7trade Cipher A: a ribbon of averages and marks above the candles
Cipher A draws a ribbon of eight moving averages over the candles and puts marks above the bars: circles, crosses, triangles and rhombs. After this article you will know what each colour and each mark means, which events Cipher A gives the strategy builder and what each setting changes. How to turn the indicator on and where to place it on the screen is covered in "7trade bot: introduction".
Why it is useful
On a binary option two things matter: which way the price is going now and whether this move is running out. The ribbon answers the first question with its colour, the marks answer the second: each mark means that one average crossed another or that a hidden momentum turned.
The indicator is adapted for short trades:
- marks in both directions — CALL and PUT are equal on a binary option, so every mark is drawn both up and down;
- ribbon reversal threshold — to the right of the last candle you can see at which close the ribbon will change colour;
- typical move per trade — how far the price usually travels during your trade. All distances are compared with it: to the ribbon, to the threshold.
Below is a live chart on real candles. Click it to open it large; there a click on a mark shows its explanation. The ⚙ icon opens the settings window: any change redraws the chart at once.
What is on the chart
The ribbon
Eight exponential moving averages (EMA) — from a fast one over 5 bars to a slow one over 34 bars. The fast one reacts to the price earlier, the slow one later. The ribbon is about the order of the lines: while they fan out in one direction, the move is alive; when they come together, it is fading.
| Colour | Meaning |
|---|---|
| Blue ribbon, from a bright edge to a pale one | The ribbon is turned up: the 11-bar average is above the 34-bar average |
| Grey ribbon | The ribbon is not working upwards. Grey is not "down", it is the absence of an upward move |
| Narrow fill at the edge of the ribbon | The gap between the two fastest averages. When it widens, they are diverging |
| Ribbon body fill | The gap between the 11-bar and 34-bar averages. Its thickness shows the strength of the move |
The ribbon colour is the background for all marks. Read an up mark on a blue ribbon and a down mark on a grey one. A mark against the ribbon colour goes against the current move.
Marks above the bars
The marks of one bar stand in a stack above the candle, without gaps: the rarer the mark, the higher it is in the stack. The order from bottom to top is as in the table.
| Mark | Meaning | How to read it |
|---|---|---|
| Circle, green or red | The whole ribbon turned: from this bar it changed colour | A marker of a side change. It comes late — the move has already started |
| Cross, green or red | The two fastest averages crossed | The earliest and most frequent sign of a reversal. One cross is not enough — watch whether a rhomb and a circle follow |
| Triangle | The 11-bar average crossed the 15-bar average | Continuation of the move inside the ribbon, not a reversal. Against the ribbon colour it is more often a pullback |
| Rhomb, green or red | The momentum turned — the hidden WaveTrend oscillator | A rhomb matching the ribbon colour: momentum agrees with it. Against the ribbon: the first sign it may turn |
| Ochre rhomb | The candle opened above the ribbon and rose, the previous one rose too, no reversal signs. Dark ochre is the same downwards | The trend is going calmly |
| Large dark rhomb ("blood diamond") | A rhomb and a cross on one bar: momentum and the fast averages turned together | The strictest and rarest mark of the ribbon |
| Yellow cross | Momentum turned down, but RSI is already very low. Dark yellow is the same upwards | A warning: the move is probably running out. An argument against entering on a rhomb on this bar |
The WaveTrend oscillator is not drawn on the chart — you see it only through the rhombs. Its full panel is the Cipher B indicator.
Right of the candle
- Ribbon reversal threshold — an orange dotted line with a tag. If the current candle closes beyond it, the 11-bar and 34-bar averages become equal and the ribbon changes colour. A wick poking through does not count. This is not an entry signal, it is the place where the ribbon will turn. If the threshold is farther than three typical moves, there is no line — only the tag.
- Typical move per trade — a grey dotted line above and below the price. This is how far the close usually travels during a trade. It is a measure of distance, not a level.
Hints
Click a mark or the ribbon to see a plate: what this element is, what it is made of and what to do with it (a coloured dot and "CALL", "PUT" or "Wait"). The plate stays until you click elsewhere. To make it appear on a simple mouse hover too, turn on "Show the explanation on hover" in the "Panel view" section — it is off at the start. Under the line in a pinned plate is the state of the last bar: which way the ribbon is turned, where the price is, how far the reversal is, what the waves and RSI are doing, when the last mark was.
