Methodology & Limitations

ALGO SIGNAL AI is a rule-based Smart Money Concepts (SMC) analysis engine, scoped first to XAUUSD (spot gold). Given a series of OHLC candles, it deterministically evaluates market structure, liquidity, imbalance, and premium/discount context, then combines those readings into a single confluence score from −100 to 100. It does not use machine learning, does not access any live market-data feed, and does not place or recommend trades on your behalf.

• Market structure & BOS. The last few swings are compared against the most recent close to determine a short-term bias and whether a break of structure occurred.
• CHoCH. Confirmed pivot highs/lows are tracked to detect a change of character when price closes beyond the most recent opposing swing.
• Liquidity sweeps & equal highs/lows. Recent ranges are checked for stop-hunt style sweeps above prior highs or below prior lows, and for tight equal-high/low clusters that suggest resting liquidity.
• Fair value gaps & order blocks. Three-candle imbalances and the last opposing candle before a strong displacement move are flagged as FVGs and order blocks respectively.
• Premium/discount & OTE. A dealing range is drawn between the latest confirmed swing high and low; its midpoint (equilibrium) splits price into a premium or discount zone, and the 62%–79% retracement defines the optimal trade entry (OTE) pocket.
• Higher-timeframe alignment. When a higher-timeframe candle series is also supplied, its bias is weighted into the score and checked for agreement with the execution timeframe.

Each factor contributes a fixed weight to the score. A directional signal (BUY/SELL) only fires once the combined score crosses a conservative threshold; otherwise the signal stays NEUTRAL. Confidence is simply the normalized magnitude of that score.

• Live XAUUSD candles use Twelve Data with a server-side Dukascopy fallback; the live tick relay can fail over to JForex.
• The engine is deterministic and rule-based, not machine-learned, backtested, or walk-forward validated.
• Only XAUUSD is supported; other symbols are not evaluated and are marked "Coming Soon" throughout the interface.
• Broker-specific spread/slippage modeling, news-event filters, and position sizing are not implemented.
• The engine never executes trades — there is no broker integration, and none is planned for this MVP.

ALGO SIGNAL AI provides algorithmic market-structure analysis for informational and educational purposes only. It is not financial advice and does not guarantee any trading outcome. Trading XAUUSD and other leveraged instruments carries a high level of risk and may not be suitable for all investors. Past analysis is not indicative of future results — always perform your own due diligence and manage risk accordingly.