checklist

Best Practices

  1. Start with Auto mode - Let it adapt

  2. Combine with other features - Never trade clouds alone

  3. Respect cloud extremes - High probability reversals

  4. Wait for clear signals - Patience pays

  5. Adjust for volatility - Wide cloud = careful

🔗 Related Features

For additional support, visit our FAQ or contact support.

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