CCI based support and resistance strategy
WARNING:
Commissions and slippage has not been considered! Don’t take it easy adding commissions and slippage could turns a fake-profitable strategy to a real disaster.
We consider account size as 10k and we enter 1000 for each trade.
Less than 100 trades is too small sample community and it’s not reliable, Also the performance of the past do not guarantee future performance. This result was handpicked by author and will differ by other timeframes, instruments and settings.
*PLEASE SHARE YOUR SETTINGS THAT WORK WITH THE COMMUNITY.
Introduction:
The CCI-based dynamic support and resistance is a "Bands and Channels" kind of indicator consisting an upper and lower band. This is a strategy which uses CCI-based (Made by me) indicator to execute trades.
SL and TP are calculated based on max ATR during last selected time period. You can edit strategy settings using "Ksl", "Ktp" and the other button for time period. “KSL” and “KTP” are 2.5 and 5 by default.
Bands are calculated regarding CCI previous high and low pivot. CCI length, right pivot length and left pivot length are 50.
A dynamic support and resistance has been calculated using last upper-cci minus a buffer and last lower-cci plus the buffer. The buffer is 10.
If "Trend matter?" button is on you can detect trend by color of the upper and lower line. Green is bullish and red is bearish! "Trend matter?" is on.
The "show mid?" button makes mid line visible, which is average of upper and lower lines, visible. The button is not active by default.
Reaction to the support could be a buy signal while a reaction to the resistance could interpreted as a sell signal.
How this strategy work?
Donald Lambert, a technical analyst, created the CCI, or Commodity Channel Index, which he first published in 1980. CCI is calculated regarding CCI can be used both as trend-detector or an oscillator. As an oscillator most traders believe in static predefined levels. Overbought and oversold candles which are clear in the chart could be used as sell and buy signals.
During my trading career I’ve noticed that there might be some reversal points for the CCI. I believe CCI could have to potential to reverse more from lately reversal point. Of course, just like other trading strategies we are talking about probabilities. We do not expect a win trade each time.
On price chart
Now this the question! What price should the instrument reach that CCI turns to be equal to our reversing aim for CCI? Imagine we have found last important bearish reversal of CCI in 200. Now, if we need the CCI to be 200 what price should we wait for?
How to calculate?
This is the CCI formula:
CCI = (Typical Price - SMA of TP) / (0.015 x Mean Deviation)
Where, Typical Price (TP) = (High + Low + Close)/3
For probable reversing points, high and low pivots of 50 bars have been used.
So we do have an Upper CCI and a Lower CCI. They are valid until the next pivot is available.
By relocating factors in CCI formula you can reach the “Typical Price”.
“
Typical Price = CCI (0.015 * Mean Deviation) + SMA of TP
So we could have a Support or Resistance by replacing CCI with Upper and Lower CCI.
A buy signal is valid if the trend is bullish (or “trend matter” is off) and lowest low of last 2 candles is lower than support and close is greater than both support and open.
A Sell signal is produced in opposite situation.
There are 2+1 options for trend!
Trend matter box is on by default, which means we’ll just open trades in direction of the trend. It’s available to turn it off.
Other 2 options are cross and slope. Cross calculated by comparing fast SMA and slow SMA. The slope one differentiate slow SMA to last “n” one.
Considering last day and today highest ATR as the ATR to calculating SL and TP is our unique technique.
Bandas y canales
TrailingTakeProfit exampleQuite recently I came upon a concept of Trailing Take Profit and I couldn't find a PineScript which implements it for the fastest possible execution, so here it is :)
Everybody knows Trailing StopLoss - an invisible mechanism follows the price and exits the trade once the price retreats too much from its recent most extended favourable value. Trailing TakeProfit does the similar thing, but at the opposite end - the trade gets closed if a price moves too well, in too favourable extent.
Why close the trade if it is going so good? Well, whatever goes up, must go down and vice versa. It is expected, that after fast rally a market will soon fall and after a dump it will go up. So Trailing TakeProfit's role is to secure profits.
But how does Trailing TakeProfit differ from the standard one? "Trailing" means, the exit level is moving. Its role is to be executed only after a rapid favourable move within 1-2 candles, not more. We never know when a rapid move happens, but when it does, we wanna catch those pips and quickly exit without looking back.
Visually Trailing TakeProfit levels are... bands. In this script example these are ATR multiplied bands (aka Keltner Channel), but they could also be Bollinger Bands or something else.
The code is simple just to focus on this single functionality, so you can quickly copy-paste it into your script. Entries are triggered by default SMA crosses.
P.S. I wouldn't be myself, if I didn't add alert messages compatible with the syntax of recently revamped TradingConnector - both in the code already and in the table showing them.
Contrarian DC Strategy - w Entry SL Pause and TrailingStopDonchian Channel Setup:
The strategy uses a tool called the Donchian Channel. Imagine this as two lines (bands) on a chart that show the highest and lowest prices over a certain number of past trading days (default is 20 days).
There's also a centerline, which is the average of these two bands.
Entry Conditions for Trades:
Buying (Going Long): The strategy considers buying when the price touches or falls below the lower band of the Donchian Channel. However, this only happens if there has been a pause after a previous losing trade. This pause is a number of candles where no new trades are taken.
Selling (Going Short): Similarly, the strategy considers selling when price reaches or exceeds the upper band of the Donchian Channel. Again, this is subject to a pause after a losing trade.
Stop Loss and Take Profit:
Each trade has a "Stop Loss" and "Take Profit" set. The Stop Loss is a preset price level where the trade will close to prevent further losses if the market moves against your position. The Take Profit does the same but locks in profit if the market moves in your favor.
The Stop Loss is set based on a percentage of the price at which you entered the trade.
The Take Profit is determined by the Risk/Reward Ratio. This ratio helps balance how much you're willing to risk versus the potential reward.
Trailing Stop Loss:
When a trade is profitable, the strategy should involve a "Trailing Stop Loss." This means the Stop Loss level moves (or trails) the price movement to lock in profits as the market moves in your favor.
For a buy trade, if the price moves above the centerline of the Donchian Channel, the Trailing Stop Loss should be adjusted in the middle between the entry price and the centerline. Viceversa for a sell trade, it should be adjusted in the same way if the price goes below the centerline.
IMPORTANT: There's no allert for the trailing stop at the moment.
Post-Stop Loss Pause:
If a trade hits the Stop Loss (i.e., it's a losing trade), the strategy takes a break before opening another trade in the same direction. This pause helps to avoid entering another trade immediately in a potentially unfavorable market.
In summary, this strategy is designed to make trades based on the Donchian Channel, with specific rules for when to enter and exit trades, and mechanisms to manage risk and protect profits. It's contrarian because it tends to buy when the price is low and sell when the price is high, which is opposite to what many traders might do.
Donchian Quest Research// =================================
Trend following strategy.
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Strategy uses two channels. One channel - for opening trades. Second channel - for closing.
Channel is similar to Donchian channel, but uses Close prices (not High/Low). That helps don't react to wicks of volatile candles (“stop hunting”). In most cases openings occur earlier than in Donchian channel. Closings occur only for real breakout.
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Strategy waits for beginning of trend - when price breakout of channel. Default length of both channels = 50 candles.
Conditions of trading:
- Open Long: If last Close = max Close for 50 closes.
- Close Long: If last Close = min Close for 50 closes.
- Open Short: If last Close = min Close for 50 closes.
- Close Short: If last Close = max Close for 50 closes.
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Color of lines:
- black - channel for opening trade.
- red - channel for closing trade.
- yellow - entry price.
- fuchsia - stoploss and breakeven.
