Livermore 5-Step Trade Dashboard [t2make]█ OVERVIEW
Jesse Livermore — arguably the greatest stock trader of the 20th century — never entered a trade on impulse. In "How to Trade in Stocks" (1940), he outlined a disciplined, top-down checklist that filtered out noise and kept him on the right side of the market.
This indicator translates Livermore's 5-step pre-trade test into a real-time, on-chart dashboard that automatically evaluates both LONG and SHORT setups simultaneously and tells you which direction has the stronger case — or tells you to sit on your hands.
No manual switching. No guessing. The market speaks, and the dashboard listens.
█ THE 5 STEPS
① MARKET TREND — "There is a time to go long, a time to go short, and a time to go fishing."
Compares fast/slow EMAs on your chosen market index (default: SPY). If the general market isn't trending in a clear direction, there's no trade. Period.
② SECTOR TREND — "Stocks move in groups. You must know which group your stock belongs to."
Checks whether the sector ETF (XLK, XLF, XLE, etc.) is confirming the broader trend. Livermore never fought the group.
③ STOCK ACTION — "The stock must be acting right."
The individual stock must be trending (EMA alignment) AND showing above-average volume. Trend without conviction is just drift.
④ PIVOTAL TIMING — "The pivotal point is where the money is made."
Price must be at or near a pivot high (for longs) or pivot low (for shorts), confirmed by RSI momentum. This is Livermore's famous "line of least resistance" — enter only when the stock is ready to move.
⑤ RISK MANAGEMENT — "Always define your risk before entering a trade."
ATR-based stop-loss, position risk as a percentage, and minimum reward-to-risk ratio. If the math doesn't work, the trade doesn't happen.
█ AUTO DIRECTION
This is the key differentiator. The script scores all 5 steps for both Long AND Short independently, then:
• The side with more passing steps wins
• If tied, the side aligned with the market trend (Step 1) takes priority
• If neither side scores, the dashboard shows "— NONE" — stay flat
The bottom row always displays both scores side by side (e.g., ▲ L 4/5 vs ▼ S 1/5) so you can see the full picture at a glance.
█ DASHBOARD SIGNALS
✅ GO TRADE — 5/5 steps pass. This is your green light.
⚠ ALMOST — 4/5 steps pass. One condition away — watch closely.
⏳ WATCH — 3/5 steps pass. Setup is forming but not ready.
🚫 NO TRADE — Below 3/5. Stay out.
On-chart markers:
🟢 Green ▲ below bar = Long 5/5 triggered
🔴 Red ▼ above bar = Short 5/5 triggered
🟡 Yellow ◆ = 4/5 (almost ready)
Subtle background tint when all 5 pass
█ HOW TO USE
1. Add the indicator to any stock or ETF chart
2. In settings, set your Market Index (SPY, QQQ, etc.) and Sector ETF to match your stock's sector
3. The dashboard does the rest — auto-detects direction and scores each step
4. Only trade when you see 5/5 PASS
5. Use the calculated Stop and Target levels as starting points for your trade plan
6. Set alerts for 5/5 and 4/5 triggers to get notified across your watchlist
Sector ETF reference: XLK (Tech), XLF (Financials), XLE (Energy), XLV (Healthcare), XLI (Industrials), XLP (Consumer Staples), XLU (Utilities), XLB (Materials), XLRE (Real Estate), XLC (Communications), XLY (Consumer Discretionary)
█ SETTINGS
Dashboard: Position (4 corners), Size (S/M/L), toggle EMAs and levels on/off
Step 1: Market symbol, fast/slow EMA periods
Step 2: Sector ETF symbol, EMA period
Step 3: Stock fast/slow EMA, volume surge multiplier, volume avg period
Step 4: Pivot lookback, RSI toggle, RSI period and OB/OS thresholds
Step 5: Max risk %, min R:R ratio, ATR period and multiplier
█ LIMITATIONS
• This is a checklist tool, not a signal generator — it tells you WHEN conditions align, not WHERE to enter tick-by-tick
• Works best on daily timeframe with stocks and ETFs that have reliable volume data
• Sector ETF must be set manually to match the stock you're analyzing
• Crypto and forex pairs may need adjusted parameters since they lack traditional sector groupings
• Past alignment of all 5 steps does not guarantee future results
█ NOTES
This indicator is inspired by Livermore's principles but is an interpretation, not a literal recreation. Livermore traded in an era before EMAs and RSI existed — he used price action and tape reading. The underlying logic, however, is the same: confirm the market, confirm the group, confirm the stock, wait for the pivot, and define your risk.
"It was never my thinking that made the big money for me. It always was my sitting." — Jesse Livermore
Follow @t2make on X for updates, new indicators, and trade ideas.
Pine Script® 인디케이터






















