Signal filtering is the most critical skill for maximizing GAIN OPTIMIZER's performance. Proper filters can increase your win rate from 65% to 80%+ by eliminating low-probability setups.
1. Filter System Overview
GAIN OPTIMIZER uses a multi-layered filtering system. Each filter acts as a "checkpoint" that signals must pass before appearing on your chart.
📸 Screenshot: Filter System Flowchart
The 5 Core Filters
| Filter | Purpose | Impact | Setting Location |
|---|---|---|---|
| Minimum Confluence | Ensure multiple confirmations | High | Filters → Minimum Confluence Score |
| Trend Direction | Trade with the trend only | Very High | Filters → Filter by Trend |
| ADX Strength | Avoid ranging markets | Critical | Filters → ADX Threshold |
| Support/Resistance | Trade near key levels | Medium | Filters → Use Support/Resistance |
| Anti-Overtrading | Prevent signal spam | High | Automatic (5-bar minimum) |
⚠️ Critical Concept
More filters ≠ Better results!
Over-filtering can eliminate valid signals. The goal is to find the optimal balance between signal quality and signal quantity for your timeframe and style.
2. Minimum Confluence Score Filter
The confluence score measures how many of the 7 technical factors align for a signal. This is your primary quality control.
Understanding Confluence Scores
The 7 factors scored:
- RSI oversold/overbought with momentum confirmation
- MACD crossover above/below zero line
- Price above/below EMA with 2-bar momentum
- EMA alignment (fast > slow for BUY, fast < slow for SELL)
- Near support/resistance level (if enabled)
- Bullish/bearish price structure (higher lows/lower highs)
- Multi-timeframe alignment
Optimal Settings by Timeframe
| Timeframe | Recommended Score | Signals/Day | Win Rate | Trade Style |
|---|---|---|---|---|
| M5 | 5/7 | 20-30 | 72-75% | Scalping |
| M5 | 6/7 | 8-12 | 78-82% | Selective scalping |
| M15 | 4/7 | 15-25 | 68-72% | Active day trading |
| M15 | 5/7 | 8-12 | 75-78% | Standard day trading (recommended) |
| H1 | 5/7 | 3-6 | 78-82% | Swing trading |
| H1 | 6/7 | 1-3 | 82-85% | High-conviction only |
Setting the Confluence Score
- Open GAIN OPTIMIZER settings (gear icon)
- Go to Filters section
- Find "Minimum Confluence Score"
- Adjust slider or input value (1-7)
- Click Apply
min_confluence = input.int(5, "Minimum Confluence Score",
minval=1, maxval=7,
group="Filters")
buy_signal = buy_score >= min_confluence
sell_signal = sell_score >= min_confluence
💡 Pro Tip: Dynamic Confluence
Adjust based on market conditions:
- Volatile markets (NFP, CPI): Increase to 6/7 (quality over quantity)
- Quiet Asian session: Reduce to 4/7 (more opportunities)
- Trending days: Use 5/7 (balanced)
- Choppy days: Increase to 6/7 or don't trade
3. Trend Direction Filter
The trend filter is the most powerful filter in GAIN OPTIMIZER. When enabled, it ONLY allows signals in the direction of the Supertrend.
Why This Filter is Critical
✅ With Trend Filter Enabled
- Win rate: 75-80%
- Average profit per trade: +0.5%
- Drawdown: 8-12%
- Signals: 8-12 per day (M15)
❌ With Trend Filter Disabled
- Win rate: 60-65%
- Average profit per trade: +0.3%
- Drawdown: 18-25%
- Signals: 25-35 per day (M15)
How Trend Filter Works
Supertrend Detection:
- Uptrend (Trend = 1): Only BUY signals allowed
- Downtrend (Trend = -1): Only SELL signals allowed
- Neutral: No signals (transition period)
Enabling Trend Filter
- Settings → Filters
- Check "Filter by Trend"
- Signal Detection will now respect Supertrend direction
📸 Screenshot: Trend Filter ON vs OFF Comparison
💡 When to Disable Trend Filter
Only disable if:
- You're an experienced counter-trend trader
- You're using very tight stops (< 0.3%)
- You're scalping M1-M5 and want maximum signals
- You have a manual strategy for ranging markets
For 90% of traders: KEEP IT ENABLED!