- vertical green - go Long.
- vertical red - go Short.
- vertical gray - close in end, don't trade anymore.
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Order size calculated with ATR and volatility.
You can't trade 1 contract in BTC and 1 contract in XRP - for example. They have different price and volatility, so 1 contract BTC not equal 1 contract XRP.
Script uses universal calculation for every market. It is based on:
- Risk - USD sum you ready to loss in one trade. It calculated as percent of Equity.
- ATR indicator - measurement of volatility.
With default setting your stoploss = 0.5 percent of equity:
- If initial capital is 1000 USD and used parameter "Permit stop" - loss will be 5 USD (0.5 % of equity).
- If your Equity rises to 2000 USD and used parameter "Permit stop"- loss will be 10 USD (0.5 % of Equity).
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This Risk works only if you enable “Permit stop” parameter in Settings.
If this parameter disabled - strategy works as reversal strategy:
⁃ If close Long - channel border works as stoploss and momentarily go Short.
⁃ If close Short - channel border works as stoploss and momentarily go Long.
Channel borders changed dynamically. So sometime your loss will be greater than ‘Risk %’. Sometime - less than ‘Risk %’.
If this parameter enabled - maximum loss always equal to 'Risk %'. This parameter also include breakeven: if profit % = Risk %, then move stoploss to entry price.
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Like all trend following strategies - it works only in trend conditions. If no trend - slowly bleeding. There is no special additional indicator to filter trend/notrend. You need to trade every signal of strategy.
Strategy gives many losses:
⁃ 30 % of trades will close with profit.
⁃ 70 % of trades will close with loss.
⁃ But profit from 30% will be much greater than loss from 70 %.
Your task - patiently wait for it and don't use risky setting for position sizing.
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Recommended timeframe - Daily.
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Trend can vary in lengths. Selecting length of channels determine which trend you will be hunting:
⁃ 20/10 - from several days to several weeks.
⁃ 20/20 or 50/20 - from several weeks to several months.
⁃ 50/50 or 100/50 or 100/100 - from several months to several years.
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Inputs (Settings):
- Length: length of channel for trade opening/closing. You can choose 20/10, 20/20, 50/20, 50/50, 100/50, 100/100. Default value: 50/50.
- Permit Long / Permit short: Longs are most profitable for this strategy. You can disable Shorts and enable Longs only. Default value: permit all directions.
- Risk % of Equity: for position sizing used Equity percent. Don't use values greater than 5 % - it's risky. Default value: 0.5%.
⁃ ATR multiplier: this multiplier moves stoploss up or down. Big multiplier = small size of order, small profit, stoploss far from entry, low chance of stoploss. Small multiplier = big size of order, big profit, stop near entry, high chance of stoploss. Default value: 2.
- ATR length: number of candles to calculate ATR indicator. It used for order size and stoploss. Default value: 20.
- Close in end - to close active trade in the end (and don't trade anymore) or leave it open. You can see difference in Strategy Tester. Default value: don’t close.
- Permit stop: use stop or go reversal. Default value: without stop, reversal strategy.
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Properties (Settings):
- Initial capital - 1000 USD.
- Script don't uses 'Order size' - you need to change 'Risk %' in Inputs instead.
- Script don't uses 'Pyramiding'.
- 'Commission' 0.055 % and 'Slippage' 0 - this parameters are for crypto exchanges with perpetual contracts (for example Bybit). If use on other markets - set it accordingly to your exchange parameters.
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Big dataset used for chart - 'BITCOIN ALL TIME HISTORY INDEX'. It gives enough trades to understand logic of script. It have several good trends.
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Supertrend Advance Pullback StrategyHandbook for the Supertrend Advance Strategy
1. Introduction
Purpose of the Handbook:
The main purpose of this handbook is to serve as a comprehensive guide for traders and investors who are looking to explore and harness the potential of the Supertrend Advance Strategy. In the rapidly changing financial market, having the right tools and strategies at one's disposal is crucial. Whether you're a beginner hoping to dive into the world of trading or a seasoned investor aiming to optimize and diversify your portfolio, this handbook offers the insights and methodologies you need. By the end of this guide, readers should have a clear understanding of how the Supertrend Advance Strategy works, its benefits, potential pitfalls, and practical application in various trading scenarios.
Overview of the Supertrend Advance Pullback Strategy:
At its core, the Supertrend Advance Strategy is an evolution of the popular Supertrend Indicator. Designed to generate buy and sell signals in trending markets, the Supertrend Indicator has been a favorite tool for many traders around the world. The Advance Strategy, however, builds upon this foundation by introducing enhanced mechanisms, filters, and methodologies to increase precision and reduce false signals.
1. Basic Concept:
The Supertrend Advance Strategy relies on a combination of price action and volatility to determine the potential trend direction. By assessing the average true range (ATR) in conjunction with specific price points, this strategy aims to highlight the potential starting and ending points of market trends.
2. Methodology:
Unlike the traditional Supertrend Indicator, which primarily focuses on closing prices and ATR, the Advance Strategy integrates other critical market variables, such as volume, momentum oscillators, and perhaps even fundamental data, to validate its signals. This multidimensional approach ensures that the generated signals are more reliable and are less prone to market noise.
3. Benefits:
One of the main benefits of the Supertrend Advance Strategy is its ability to filter out false breakouts and minor price fluctuations, which can often lead to premature exits or entries in the market. By waiting for a confluence of factors to align, traders using this advanced strategy can increase their chances of entering or exiting trades at optimal points.
4. Practical Applications:
The Supertrend Advance Strategy can be applied across various timeframes, from intraday trading to swing trading and even long-term investment scenarios. Furthermore, its flexible nature allows it to be tailored to different asset classes, be it stocks, commodities, forex, or cryptocurrencies.
In the subsequent sections of this handbook, we will delve deeper into the intricacies of this strategy, offering step-by-step guidelines on its application, case studies, and tips for maximizing its efficacy in the volatile world of trading.
As you journey through this handbook, we encourage you to approach the Supertrend Advance Strategy with an open mind, testing and tweaking it as per your personal trading style and risk appetite. The ultimate goal is not just to provide you with a new tool but to empower you with a holistic strategy that can enhance your trading endeavors.
2. Getting Started
Navigating the financial markets can be a daunting task without the right tools. This section is dedicated to helping you set up the Supertrend Advance Strategy on one of the most popular charting platforms, TradingView. By following the steps below, you'll be able to integrate this strategy into your charts and start leveraging its insights in no time.
Setting up on TradingView:
TradingView is a web-based platform that offers a wide range of charting tools, social networking, and market data. Before you can apply the Supertrend Advance Strategy, you'll first need a TradingView account. If you haven't set one up yet, here's how:
1. Account Creation:
• Visit TradingView's official website.
• Click on the "Join for free" or "Sign up" button.
• Follow the registration process, providing the necessary details and setting up your login credentials.
2. Navigating the Dashboard:
• Once logged in, you'll be taken to your dashboard. Here, you'll see a variety of tools, including watchlists, alerts, and the main charting window.
• To begin charting, type in the name or ticker of the asset you're interested in the search bar at the top.
3. Configuring Chart Settings:
• Before integrating the Supertrend Advance Strategy, familiarize yourself with the chart settings. This can be accessed by clicking the 'gear' icon on the top right of the chart window.
• Adjust the chart type, time intervals, and other display settings to your preference.
Integrating the Strategy into a Chart:
Now that you're set up on TradingView, it's time to integrate the Supertrend Advance Strategy.
1. Accessing the Pine Script Editor:
• Located at the top-center of your screen, you'll find the "Pine Editor" tab. Click on it.