Three views
The "What to show" switch in the "Panel view" section.
| View | What you see |
|---|---|
| Ribbon | The ribbon, the reversal circles and the ribbon reversal threshold. No other marks |
| Signals | The ribbon and rare marks: triangles, the "blood diamond", the yellow cross. This is the starting setup |
| All | Frequent marks too: crosses, rhombs, candle rhombs above the ribbon — and the typical move per trade |
The view changes only the picture. The strategy builder sees all events in any view.
Events for strategies
In the "Strategies" window the Cipher A events are listed with the prefix "Cipher A:". For an event with a side, CALL and PUT are the trade direction; events without a side are only good as a confirmation — an "and at the same time…" condition.
| Event | When it fires | Side |
|---|---|---|
| ribbon turned | The ribbon changed colour — the same bar as the circle | Up — CALL, down — PUT |
| ribbon side | How the ribbon is turned now, without requiring a fresh turn | Blue — CALL, grey — PUT |
| fast averages diverged | The two fastest averages crossed — the cross | Up — CALL, down — PUT |
| continuation (triangle) | The 11-bar average crossed the 15-bar average | Up — CALL, down — PUT |
| waves crossed (rhomb) | The fast WaveTrend wave crossed the slow one | Up — CALL, down — PUT |
| "blood diamond" | A wave cross coincided with a cross on the same bar | Up — CALL, down — PUT |
| yellow cross | A wave cross at the edge of the scale: down with very low RSI, up with very high | Up — CALL, down — PUT |
| candle above or below the ribbon | The ochre rhomb: a calm continuation beyond the ribbon | Above — CALL, below — PUT |
| ribbon widened | The ribbon is wider than its own average: the averages diverged, the move is on | None |
| ribbon narrowed | The ribbon is narrower than its own average: the averages came together, a lull | None |
| price far from the ribbon | From the close to the ribbon is farther than the price usually travels in a trade | None |
| price near the ribbon | The close is inside the ribbon or at its edge, no farther than a typical move | None |
| ribbon reversal close | The reversal threshold is closer than a typical move per trade | Ribbon up — PUT, ribbon down — CALL |
In the builder the yellow cross is an ordinary event with a side. On the chart it is a warning, not a signal along the move: if you build an entry rule on it, remember that the move is already running out.
"Ribbon reversal close" is not a reversal, it means the reversal is near. The side of the event is where the ribbon will turn if the price reaches the threshold.
All settings
The settings window opens with the ⚙ icon — on the Cipher A card in the "Indicators" window or in the header of its panel below the chart. If the ribbon is drawn over the candles — with the pencil in its line of the chart legend. Almost every field has a hint on hover.
While a strategy with Cipher A is running, the panel on the chart uses that strategy's settings, not the window's: the panel header says so.
How to read
The first section of the window is a reminder of the marks, the same as the tables above. It has no settings.
Panel view
| Field | What it does |
|---|---|
| What to show | The view: "Ribbon", "Signals" or "All" |
| Explain elements on hover and click | The main switch for the plates. Off — no explanations at all |
| Show the explanation on hover | The plate follows the mouse. Off at the start: the plate gets in the way of the candles, and a click on an element works without it |
| Add the state to the plate | Lines about the last bar under the explanation. Works only while explanations are on |
Ribbon
| Field | What it does |
|---|---|
| Show the ribbon | Hides all eight lines and fills at once |
| Fill the gaps | The fill between the lines |
| EMA 1, bars | The fastest line. Its cross with EMA 2 gives the cross mark |
| EMA 2, bars | The main line of the ribbon: EMA 1 (cross), EMA 3 (triangle) and EMA 8 (ribbon colour and circles) are compared with it |
| EMA 3, bars | Its cross with EMA 2 is marked with a triangle |
| EMA 4 – EMA 7, bars | The middle of the ribbon. They do not take part in marks and are needed for the picture |
| EMA 8, bars | The slowest line, the far edge of the ribbon. Together with EMA 2 it sets the ribbon colour, the circles and the "candle above the ribbon" condition |
The starting values are 5, 11, 15, 18, 21, 24, 28 and 34 bars. Shorter averages put the ribbon closer to the price: it turns earlier and gives more marks. Longer ones do the opposite.