4. ADX Strength Filter
ADX (Average Directional Index) measures trend STRENGTH, not direction. This filter prevents trading during choppy, ranging conditions.
Understanding ADX Values
| ADX Range | Market State | Trading Decision | Signal Quality |
|---|---|---|---|
| 0-20 | Very weak/ranging | ❌ Don't trade | Poor (40-50% win rate) |
| 20-25 | Weak trend forming | ⚠️ Cautious | Fair (60-65% win rate) |
| 25-40 | Strong trend | ✅ Trade actively | Good (75-80% win rate) |
| 40-60 | Very strong trend | ✅ Ideal conditions | Excellent (80-85% win rate) |
| 60+ | Extreme trend | ⚠️ Nearing exhaustion | Variable (watch for reversal) |
Optimal ADX Thresholds
By Timeframe
- M5 (Scalping): ADX ≥ 20
- M15 (Day Trading): ADX ≥ 22
- M30: ADX ≥ 23
- H1 (Swing): ADX ≥ 25
- H4+: ADX ≥ 25-30
Setting ADX Threshold
- Settings → Filters
- Find "ADX Threshold"
- Enter your desired minimum (default: 25)
- Click Apply
adx_threshold = input.float(25, "ADX Threshold",
minval=10, maxval=50, step=5,
group="Filters")
// Signal only generated if ADX above threshold
strong_trend = adx > adx_threshold
buy_signal = buy_conditions AND strong_trend
sell_signal = sell_conditions AND strong_trend
⚠️ Common Mistake
Setting ADX too high: If you set ADX threshold to 35+, you'll miss many valid signals. Only very trending markets will qualify, and you'll get 1-2 signals per day max.
Recommendation: Stick with 22-25 for M15, adjust slightly for other timeframes.
5. Support/Resistance Filter
When enabled, signals must occur near identified support/resistance levels for increased probability.
How S/R Filter Works
GAIN OPTIMIZER identifies S/R levels by:
- Looking back 100 bars (default)
- Finding highest high (resistance)
- Finding lowest low (support)
- Checking if current price is within 0.5% of these levels
Signal requirements with S/R enabled:
- BUY signals: Must be within 0.5% of support
- SELL signals: Must be within 0.5% of resistance
When to Use S/R Filter
| Scenario | Enable S/R? | Reason |
|---|---|---|
| Ranging market | ✅ Yes | Trade bounces from levels |
| Strong trend | ❌ No | Price breaks through levels easily |
| Consolidation after trend | ✅ Yes | Levels are respected |
| Scalping M5 | ❌ No | Too restrictive, miss opportunities |
| Swing H1+ | ✅ Yes | Better entries at key levels |
Enabling S/R Filter
- Settings → Filters
- Check "Use Support/Resistance"
- Set "S/R Lookback Period" (default: 100)
- Optional: Enable "Show Support/Resistance" in Display to see lines
💡 Pro Configuration
Lookback period recommendations:
- M5: 50-80 bars (4-6 hours)
- M15: 80-120 bars (20-30 hours)
- H1: 100-200 bars (4-8 days)
- H4: 100-150 bars (2-3 weeks)
6. Anti-Overtrading Protection
GAIN OPTIMIZER includes automatic anti-overtrading filter that prevents signal spam. This is ALWAYS active and cannot be disabled (for your protection).
How It Works
// Minimum bars between signals
int min_bars_between_signals = 5
// Track last signal
var int last_signal_bar = 0
// Check if enough bars have passed
bool can_signal = bar_index - last_signal_bar >= 5
// Only generate signal if spacing requirement met
buy_signal = buy_conditions AND can_signal
sell_signal = sell_conditions AND can_signal
What this means:
- After a BUY signal, no new signals for at least 5 bars
- After a SELL signal, no new signals for at least 5 bars
- Prevents "signal clustering" during volatility spikes
- Forces you to wait for setup to develop
Time Spacing by Timeframe
| Timeframe | Minimum Spacing | Real Time |
|---|---|---|
| M5 | 5 bars | 25 minutes |
| M15 | 5 bars | 1 hour 15 minutes |
| M30 | 5 bars | 2 hours 30 minutes |
| H1 | 5 bars | 5 hours |
✅ Benefits of Anti-Overtrading
- Prevents emotional trading during volatile events
- Reduces trading costs (spreads/commissions)
- Improves average trade quality
- Protects account during whipsaws
- Enforces discipline automatically
7. Filter Optimization by Timeframe
Different timeframes require different filter configurations. Here are battle-tested setups for each style.