• This is where custom strategies and indicators are scripted or imported.
2. Loading the Supertrend Advance Strategy Script:
• Depending on whether you have the script or need to find it, there are two paths:
• If you have the script: Copy the Supertrend Advance Strategy script, and then paste it into the Pine Editor.
• If searching for the script: Click on the “Indicators” icon (looks like a flame) at the top of your screen, and then type “Supertrend Advance Strategy” in the search bar. If available, it will show up in the list. Simply click to add it to your chart.
3. Applying the Strategy:
• After pasting or selecting the Supertrend Advance Strategy in the Pine Editor, click on the “Add to Chart” button located at the top of the editor. This will overlay the strategy onto your main chart window.
4. Configuring Strategy Settings:
• Once the strategy is on your chart, you'll notice a small settings ('gear') icon next to its name in the top-left of the chart window. Click on this to access settings.
• Here, you can adjust various parameters of the Supertrend Advance Strategy to better fit your trading style or the specific asset you're analyzing.
5. Interpreting Signals:
• With the strategy applied, you'll now see buy/sell signals represented on your chart. Take time to familiarize yourself with how these look and behave over various timeframes and market conditions.
3. Strategy Overview
What is the Supertrend Advance Strategy?
The Supertrend Advance Strategy is a refined version of the classic Supertrend Indicator, which was developed to aid traders in spotting market trends. The strategy utilizes a combination of data points, including average true range (ATR) and price momentum, to generate buy and sell signals.
In essence, the Supertrend Advance Strategy can be visualized as a line that moves with the price. When the price is above the Supertrend line, it indicates an uptrend and suggests a potential buy position. Conversely, when the price is below the Supertrend line, it hints at a downtrend, suggesting a potential selling point.
Strategy Goals and Objectives:
1. Trend Identification: At the core of the Supertrend Advance Strategy is the goal to efficiently and consistently identify prevailing market trends. By recognizing these trends, traders can position themselves to capitalize on price movements in their favor.
2. Reducing Noise: Financial markets are often inundated with 'noise' - short-term price fluctuations that can mislead traders. The Supertrend Advance Strategy aims to filter out this noise, allowing for clearer decision-making.
3. Enhancing Risk Management: With clear buy and sell signals, traders can set more precise stop-loss and take-profit points. This leads to better risk management and potentially improved profitability.
4. Versatility: While primarily used for trend identification, the strategy can be integrated with other technical tools and indicators to create a comprehensive trading system.
Type of Assets/Markets to Apply the Strategy:
1. Equities: The Supertrend Advance Strategy is highly popular among stock traders. Its ability to capture long-term trends makes it particularly useful for those trading individual stocks or equity indices.
2. Forex: Given the 24-hour nature of the Forex market and its propensity for trends, the Supertrend Advance Strategy is a valuable tool for currency traders.
3. Commodities: Whether it's gold, oil, or agricultural products, commodities often move in extended trends. The strategy can help in identifying and capitalizing on these movements.
4. Cryptocurrencies: The volatile nature of cryptocurrencies means they can have pronounced trends. The Supertrend Advance Strategy can aid crypto traders in navigating these often tumultuous waters.
5. Futures & Options: Traders and investors in derivative markets can utilize the strategy to make more informed decisions about contract entries and exits.
It's important to note that while the Supertrend Advance Strategy can be applied across various assets and markets, its effectiveness might vary based on market conditions, timeframe, and the specific characteristics of the asset in question. As always, it's recommended to use the strategy in conjunction with other analytical tools and to backtest its effectiveness in specific scenarios before committing to trades.
4. Input Settings
Understanding and correctly configuring input settings is crucial for optimizing the Supertrend Advance Strategy for any specific market or asset. These settings, when tweaked correctly, can drastically impact the strategy's performance.
Grouping Inputs:
Before diving into individual input settings, it's important to group similar inputs. Grouping can simplify the user interface, making it easier to adjust settings related to a specific function or indicator.
Strategy Choice:
This input allows traders to select from various strategies that incorporate the Supertrend indicator. Options might include "Supertrend with RSI," "Supertrend with MACD," etc. By choosing a strategy, the associated input settings for that strategy become available.
Supertrend Settings:
1. Multiplier: Typically, a default value of 3 is used. This multiplier is used in the ATR calculation. Increasing it makes the Supertrend line further from prices, while decreasing it brings the line closer.
2. Period: The number of bars used in the ATR calculation. A common default is 7.
EMA Settings (Exponential Moving Average):
1. Period: Defines the number of previous bars used to calculate the EMA. Common periods are 9, 21, 50, and 200.
2. Source: Allows traders to choose which price (Open, Close, High, Low) to use in the EMA calculation.
RSI Settings (Relative Strength Index):
1. Length: Determines how many periods are used for RSI calculation. The standard setting is 14.
2. Overbought Level: The threshold at which the asset is considered overbought, typically set at 70.
3. Oversold Level: The threshold at which the asset is considered oversold, often at 30.
MACD Settings (Moving Average Convergence Divergence):
1. Short Period: The shorter EMA, usually set to 12.
2. Long Period: The longer EMA, commonly set to 26.
3. Signal Period: Defines the EMA of the MACD line, typically set at 9.
CCI Settings (Commodity Channel Index):
1. Period: The number of bars used in the CCI calculation, often set to 20.
2. Overbought Level: Typically set at +100, denoting overbought conditions.
3. Oversold Level: Usually set at -100, indicating oversold conditions.
SL/TP Settings (Stop Loss/Take Profit):
1. SL Multiplier: Defines the multiplier for the average true range (ATR) to set the stop loss.
2. TP Multiplier: Defines the multiplier for the average true range (ATR) to set the take profit.
Filtering Conditions:
This section allows traders to set conditions to filter out certain signals. For example, one might only want to take buy signals when the RSI is below 30, ensuring they buy during oversold conditions.
Trade Direction and Backtest Period:
1. Trade Direction: Allows traders to specify whether they want to take long trades, short trades, or both.
2. Backtest Period: Specifies the time range for backtesting the strategy. Traders can choose from options like 'Last 6 months,' 'Last 1 year,' etc.
It's essential to remember that while default settings are provided for many of these tools, optimal settings can vary based on the market, timeframe, and trading style. Always backtest new settings on historical data to gauge their potential efficacy.
5. Understanding Strategy Conditions
Developing an understanding of the conditions set within a trading strategy is essential for traders to maximize its potential. Here, we delve deep into the logic behind these conditions, using the Supertrend Advance Strategy as our focal point.
Basic Logic Behind Conditions:
Every strategy is built around a set of conditions that provide buy or sell signals. The conditions are based on mathematical or statistical methods and are rooted in the study of historical price data. The fundamental idea is to recognize patterns or behaviors that have been profitable in the past and might be profitable in the future.
Buy and Sell Conditions:
1. Buy Conditions: Usually formulated around bullish signals or indicators suggesting upward price momentum.
2. Sell Conditions: Centered on bearish signals or indicators indicating downward price momentum.
Simple Strategy:
The simple strategy could involve using just the Supertrend indicator. Here:
• Buy: When price closes above the Supertrend line.
• Sell: When price closes below the Supertrend line.
Pullback Strategy:
This strategy capitalizes on price retracements:
• Buy: When the price retraces to the Supertrend line after a bullish signal and is supported by another bullish indicator.
• Sell: When the price retraces to the Supertrend line after a bearish signal and is confirmed by another bearish indicator.
Indicators Used:
EMA (Exponential Moving Average):
• Logic: EMA gives more weight to recent prices, making it more responsive to current price movements. A shorter-period EMA crossing above a longer-period EMA can be a bullish sign, while the opposite is bearish.
