Launch Pad Detection

Overview

Launch Pad detection identifies consolidation zones where multiple moving averages converge within tight ranges. These zones often precede significant price moves, making them ideal entry points for swing and position trades.

Credit: Ray from Trader Lion

Types of Launch Pads

Swing Launch Pad

Condition: 5, 10, and 20 EMAs all within 3.5% of each other

Formula:

five_diff = (close - five_dema) / close
ten_diff = (close - ten_dema) / close
twenty_diff = (close - twenty_dema) / close

swing_launch_pad = math.abs(five_diff) < 0.035 and 
                   math.abs(ten_diff) < 0.035 and 
                   math.abs(twenty_diff) < 0.035

Purpose: Identifies short-term consolidation before swing moves (5-8 days)

Position Launch Pad

Condition: 50 SMA, 10 EMA, and 20 EMA all within 3% of each other

Formula:

fifty_diff = (close - fifty_dsma) / close
ten_diff = (close - ten_dema) / close
twenty_diff = (close - twenty_dema) / close

pos_launch_pad = math.abs(fifty_diff) < 0.03 and 
                 math.abs(ten_diff) < 0.03 and 
                 math.abs(twenty_diff) < 0.03

Purpose: Identifies medium-term consolidation before position moves (longer holds)

Visual Display

Table Display

• Location: Top-right table
• Background: User customizable (default: Navy)
• Text: White
• Row: Shows when launch pad condition is met
• Label: “Swing Launch Pad” or “Position Launch Pad”

Display Format

The display shows detailed moving average information with the following format:

With Prices Enabled (Default)

Swing Launch Pad: ✓ 5 EMA:93932.51|10 EMA:93637.40|20 EMA:92551.01 (1.47%)

Position Launch Pad: ✓ 10 EMA:93637.40|20 EMA:92551.01|50 SMA:90303.16 (2.49%)

With Prices Disabled

Swing Launch Pad: ✓ 5 EMA|10 EMA|20 EMA (1.47%)

Position Launch Pad: ✓ 10 EMA|20 EMA|50 SMA (2.49%)

Display Components

• ✓ Checkmark: Indicates launch pad condition is active (true)
• MA Labels: Shows moving average type and period (5 EMA, 10 EMA, 20 EMA, 50 SMA)
• MA Values: Actual moving average prices (when enabled)
• Spread %: Total percentage spread between outermost moving averages
• Background Color: User customizable for visual preference

Configuration Options

• Show Launch Pad Detection: Toggle launch pad feature on/off
• Show Launch Pad Prices: Toggle display of actual MA values (default: true)
• Launch Pad Background Color: Customize background color for launch pad rows

Display Logic

• Only shows when show_launch_pad is enabled
• Displays both types if conditions are met
• Shows checkmark (✓) when condition is active
• MA order: Position Launch Pad shows 10 EMA → 20 EMA → 50 SMA

Trading Applications

Entry Strategy

1. Wait for Launch Pad: Don’t enter until launch pad forms
2. Watch for Breakout: Price breaking out of launch pad zone
3. Volume Confirmation: Look for volume increase on breakout
4. Structure Alignment: Combine with 21 EMA structure for best setups

Position Sizing

• Swing Launch Pad: Standard position size (5-8 day holds)
• Position Launch Pad: Larger position size (longer holds)

Risk Management

• Stop Placement: Below launch pad zone
• Target: Measure move from launch pad to next resistance
• Time Stop: If no move after X days, consider exit

Best Practices

1. Patience: Wait for launch pad to form - don’t force entries
2. Volume: Require volume confirmation on breakout
3. Structure: Best when launch pad aligns with 21 EMA structure
4. Market Context: Launch pads work best in trending markets
5. Multiple Confirmations: Combine with other indicators

Technical Details

Moving Averages Used

• 5 EMA: ta.ema(close, 5)
• 10 EMA: ta.ema(close, 10)
• 20 EMA: ta.ema(close, 20)
• 50 SMA: ta.sma(close, 50)

Percentage Calculation

• Uses percentage difference from close price
• Absolute value to check both above and below
• Threshold: 3.5% for swing, 3% for position

Related Documentation

• Main Dashboard Documentation
• 21 EMA Structure Indicator
• Top Right Table Dashboard