WaveTrend waves
The oscillator is a helper here: it is not drawn on the chart and only decides where the rhombs appear. So these fields change the rhomb positions, not the ribbon.
| Field | What it does |
|---|---|
| Show rhombs | The wave cross rhombs |
| Channel length | Over how many bars the average deviation of the price is calculated |
| Averaging length | Smoothing of the fast wave |
| Slow wave length | An average of the fast wave. Their cross is the rhomb |
RSI and the RSI+MFI area
Two series that are not drawn either: only the yellow cross needs them. Despite the name, the RSI+MFI area has no volume in it: it is a smoothed share of the candle body in its range.
| Field | What it does |
|---|---|
| RSI length | Over how many bars RSI is calculated |
| RSI+MFI area period | How many bars the area needs to warm up. There is no yellow cross before that. The starting value is 30 — less than the ribbon needs, so the cross works right after you switch the asset |
| Area multiplier | The scale of the series. The yellow cross threshold is set in the same units, so change them as a pair |
Yellow cross
The thresholds are set for the down mark. The up mark mirrors them, so one setting covers both sides.
| Field | What it does |
|---|---|
| Show the yellow | The mark itself |
| Near wave boundary | The wave must be no higher than this value |
| Far wave boundary | And not lower than minus this value: a dip that is too deep no longer counts as a signal |
| Upper RSI boundary | RSI must be below this value. For the up mark — 100 minus this number |
| Lower RSI boundary | And above this value. For the up mark — also 100 minus this number |
| RSI+MFI area threshold | The area must be below minus this value, for the up mark — above plus |
Other marks
| Field | What it does |
|---|---|
| Ribbon reversal circles | |
| marks | Crosses of the fast averages |
| Triangles | |
| "Blood diamond" | The large dark rhomb |
| Candle above the ribbon | Ochre rhombs |
| Marks in both directions | Untick it and crosses, rhombs, the "blood diamond" and the yellow cross remain only downwards, while the triangle and the candle above the ribbon remain only upwards. The strategy builder always sees both sides |
Right of the candle
| Field | What it does |
|---|---|
| Ribbon reversal threshold | The orange dotted line on the right |
| Typical move per trade | The grey dotted line above and below the price, in the "All" view |
| Tags on the right | Captions: how many points from the price to the threshold and what the typical move per trade is |
| Expiry, bars | Trade length in bars. On M1 a bar is a minute: 3 is a three-minute trade. Distances to the ribbon and to the threshold are compared with it |
| Typical move — over how many bars | Over how many recent bars the typical move is calculated. Fewer — adapts to the market faster, but jumps more |
Set "Expiry, bars" to the same time as the trades in your strategy. Otherwise the "typical move per trade" and the events "price far from the ribbon" and "ribbon reversal close" will measure someone else's length.
Presets
Ready-made settings with one button. A preset sets all calculation parameters anew and leaves the view and colours alone.
| Preset | What it sets |
|---|---|
| 1-min trade | The typical move over one bar |
| 3-min trade | Over three bars — the starting setup |
| 5-min trade | Over five bars: the move per trade is larger, the ribbon threshold is closer in moves |
| Short ribbon | Averages over 3–20 bars: the ribbon is closer to the price, more marks |
| Long ribbon | Averages over 8–51 bars: the ribbon is farther from the price, fewer marks |
Legend
All panel colours in one list: what is drawn in which colour and what it means. Each colour can be changed. Here is also the button that returns all indicator settings to the starting ones.
What Cipher A does not do
- It does not know the future. Every mark describes what has already happened on closed candles. No mark on its own says where the price will go.
- It does not enter trades by itself. Marks are only a picture. Trades are opened by the strategy you built in the "Strategies" window.
- It does not redraw the past. A mark on a closed candle stays where it is. Until the candle closes, the reversal threshold may move with the price.
- It does not look at volume. Volume on the platform means ticks: how many times the price changed during the candle, not the volume of trades. The RSI+MFI area is calculated from the candles themselves.
Frequently asked questions
Why is the ribbon grey and not red? Grey means "the ribbon is not working upwards". It is a background, not a sell signal.
Why does the circle come so late? The circle is a turn of the whole ribbon, and the slow average needs time. The early signs of the same turn are the cross and the rhomb.
Where did the crosses and rhombs go? You see them only in the "All" view. The "Signals" view keeps the rare marks.
How are Cipher A rhombs different from Cipher B rhombs? Almost not at all: it is the same oscillator with a different smoothing of the fast wave. Cipher B draws it in full, here you see it only through the rhombs.
I changed a setting, but the marks on the chart are the same. If a strategy with Cipher A is running, the panel uses its settings. Stop the strategy or change the settings inside it.
What's next
- Cipher B — the same momentum as a whole panel, with levels and divergences.
- The "Indicators" window — how to turn on, show and remove an indicator.
- Strategies — the builder — how to build a rule from events.