RSI (Relative Strength Index):
• Logic: RSI measures the magnitude of recent price changes to analyze overbought or oversold conditions. Values above 70 are typically considered overbought, and values below 30 are considered oversold.
MACD (Moving Average Convergence Divergence):
• Logic: MACD assesses the relationship between two EMAs of a security’s price. The MACD line crossing above the signal line can be a bullish signal, while crossing below can be bearish.
CCI (Commodity Channel Index):
• Logic: CCI compares a security's average price change with its average price variation. A CCI value above +100 may mean the price is overbought, while below -100 might signify an oversold condition.
And others...
As the strategy expands or contracts, more indicators might be added or removed. The crucial point is to understand the core logic behind each, ensuring they align with the strategy's objectives.
Logic Behind Each Indicator:
1. EMA: Emphasizes recent price movements; provides dynamic support and resistance levels.
2. RSI: Indicates overbought and oversold conditions based on recent price changes.
3. MACD: Showcases momentum and direction of a trend by comparing two EMAs.
4. CCI: Measures the difference between a security's price change and its average price change.
Understanding strategy conditions is not just about knowing when to buy or sell but also about comprehending the underlying market dynamics that those conditions represent. As you familiarize yourself with each condition and indicator, you'll be better prepared to adapt and evolve with the ever-changing financial markets.
6. Trade Execution and Management
Trade execution and management are crucial aspects of any trading strategy. Efficient execution can significantly impact profitability, while effective management can preserve capital during adverse market conditions. In this section, we'll explore the nuances of position entry, exit strategies, and various Stop Loss (SL) and Take Profit (TP) methodologies within the Supertrend Advance Strategy.
Position Entry:
Effective trade entry revolves around:
1. Timing: Enter at a point where the risk-reward ratio is favorable. This often corresponds to confirmatory signals from multiple indicators.
2. Volume Analysis: Ensure there's adequate volume to support the movement. Volume can validate the strength of a signal.
3. Confirmation: Use multiple indicators or chart patterns to confirm the entry point. For instance, a buy signal from the Supertrend indicator can be confirmed with a bullish MACD crossover.
Position Exit Strategies:
A successful exit strategy will lock in profits and minimize losses. Here are some strategies:
1. Fixed Time Exit: Exiting after a predetermined period.
2. Percentage-based Profit Target: Exiting after a certain percentage gain.
3. Indicator-based Exit: Exiting when an indicator gives an opposing signal.
Percentage-based SL/TP:
• Stop Loss (SL): Set a fixed percentage below the entry price to limit potential losses.
• Example: A 2% SL on an entry at $100 would trigger a sell at $98.
• Take Profit (TP): Set a fixed percentage above the entry price to lock in gains.
• Example: A 5% TP on an entry at $100 would trigger a sell at $105.
Supertrend-based SL/TP:
• Stop Loss (SL): Position the SL at the Supertrend line. If the price breaches this line, it could indicate a trend reversal.
• Take Profit (TP): One could set the TP at a point where the Supertrend line flattens or turns, indicating a possible slowdown in momentum.
Swing high/low-based SL/TP:
• Stop Loss (SL): For a long position, set the SL just below the recent swing low. For a short position, set it just above the recent swing high.
• Take Profit (TP): For a long position, set the TP near a recent swing high or resistance. For a short position, near a swing low or support.
And other methods...
1. Trailing Stop Loss: This dynamic SL adjusts with the price movement, locking in profits as the trade moves in your favor.
2. Multiple Take Profits: Divide the position into segments and set multiple TP levels, securing profits in stages.
3. Opposite Signal Exit: Exit when another reliable indicator gives an opposite signal.
Trade execution and management are as much an art as they are a science. They require a blend of analytical skill, discipline, and intuition. Regularly reviewing and refining your strategies, especially in light of changing market conditions, is crucial to maintaining consistent trading performance.
7. Visual Representations
Visual tools are essential for traders, as they simplify complex data into an easily interpretable format. Properly analyzing and understanding the plots on a chart can provide actionable insights and a more intuitive grasp of market conditions. In this section, we’ll delve into various visual representations used in the Supertrend Advance Strategy and their significance.
Understanding Plots on the Chart:
Charts are the primary visual aids for traders. The arrangement of data points, lines, and colors on them tell a story about the market's past, present, and potential future moves.
1. Data Points: These represent individual price actions over a specific timeframe. For instance, a daily chart will have data points showing the opening, closing, high, and low prices for each day.
2. Colors: Used to indicate the nature of price movement. Commonly, green is used for bullish (upward) moves and red for bearish (downward) moves.
Trend Lines:
Trend lines are straight lines drawn on a chart that connect a series of price points. Their significance:
1. Uptrend Line: Drawn along the lows, representing support. A break below might indicate a trend reversal.
2. Downtrend Line: Drawn along the highs, indicating resistance. A break above might suggest the start of a bullish trend.
Filled Areas:
These represent a range between two values on a chart, usually shaded or colored. For instance:
1. Bollinger Bands: The area between the upper and lower band is filled, giving a visual representation of volatility.
2. Volume Profile: Can show a filled area representing the amount of trading activity at different price levels.
Stop Loss and Take Profit Lines:
These are horizontal lines representing pre-determined exit points for trades.
1. Stop Loss Line: Indicates the level at which a trade will be automatically closed to limit losses. Positioned according to the trader's risk tolerance.
2. Take Profit Line: Denotes the target level to lock in profits. Set according to potential resistance (for long trades) or support (for short trades) or other technical factors.
Trailing Stop Lines:
A trailing stop is a dynamic form of stop loss that moves with the price. On a chart:
1. For Long Trades: Starts below the entry price and moves up with the price but remains static if the price falls, ensuring profits are locked in.
2. For Short Trades: Starts above the entry price and moves down with the price but remains static if the price rises.
Visual representations offer traders a clear, organized view of market dynamics. Familiarity with these tools ensures that traders can quickly and accurately interpret chart data, leading to more informed decision-making. Always ensure that the visual aids used resonate with your trading style and strategy for the best results.
8. Backtesting
Backtesting is a fundamental process in strategy development, enabling traders to evaluate the efficacy of their strategy using historical data. It provides a snapshot of how the strategy would have performed in past market conditions, offering insights into its potential strengths and vulnerabilities. In this section, we'll explore the intricacies of setting up and analyzing backtest results and the caveats one must be aware of.
Setting Up Backtest Period:
1. Duration: Determine the timeframe for the backtest. It should be long enough to capture various market conditions (bullish, bearish, sideways). For instance, if you're testing a daily strategy, consider a period of several years.
2. Data Quality: Ensure the data source is reliable, offering high-resolution and clean data. This is vital to get accurate backtest results.
3. Segmentation: Instead of a continuous period, sometimes it's helpful to backtest over distinct market phases, like a particular bear or bull market, to see how the strategy holds up in different environments.
Analyzing Backtest Results:
1. Performance Metrics: Examine metrics like the total return, annualized return, maximum drawdown, Sharpe ratio, and others to gauge the strategy's efficiency.
2. Win Rate: It's the ratio of winning trades to total trades. A high win rate doesn't always signify a good strategy; it should be evaluated in conjunction with other metrics.
3. Risk/Reward: Understand the average profit versus the average loss per trade. A strategy might have a low win rate but still be profitable if the average gain far exceeds the average loss.
4. Drawdown Analysis: Review the periods of losses the strategy could incur and how long it takes, on average, to recover.