M5 Scalping Configuration
Aggressive Scalper (High Volume)
Minimum Confluence: 5/7
Filter by Trend: ✓ Enabled
ADX Threshold: 20
Use S/R: ✗ Disabled
Multi-Timeframe: ✓ Enabled (M15, M30)
Expected: 20-30 signals/day
Win Rate: 72-75%
Selective Scalper (High Quality)
Minimum Confluence: 6/7
Filter by Trend: ✓ Enabled
ADX Threshold: 22
Use S/R: ✗ Disabled
Multi-Timeframe: ✓ Enabled (M15, M30)
Expected: 8-12 signals/day
Win Rate: 78-82%
M15 Day Trading Configuration
Balanced Day Trader (Recommended)
Minimum Confluence: 5/7
Filter by Trend: ✓ Enabled
ADX Threshold: 22
Use S/R: ✗ Disabled
Multi-Timeframe: ✓ Enabled (M30, H1)
Expected: 8-12 signals/day
Win Rate: 75-78%
Conservative Day Trader
Minimum Confluence: 6/7
Filter by Trend: ✓ Enabled
ADX Threshold: 25
Use S/R: ✓ Enabled (Lookback: 100)
Multi-Timeframe: ✓ Enabled (M30, H1)
Expected: 3-6 signals/day
Win Rate: 80-85%
H1 Swing Trading Configuration
Standard Swing Trader
Minimum Confluence: 5/7
Filter by Trend: ✓ Enabled
ADX Threshold: 25
Use S/R: ✓ Enabled (Lookback: 150)
Multi-Timeframe: ✓ Enabled (H2, H4)
Expected: 3-6 signals/day
Win Rate: 78-82%
High-Conviction Swing
Minimum Confluence: 6/7
Filter by Trend: ✓ Enabled
ADX Threshold: 27
Use S/R: ✓ Enabled (Lookback: 200)
Multi-Timeframe: ✓ Enabled (H2, H4)
Expected: 1-3 signals/day
Win Rate: 82-87%
Testing and Optimization Process
Step-by-Step Filter Optimization
- Start with defaults: Confluence 5/7, Trend ON, ADX 25
- Backtest 1 month: Note win rate, signals/day, max drawdown
- Adjust ONE filter: Increase confluence to 6/7
- Backtest again: Compare results
- Keep if improved: Higher win rate OR lower drawdown
- Repeat: Test ADX adjustment
- Document: Keep notes of what works for your style
⚠️ Optimization Mistakes to Avoid
- Curve-fitting: Don't optimize to past data only
- Too many filters: Will eliminate all signals
- Changing constantly: Give settings 2-4 weeks before adjusting
- Ignoring drawdown: Win rate isn't everything
- No documentation: Keep a trading journal of what works
What You've Learned
🎓 Key Takeaways
- ✅ 5 core filters control signal quality
- ✅ Confluence score: Most important filter (5-6/7 optimal)
- ✅ Trend filter: Keep enabled for 75-80% win rate
- ✅ ADX filter: Prevents trading in ranges (22-25 threshold)
- ✅ S/R filter: Use for swing trading, not scalping
- ✅ Anti-overtrading: Automatic 5-bar minimum spacing
- ✅ Different timeframes need different configurations
- ✅ Test and document your optimal settings
💡 Next Steps
Now that you understand filters:
- Tutorial: Multi-Timeframe Strategy - Combine timeframes for better confluence
- Tutorial: Backtesting Basics - Test your filter settings
- Tutorial: Risk Management System - Position sizing with filtered signals