4H Range Scalping Strategy V6

//@version=6
strategy("4H Range Scalping Strategy", overlay=true, initial_capital=1000, default_qty_type=strategy.percent_of_equity, default_qty_value=2, currency=currency.USD)

// ==========================================
// 1. USER INPUTS
// ==========================================
// Risk Management
input_rr = input.float(2.0, "Risk/Reward Ratio", minval=0.1, step=0.1, tooltip="Target profit relative to Stop Loss size.")

// Session Settings
input_start_hour = input.int(0, "Session Start Hour (NY Time)", minval=0, maxval=23, tooltip="Start hour of the first 4H candle (0 = 00:00).")
input_ny_timezone = input.string("America/New_York", "Timezone", options=["America/New_York", "UTC", "Europe/London"])

// Visuals
input_show_range = input.bool(true, "Show Range Lines")
input_color_high = input.color(color.red, "Range High Color")
input_color_low = input.color(color.green, "Range Low Color")

// ==========================================
// 2. TIME MANAGEMENT & RANGE DEFINITION
// ==========================================
// Get current time components in the target timezone
current_hour   = hour(time, input_ny_timezone)
current_minute = minute(time, input_ny_timezone)

// Define the 4-Hour Formation Period
// The strategy relies on the FIRST 4-hour candle of the day.
// If start is 00:00, formation is 00:00 to 03:59.
formation_end_hour = input_start_hour + 4
is_formation_period = (current_hour >= input_start_hour) and (current_hour < formation_end_hour)

// State Variables to store the Range High/Low for the day
var float day_range_high = na
var float day_range_low  = na

// Temporary variables to track High/Low DURING the formation period
var float temp_high = na
var float temp_low  = na

// Detect start of a new day/session to reset variables
is_new_session = (current_hour == input_start_hour) and (current_minute == 0)

if is_new_session
    // Reset everything for the new day
    day_range_high := na
    day_range_low  := na
    temp_high      := high
    temp_low       := low
else if is_formation_period
    // Continuously update the high/low during the first 4 hours
    temp_high := math.max(nz(temp_high, high), high)
    temp_low  := math.min(nz(temp_low, low), low)

// Lock the Range after the formation period ends
// We check if we have just finished the formation period
if not is_formation_period and na(day_range_high) and not na(temp_high)
    day_range_high := temp_high
    day_range_low  := temp_low

// ==========================================
// 3. STRATEGY LOGIC & EXECUTION
// ==========================================

// Variables to track Breakout State (Fakeout detection)
var bool is_above_range = false
var bool is_below_range = false
var float breakout_extreme_high = na
var float breakout_extreme_low  = na

// Reset breakout states on new session
if is_new_session
    is_above_range := false
    is_below_range := false
    breakout_extreme_high := na
    breakout_extreme_low  := na

// Only trade if the range is defined and we are outside the formation period
can_trade = not na(day_range_high) and not is_formation_period

// --- Short Setup Logic ---
// 1. Price must be ABOVE range (Breakout)
// 2. Then Price must Close INSIDE range (Re-entry)

if can_trade
    // Check if price is currently above the range
    if close > day_range_high
        is_above_range := true
        // Track the highest point reached during this breakout
        breakout_extreme_high := math.max(nz(breakout_extreme_high, high), high)
    
    // Check for Re-entry (Signal)
    else if is_above_range and close < day_range_high
        // CONDITION MET: Breakout High -> Closed Back Inside
        
        // Update extreme one last time for the current signal candle
        float final_sl_price = math.max(nz(breakout_extreme_high, high), high)
        float entry_price = close
        float risk = final_sl_price - entry_price
        float target_price = entry_price - (risk * input_rr)

        // Execute Short
        if risk > 0
            strategy.entry("Short", strategy.short, comment="Re-entry Short")
            strategy.exit("Exit Short", "Short", stop=final_sl_price, limit=target_price)
        
        // Reset state
        is_above_range := false
        breakout_extreme_high := na

// --- Long Setup Logic ---
// 1. Price must be BELOW range (Breakout)
// 2. Then Price must Close INSIDE range (Re-entry)

if can_trade
    // Check if price is currently below the range
    if close < day_range_low
        is_below_range := true
        // Track the lowest point reached during this breakout
        breakout_extreme_low := math.min(nz(breakout_extreme_low, low), low)
    
    // Check for Re-entry (Signal)
    else if is_below_range and close > day_range_low
        // CONDITION MET: Breakout Low -> Closed Back Inside
        
        // Update extreme one last time
        float final_sl_price = math.min(nz(breakout_extreme_low, low), low)
        float entry_price = close
        float risk = entry_price - final_sl_price
        float target_price = entry_price + (risk * input_rr)

        // Execute Long
        if risk > 0
            strategy.entry("Long", strategy.long, comment="Re-entry Long")
            strategy.exit("Exit Long", "Long", stop=final_sl_price, limit=target_price)
        
        // Reset state
        is_below_range := false
        breakout_extreme_low := na

// ==========================================
// 4. VISUALIZATION
// ==========================================
// Plot Range Lines
plot(input_show_range and not is_formation_period ? day_range_high : na, "Range High", color=input_color_high, style=plot.style_linebr, linewidth=2)
plot(input_show_range and not is_formation_period ? day_range_low : na, "Range Low", color=input_color_low, style=plot.style_linebr, linewidth=2)

// Highlight Formation Period Background
bgcolor(is_formation_period ? color.new(color.blue, 90) : na, title="Formation Period")

// Plot Signals
plotshape(series=not is_above_range[1] and is_above_range, title="Breakout High Started", location=location.abovebar, color=color.new(color.red, 80), style=shape.triangledown, size=size.tiny)
plotshape(series=not is_below_range[1] and is_below_range, title="Breakout Low Started", location=location.belowbar, color=color.new(color.green, 80), style=shape.triangleup, size=size.tiny)