9. Tips and Best Practices
Successful trading requires more than just knowing how a strategy works. It necessitates an understanding of when to apply it, how to adjust it to varying market conditions, and the wisdom to recognize and avoid common pitfalls. This section offers insightful tips and best practices to enhance the application of the Supertrend Advance Strategy.
When to Use the Strategy:
1. Market Conditions: Ideally, employ the Supertrend Advance Strategy during trending market conditions. This strategy thrives when there are clear upward or downward trends. It might be less effective during consolidative or sideways markets.
2. News Events: Be cautious around significant news events, as they can cause extreme volatility. It might be wise to avoid trading immediately before and after high-impact news.
3. Liquidity: Ensure you are trading in assets/markets with sufficient liquidity. High liquidity ensures that the price movements are more reflective of genuine market sentiment and not due to thin volume.
Adjusting Settings for Different Markets/Timeframes:
1. Markets: Each market (stocks, forex, commodities) has its own characteristics. It's essential to adjust the strategy's parameters to align with the market's volatility and liquidity.
2. Timeframes: Shorter timeframes (like 1-minute or 5-minute charts) tend to have more noise. You might need to adjust the settings to filter out false signals. Conversely, for longer timeframes (like daily or weekly charts), you might need to be more responsive to genuine trend changes.
3. Customization: Regularly review and tweak the strategy's settings. Periodic adjustments can ensure the strategy remains optimized for the current market conditions.
10. Frequently Asked Questions (FAQs)
Given the complexities and nuances of the Supertrend Advance Strategy, it's only natural for traders, both new and seasoned, to have questions. This section addresses some of the most commonly asked questions regarding the strategy.
1. What exactly is the Supertrend Advance Strategy?
The Supertrend Advance Strategy is an evolved version of the traditional Supertrend indicator. It's designed to provide clearer buy and sell signals by incorporating additional indicators like EMA, RSI, MACD, CCI, etc. The strategy aims to capitalize on market trends while minimizing false signals.
2. Can I use the Supertrend Advance Strategy for all asset types?
Yes, the strategy can be applied to various asset types like stocks, forex, commodities, and cryptocurrencies. However, it's crucial to adjust the settings accordingly to suit the specific characteristics and volatility of each asset type.
3. Is this strategy suitable for day trading?
Absolutely! The Supertrend Advance Strategy can be adjusted to suit various timeframes, making it versatile for both day trading and long-term trading. Remember to fine-tune the settings to align with the timeframe you're trading on.
4. How do I deal with false signals?
No strategy is immune to false signals. However, by combining the Supertrend with other indicators and adhering to strict risk management protocols, you can minimize the impact of false signals. Always use stop-loss orders and consider filtering trades with additional confirmation signals.
5. Do I need any prior trading experience to use this strategy?
While the Supertrend Advance Strategy is designed to be user-friendly, having a foundational understanding of trading and market analysis can greatly enhance your ability to employ the strategy effectively. If you're a beginner, consider pairing the strategy with further education and practice on demo accounts.
6. How often should I review and adjust the strategy settings?
There's no one-size-fits-all answer. Some traders adjust settings weekly, while others might do it monthly. The key is to remain responsive to changing market conditions. Regular backtesting can give insights into potential required adjustments.
7. Can the Supertrend Advance Strategy be automated?
Yes, many traders use algorithmic trading platforms to automate their strategies, including the Supertrend Advance Strategy. However, always monitor automated systems regularly to ensure they're operating as intended.
8. Are there any markets or conditions where the strategy shouldn't be used?
The strategy might generate more false signals in markets that are consolidative or range-bound. During significant news events or times of unexpected high volatility, it's advisable to tread with caution or stay out of the market.
9. How important is backtesting with this strategy?
Backtesting is crucial as it allows traders to understand how the strategy would have performed in the past, offering insights into potential profitability and areas of improvement. Always backtest any new setting or tweak before applying it to live trades.
10. What if the strategy isn't working for me?
No strategy guarantees consistent profits. If it's not working for you, consider reviewing your settings, seeking expert advice, or complementing the Supertrend Advance Strategy with other analysis methods. Remember, continuous learning and adaptation are the keys to trading success.
Other comments
Value of combining several indicators in this script and how they work together
Diversification of Signals: Just as diversifying an investment portfolio can reduce risk, using multiple indicators can offer varied perspectives on potential price movements. Each indicator can capture a different facet of the market, ensuring that traders are not overly reliant on a single data point.
Confirmation & Reduced False Signals: A common challenge with many indicators is the potential for false signals. By requiring confirmation from multiple indicators before acting, the chances of acting on a false signal can be significantly reduced.
Flexibility Across Market Conditions: Different indicators might perform better under different market conditions. For example, while moving averages might excel in trending markets, oscillators like RSI might be more useful during sideways or range-bound conditions. A mashup strategy can potentially adapt better to varying market scenarios.
Comprehensive Analysis: With multiple indicators, traders can gauge trend strength, momentum, volatility, and potential market reversals all at once, providing a holistic view of the market.
How do the different indicators in the Supertrend Advance Strategy work together?
Supertrend: This is primarily a trend-following indicator. It provides traders with buy and sell signals based on the volatility of the price. When combined with other indicators, it can filter out noise and give more weight to strong, confirmed trends.
EMA (Exponential Moving Average): EMA gives more weight to recent price data. It can be used to identify the direction and strength of a trend. When the price is above the EMA, it's generally considered bullish, and vice versa.
RSI (Relative Strength Index): An oscillator that measures the magnitude of recent price changes to evaluate overbought or oversold conditions. By cross-referencing with other indicators like EMA or MACD, traders can spot potential reversals or confirmations of a trend.
MACD (Moving Average Convergence Divergence): This indicator identifies changes in the strength, direction, momentum, and duration of a trend in a stock's price. When the MACD line crosses above the signal line, it can be a bullish sign, and when it crosses below, it can be bearish. Pairing MACD with Supertrend can provide dual confirmation of a trend.
CCI (Commodity Channel Index): Initially developed for commodities, CCI can indicate overbought or oversold conditions. It can be used in conjunction with other indicators to determine entry and exit points.
In essence, the synergy of these indicators provides a balanced, comprehensive approach to trading. Each indicator offers its unique lens into market conditions, and when they align, it can be a powerful indication of a trading opportunity. This combination not only reduces the potential drawbacks of each individual indicator but leverages their strengths, aiming for more consistent and informed trading decisions.
Backtesting and Default Settings
• This indicator has been optimized to be applied for 1 hour-charts. However, the underlying principles of this strategy are supply and demand in the financial markets and the strategy can be applied to all timeframes. Daytraders can use the 1min- or 5min charts, swing-traders can use the daily charts.
• This strategy has been designed to identify the most promising, highest probability entries and trades for each stock or other financial security.
• The combination of the qualifiers results in a highly selective strategy which only considers the most promising swing-trading entries. As a result, you will normally only find a low number of trades for each stock or other financial security per year in case you apply this strategy for the daily charts. Shorter timeframes will result in a higher number of trades / year.
• Consequently, traders need to apply this strategy for a full watchlist rather than just one financial security.
• Default properties: RSI on (length 14, RSI buy level 50, sell level 50), EMA, RSI, MACD on, type of strategy pullback, SL/TP type: ATR (length 10, factor 3), trade direction both, quantity 5, take profit swing hl 5.1, highest / lowest lookback 2, enable ATR trail (ATR length 10, SL ATR multiplier 1.4, TP multiplier 2.1, lookback = 4, trade direction = both).
