Understanding Signal Types
Quantum GradeA identifies 5 distinct signal patterns, each optimized for different market conditions. Learn when and how to trade each type.
Signal Type Overview
| Signal | Type | Risk Level | Best Timeframe |
|---|---|---|---|
| P1: Reversal | Counter-trend | Medium-High | H4, Daily |
| P2: Continuation | With-trend | Low | H1, H4 |
| P3: Candlestick | Price Action | Medium | All |
| Liquidity Grab | Smart Money | Medium | H4, Daily |
| Strong Engulfing | Momentum | Medium-High | H4, Daily |
P1: Reversal
High-probability reversal at key structure levels
Key Characteristics
- •Identifies potential trend reversals at significant support/resistance
- •Requires multiple confluence factors for validation
- •Best used at major swing highs/lows on H4 and above
- •Higher risk, higher reward potential
Examples
- •Double Top/Bottom patterns
- •Head and Shoulders formations
- •Key level rejections with momentum divergence
Best For: Swing traders looking for trend change opportunities
P2: Continuation
Trend continuation after healthy pullbacks
Key Characteristics
- •Captures momentum continuation within established trends
- •Enters after retracements to key levels
- •Lower risk due to trend alignment
- •Most consistent signal type
Examples
- •Pullbacks to EMAs in uptrend
- •Flag and pennant breakouts
- •Higher low formations in bullish structure
Best For: Traders who prefer trading with the trend
P3: Candlestick
Strong candlestick patterns at confluence zones
Key Characteristics
- •Identifies powerful candlestick formations
- •Requires location at key support/resistance
- •Quick entries with defined risk
- •Works across all timeframes
Examples
- •Engulfing patterns at structure
- •Pin bars at key levels
- •Morning/Evening star formations
Best For: Price action traders who read candle patterns
Liquidity Grab
Stop hunt reversals where smart money enters
Key Characteristics
- •Identifies areas where retail stops are hunted
- •Entry after liquidity sweep confirms reversal
- •High win rate when properly identified
- •Requires patience for setup development
Examples
- •False breakouts above/below range
- •Stop runs before major moves
- •Liquidity sweeps at session highs/lows
Best For: Traders who understand market manipulation
Strong Engulfing
Powerful momentum shift with volume confirmation
Key Characteristics
- •Large engulfing candles showing momentum shift
- •Requires volume/volatility confirmation
- •Clear invalidation level for stops
- •Often signals start of new moves
Examples
- •Bullish engulfing at demand zones
- •Bearish engulfing at supply zones
- •Momentum candles breaking structure
Best For: Momentum traders looking for explosive moves
Signal Selection Best Practices
Start Simple
Begin with P2: Continuation signals. They have the highest consistency rate because you're trading with the trend.
Match Your Style
Aggressive traders may prefer Reversal and Strong Engulfing. Conservative traders should focus on Continuation.
Timeframe Alignment
Always check that the signal type aligns with the higher timeframe bias. A reversal signal against Daily trend requires extreme caution.