Price Action Pattern Breakout Strategy: Wedge,Triangle,ChannelIntroducing the Price Action Pattern Breakout Strategy: Wedge,Triangle,Channel 💹🚀
The "Price Action Pattern Breakout Strategy: Wedge, Triangle, Channel" is a dynamic and automated trading strategy that excels in recognizing and capitalizing on breakout opportunities within the realm of powerful price action patterns. It is finely tuned to achieve exceptional precision in detecting three distinct pattern types: Wedge, Triangle, and Channel. This diversity equips you to confidently navigate a wide range of market scenarios and opportunities.
This strategy automates trade entries and exits upon confirmed pattern breakouts, this eliminates human errors in correctly recognizing patterns and prevents emotional decisions. This strategy is designed to work across different time frames, making it suitable for both short-term and long-term traders. Whether you're a day trader, swing trader, or investor, this strategy provides the flexibility you need to thrive in diverse market conditions.
💎 How it Works:
▶️ In this strategy, three price action patterns have been utilized, one of which is the "Wedge" pattern. The Wedge pattern has consistently demonstrated a high level of credibility, typically resulting in sharp and rapid price movements following a confirmed breakout from this pattern. This characteristic makes the Wedge pattern highly noteworthy in our strategy. The second pattern is the "Triangle" pattern, which, depending on its formation, whether ascending or descending, can indicate a strong continuation or reversal of the trend. The last pattern is the "Channel" pattern. The reason for using the Channel pattern is its versatility in various market conditions and its tendency to produce reliable results.
In the snapshot below, you can observe the types of patterns that this strategy is capable of identifying at a glance:
▶️ This strategy employs two types of targeting systems: Fixed Targets and Trailing Targets.
Fixed Targets is the default targeting system of the strategy, incorporating two primary targets: TP1 (Target Point 1) and TP2 (Target Point 2). These targets are thoughtfully adjusted in alignment with specific rules for each pattern. With Fixed Targets, you have the flexibility to designate the position size percentage for your exits at TP1 and TP2. For instance, should you opt to allocate 60% of your position size to TP1, as soon as the price triggers the first take profit level, 60% of your initial position is gracefully closed, leaving the remaining 40% to exit the trade upon reaching TP2.
Trailing Targets represent the strategy's alternative targeting system. With this system, the trailing stop becomes active once the price reaches the specified trigger point. The strategy then exits the trade based on the defined offset percentage and price retracement from the trailing limit.
▶️ This strategy relies on a single type of stop loss, determined by previous pivot points and adjusted based on the trade's direction, whether long or short, placing the stop loss above or below the prior pivot. This stop loss approach has demonstrated reliability when used alongside price action patterns.
In addition to this fixed stop loss, you can specify a percentage buffer, offering protection against potential stop hunting due to market fluctuations. This buffer helps protect your positions from sudden price swings. For example, selecting a 1% buffer means your stop loss will be positioned 1% higher or lower concerning the last pivot, depending on your trade's direction. This added layer of security ensures your trades remain resilient and less vulnerable to market volatility.
▶️ A practical feature of this strategy is the "Risk-Free" option. Once activated, it continuously monitors price movements, and as soon as the price progresses in the trade's direction and surpasses the designated Risk-Free Trigger Point in percentage, the stop loss is dynamically shifted from its initial position to the entry price, effectively making the trade "risk-free." This means that if the trade doesn't go as expected, we exit at the entry point, incurring neither profit nor loss from the trade.
Additionally, you have the flexibility to fine-tune the modified stop loss, positioning it slightly above or below the entry price through the configuration of a specified percentage. This allows for effective consideration of commission fees in your trading strategy.
▶️ Risk management is a crucial concept in trading, playing a significant role in a trader's long-term success. This strategy introduces a unique feature called "Fixed Loss Position Sizing", where upon activation, you can limit the risk exposure to a specified percentage of your capital per trade. Set your preferred risk percentage along with the intended leverage. The strategy independently considers your available capital and designated leverage, determining the position size before executing any trade.
In the case of a stop loss, your loss is limited to the specified risk percentage. For instance, with a $1000 account and a 1% risk set, the strategy adjusts each trade's size to ensure a maximum loss of $10 if the stop loss is triggered. Enabling this feature will ensure disciplined risk management, aligning potential losses precisely with your predetermined risk percentage, contingent upon your total available capital.
▶️ Another feature of this strategy is a sophisticated mechanism called "Loss Compensation". When enabled, Loss Compensation dynamically adjusts the position size after a loss, aiming to recover from previous losses in subsequent trades. This adaptive mechanism continually modifies the position size to mitigate the impact of consecutive losses until reaching a user-defined limit for consecutive loss compensations.
The feature's configurability allows users to set the maximum number of consecutive losses to compensate for and also includes an option to factor in trading fees from prior trades into the compensation calculation. Loss Compensation operates in conjunction with the 'Fixed Loss Position Sizing' setting, ensuring that once losses are sufficiently compensated, subsequent entries revert to the predefined configurations within the 'Fixed Loss Position Sizing' settings.
This advanced tool ensures a stable risk management approach by changing trade sizes dynamically according to past results during consecutive loss periods.
▶️ This strategy incorporates a feature known as the "Counter-Pattern Breakout", altering its approach to wedge, triangle, and channel pattern breakouts. Normally, the strategy relies on standard pattern signals to determine whether to enter long or short positions based on breakout directions.
For example, in an ascending channel or a rising wedge pattern, the strategy typically seeks a short position opportunity upon a confirmed breakout in the lower line, and breakouts from the upper line are disregarded by the strategy. But with this feature enabled, strategy disregards the conventional pattern signals, seizing breakouts from upper or lower lines to open corresponding positions. For instance, in the ascending channel or the rising wedge pattern example, the strategy might enter a long position if the upper line breaks or a short position if the lower line breaks.
This introduces a more adaptive and opportunistic trading style, allowing you to capitalize on price movements, irrespective of the typical signal direction indicated by the pattern.
▶️ This strategy is fully compatible with third-party trading bots, allowing for easy connectivity to popular trading platforms. By leveraging the TradingView webhook functionality, you can effortlessly link the strategy to your preferred bot and receive accurate signals for position entry and exit. The strategy provides all the necessary alert message fields, ensuring a smooth and user-friendly trading experience. With this integration, you can automate the execution of trades, saving time and effort while enjoying the benefits of this powerful strategy.
⚙️ How to Use & Configure User Settings:
To fully utilize the "Price Action Pattern Breakout Strategy: Wedge, Triangle, Channel," it's essential to consider and comprehend the following steps. They play a crucial role in enhancing its functionality and achieving its utmost potential outcomes:
1. General Strategy Settings:
Enable Dark Mode if using a dark TradingView theme for improved chart visibility.
Select the Strategy's Trade Direction: Long, Short, or Both.
Choose Pattern Recognition Accuracy: High for precise recognition but fewer positions, Low for more positions with slightly less accuracy.
Enable 'Prevent New Entry on Opposite Signal While In Position' to avoid new trades if the opposite signal occurs.
Switch to Indicator Mode if solely using the strategy as an indicator or in combination with other strategies.
2. Pattern and Pivot Configuration:
Consider configuring the Number of Patterns and Pivot Lookback Lengths. Here, you can personalize the pivot lookback lengths for wedge, triangle, and channel patterns across eight different settings on your chart. For lower time frames, consider larger lengths to reduce chart noise. Alternatively, to maintain clarity on your chart, you can disable multiple patterns with different lengths while ensuring at least one pattern remains enabled.
Note that enabling more patterns doesn't always equate to increased potential profit. Sometimes, fewer patterns result in greater profit potential, and vice versa. Experiment with lengths and the number of patterns to determine the most profitable and optimal outcome for your trading symbol and timeframe.
3. Targeting System Selection:
Choose between 'Fixed Targets' or 'Trailing Targets' for your targeting system.
'Fixed Targets' is the default setting, operational when 'Trailing Targets' are turned off.
Set the TP1 Position Size as a percentage, defining the size for TP1, and the rest exits at TP2.
Optionally activate 'Skip Entry if TP1 is Passed' to bypass entering positions if the price has exceeded TP1.
Alternatively, opt for the 'Trailing Target' for dynamic exits based on trigger points and offsets. Note that this option disables fixed targets.
4. Stop Loss Configuration:
Determine the number of candles to consider for stop loss placement based on the last pivot.
Optionally add a percentage to the stop loss to create a buffer against market fluctuations, guarding your positions from sudden price swings.
5. Risk Management Configuration:
You can activate the 'Risk-Free' feature, making your trades risk-free by moving the stop loss to the entry price upon reaching a specified trigger point.
You have the possibility to enable 'Fixed Loss Position Sizing' to limit risk to a percentage of total capital per trade, ensuring prudent risk management.
You can employ 'Use Real-Time Balance for Each Entry' to precisely calculate fixed loss position sizing according to the real-time balance for every entry.
The 'Loss Compensation' feature can be activated to automatically adjust trade sizes during consecutive losses and compensate for prior incurred losses.
Loss compensation continues adjusting trade sizes until it reaches the defined limit of consecutive losses specified in the 'Maximum Consecutive Losses To Compensate' field.
You can factor in commission fees by specifying a percentage in the 'Include Trading Fees in Compensation (%)' field, providing an option for more accurate loss compensation calculations.
You have the option to enable 'Limit Compensation to Real-Time Balance' to prevent consecutive loss compensation from exceeding your current real-time account balance.
It's important to note that for the 'Loss Compensation' feature to operate, the 'Fixed Loss Position Sizing' must be enabled.
6. Counter-Pattern Breakout Configuration:
In this section you have the option to enable the "Counter-Pattern Breakout" feature to adjust the strategy's approach to wedge, triangle, and channel pattern breakouts. Once enabled, the strategy disregards traditional pattern signals and capitalizes on breakouts from either the upper or lower lines, initiating corresponding positions accordingly.
Choose between 'Fixed Target' or 'Trailing Target' for your targeting system. If you opt for the 'Fixed Target', set a specific target point as a percentage, serving as the default target for counter-pattern breakouts. Alternatively, choose the 'Trailing Target' for dynamic exits based on trigger points and offsets. Do keep in mind that selecting the 'Trailing Target' option disables the fixed target setting.
Keep in mind that for standard, non-counter-pattern breakouts, the target point settings in their respective sections remain applicable, distinct from the settings configured for targeting within this section.
Note that the stop loss configurations are shared across standard pattern and counter-pattern breakouts and can be adjusted within the stop loss section.
7. Info Tables:
In the info tables section, you can show or hide different tables on the charts. This includes the backtest table, the current balance table displaying available funds, and a table showcasing Maximum Consecutive Wins or Losses. Choose which to display according to your preferences and specific needs.
8.Date & Time Range Filter:
Utilize the Date & Time Range filter feature to precisely select a start and end date, including time, to filter data within the chosen range.
When connecting this strategy to a trading bot for automated trades, ensure to set the start date and time to the intended initiation moment to avoid undesired outcomes as this directly affects the real-time balance calculations of the strategy.
8. Integration with Third-Party Bots:
To automate trading, leverage the strategy's compatibility with third-party trading bots. Seamlessly integrate the strategy into well-known trading platforms by using alert message fields to input commands from third-party trading bots, enabling automated trade execution for both long and short positions.
By furnishing these adjustable settings, the strategy empowers you to personalize it according to your unique requirements, thereby bolstering the adaptability and efficacy of your trading approach.
🔐 Source Code Protection:
The 'Price Action Pattern Breakout Strategy: Wedge, Triangle, Channel' source code is engineered for precision, reliability, and effectiveness. Its original and innovative design warrants protection and restricted access, preserving the strategy's exclusivity. Safeguarding the code maintains the strategy's integrity and distinctiveness, providing users with a competitive advantage in their trading endeavors.
Bollinger Bands StrategyBollinger Bands Strategy :
INTRODUCTION :
This strategy is based on the famous Bollinger Bands. These are constructed using a standard moving average (SMA) and the standard deviation of past prices. The theory goes that 90% of the time, the price is contained between these two bands. If it were to break out, this would mean either a reversal or a continuation. However, when a reversal occurs, the movement is weak, whereas when a continuation occurs, the movement is substantial and profits can be interesting. We're going to use BB to take advantage of this strong upcoming movement, while managing our risks reasonably. There's also a money management method for reinvesting part of the profits or reducing the size of orders in the event of substantial losses.
BOLLINGER BANDS :
The construction of Bollinger bands is straightforward. First, plot the SMA of the price, with a length specified by the user. Then calculate the standard deviation to measure price dispersion in relation to the mean, using this formula :
stdv = (((P1 - avg)^2 + (P2 - avg)^2 + ... + (Pn - avg)^2) / n)^1/2
To plot the two Bollinger bands, we then add a user-defined number of standard deviations to the initial SMA. The default is to add 2. The result is :
Upper_band = SMA + 2*stdv
Lower_band = SMA - 2*stdv
When the price leaves this channel defined by the bands, we obtain buy and sell signals.
PARAMETERS :
BB Length : This is the length of the Bollinger Bands, i.e. the length of the SMA used to plot the bands, and the length of the price series used to calculate the standard deviation. The default is 120.
Standard Deviation Multipler : adds or subtracts this number of times the standard deviation from the initial SMA. Default is 2.
SMA Exit Signal Length : Exit signals for winning and losing trades are triggered by another SMA. This parameter defines the length of this SMA. The default is 110.
Max Risk per trade (in %) : It's the maximum percentage the user can lose in one trade. The default is 6%.
Fixed Ratio : This is the amount of gain or loss at which the order quantity is changed. The default is 400, meaning that for each $400 gain or loss, the order size is increased or decreased by a user-selected amount.
Increasing Order Amount : This is the amount to be added to or subtracted from orders when the fixed ratio is reached. The default is $200, which means that for every $400 gain, $200 is reinvested in the strategy. On the other hand, for every $400 loss, the order size is reduced by $200.
Initial capital : $1000
Fees : Interactive Broker fees apply to this strategy. They are set at 0.18% of the trade value.
Slippage : 3 ticks or $0.03 per trade. Corresponds to the latency time between the moment the signal is received and the moment the order is executed by the broker.
Important : A bot has been used to test the different parameters and determine which ones maximize return while limiting drawdown. This strategy is the most optimal on BITSTAMP:BTCUSD in 8h timeframe with the following parameters :
BB Length = 120
Standard Deviation Multipler = 2
SMA Exit Signal Length = 110
Max Risk per trade (in %) = 6%
ENTER RULES :
The entry rules are simple:
If close > Upper_band it's a LONG signal
If close < Lower_band it's a SHORT signal
EXIT RULES :
If we are LONG and close < SMA_EXIT, position is closed
If we are SHORT and close > SMA_EXIT, the position is closed
Positions close automatically if they lose more than 6% to limit risk
RISK MANAGEMENT :
This strategy is subject to losses. We manage our risk using the exit SMA or using a SL sets to 6%. This SMA gives us exit signals when the price closes below or above, thus limiting losses. If the signal arrives too late, the position is closed after a loss of 6%.
MONEY MANAGEMENT :
The fixed ratio method was used to manage our gains and losses. For each gain of an amount equal to the fixed ratio value, we increase the order size by a value defined by the user in the "Increasing order amount" parameter. Similarly, each time we lose an amount equal to the value of the fixed ratio, we decrease the order size by the same user-defined value. This strategy increases both performance and drawdown.
NOTE :
Please note that the strategy is backtested from 2017-01-01. As the timeframe is 8h, this strategy is a medium/long-term strategy. That's why only 51 trades were closed. Be careful, as the test sample is small and performance may not necessarily reflect what may happen in the future.
Enjoy the strategy and don't forget to take the trade :)
[blackcat] L2 Fibonacci BandsThe concept of the Fibonacci Bands indicator was described by Suri Dudella in his book "Trade Chart Patterns Like the Pros" (Section 8.3, page 149). These bands are derived from Fibonacci expansions based on a fixed moving average, and they display potential areas of support and resistance. Traders can utilize the Fibonacci Bands indicator to identify key price levels and anticipate potential reversals in the market.
To calculate the Fibonacci Bands indicator, three Keltner Channels are applied. These channels help in determining the upper and lower boundaries of the bands. The default Fibonacci expansion levels used are 1.618, 2.618, and 4.236. These levels act as reference points for traders to identify significant areas of support and resistance.
When analyzing the price action, traders can focus on the extreme Fibonacci Bands, which are the upper and lower boundaries of the bands. If prices trade outside of the bands for a few bars and then return inside, it may indicate a potential reversal. This pattern suggests that the price has temporarily deviated from its usual range and could be due for a correction.
To enhance the accuracy of the Fibonacci Bands indicator, traders often use multiple time frames. By aligning short-term signals with the larger time frame scenario, traders can gain a better understanding of the overall market trend. It is generally advised to trade in the direction of the larger time frame to increase the probability of success.
In addition to identifying potential reversals, traders can also use the Fibonacci Bands indicator to determine entry and exit points. Short-term support and resistance levels can be derived from the bands, providing valuable insights for trade decision-making. These levels act as reference points for placing stop-loss orders or taking profits.
Another useful tool for analyzing the trend is the slope of the midband, which is the middle line of the Fibonacci Bands indicator. The midband's slope can indicate the strength and direction of the trend. Traders can monitor the slope to gain insights into the market's momentum and make informed trading decisions.
The Fibonacci Bands indicator is based on the concept of Fibonacci levels, which are support or resistance levels calculated using the Fibonacci sequence. The Fibonacci sequence is a mathematical pattern that follows a specific formula. A central concept within the Fibonacci sequence is the Golden Ratio, represented by the numbers 1.618 and its inverse 0.618. These ratios have been found to occur frequently in nature, architecture, and art.
The Italian mathematician Leonardo Fibonacci (1170-1250) is credited with introducing the Fibonacci sequence to the Western world. Fibonacci noticed that certain ratios could be calculated and that these ratios correspond to "divine ratios" found in various aspects of life. Traders have adopted these ratios in technical analysis to identify potential areas of support and resistance in financial markets.
In conclusion, the Fibonacci Bands indicator is a powerful tool for traders to identify potential reversals, determine entry and exit points, and analyze the overall trend. By combining the Fibonacci Bands with other technical indicators and using multiple time frames, traders can enhance their trading strategies and make more informed decisions in the market.
2Mars - MA / BB / SuperTrend
The 2Mars strategy is a trading approach that aims to improve trading efficiency by incorporating several simple order opening tactics. These tactics include moving average crossovers, Bollinger Bands, and SuperTrend.
Entering a Position with the 2Mars Strategy:
Moving Average Crossover: This method considers the crossing of moving averages as a signal to enter a position.
Price Crossing Bollinger Bands: If the price crosses either the upper or lower Bollinger Band, it is seen as a signal to enter a position.
Price Crossing Moving Average: If the price crosses the moving average, it is also considered a signal to enter a position.
SuperTrend and Bars confirm:
The SuperTrend indicator is used to provide additional confirmation for entering positions and setting stop loss levels. "Bars confirm" is used only for entry to positions.
Moving Average Crossover Strategy:
A moving average crossover refers to the point on a chart where there is a crossover of the signal or fast moving average, above or below the basis or slow moving average. This strategy also uses moving averages for additional orders #3.
Basis Moving Average Length: Ratio * Multiplier
Signal Moving Average Length: Multiplier
Bollinger Bands:
Bollinger Bands consist of three bands: an upper band, a lower band, and a basis moving average. However, the 2Mars strategy incorporates multiple upper and lower levels for position entry and take profit.
Basis +/- StdDev * 0.618
Basis +/- StdDev * 1.618
Basis +/- StdDev * 2.618
Additional Orders:
Additional Order #1 and #2: closing price crosses above or below the Bollinger Bands.
Additional Order #3: closing price crosses above or below the basis or signal moving average.
Take Profit:
The strategy includes three levels for taking profits, which are based on the Bollinger Bands. Additionally, a percentage of the position can be chosen to close long or short positions.
Limit Orders:
The strategy allows for entering a position using a limit order. The calculation for the limit order involves the Average True Range (ATR) for a specific period.
For long positions: Low price - ATR * Multiplier
For short positions: High price + ATR * Multiplier
Stop Loss:
To manage risk, the strategy recommends using stop loss options. The stop loss is updated with each entry order and take-profit level 3. When using the SuperTrend Confirmation, the stop loss requires confirmation of a trend change. It allows for flexible adjustment of the stop loss when the trend changes.
There are three options for setting the stop loss:
1. ATR (Average True Range):
For long positions: Low price - ATR * Long multiplier
For short positions: High price + ATR * Short multiplier
2. SuperTrend + ATR:
For long positions: SuperTrend - ATR * Long multiplier
For short positions: SuperTrend + ATR * Short multiplier
3. StdDev:
For long positions: StdDev - ATR * Long multiplier
For short positions: StdDev + ATR * Short multiplier
Flexible Stop Loss:
There is also a flexible stop loss option for the ATR and StdDev methods. It is triggered when the SuperTrend or moving average trend changes unfavorably.
For long positions: Stop-loss price + (ATR * Long multiplier) * Multiplier
For short positions: Stop-loss price - (ATR * Short multiplier) * Multiplier
How configure:
Disable SuperTrend, take profit, stop loss, additional orders and begin setting up a strategy.
Pick soucre data
Number of bars for confirm
Pick up the ratio of the base moving average and the signal moving average.
Set up a SuperTrend
Time for set up of the Bollinger Bands and the take profit
And finaly set up of stop loss and limit orders
All done!
For OKX exchange:
RSI Box Strategy (pseudo- Grid Bot)This is a strategy intended primarily for algorithmic traders. It's a pseudo-grid bot that uses a dynamic, volume-weighted grid that only updates when the RSI meets certain conditions. It's also a breakout strategy, whereas normal grid bots are not (typical grid bots sell when a higher grid is reached, whereas this strategy sells when a lower grid is breached under specific conditions). This strategy also sells 100% of pyramiding orders on close.
In a nutshell, the strategy updates its grid to the volume-weighted highest/lowest values of your given source ("src" in the settings) each time that there is a RSI crossunder/crossover. From this range it produces an evenly-spaced grid of five lines, and uses the current source to determine which grid line is closest to the source. Then, if the source crosses over the line directly above the current line, it enters a buy order. If the source crosses under the line directly below the current line, it enters a sell order.
You can configure shorts, source, RSI length, and overbought/oversold levels in the settings.
For the strategy results below: fees are at 0.1% per trade, with order size 1% of equity and a max pyramiding value of 33. For a greater R/R profile, you can increase the order size, which will increase drawdown but potentially yield better results.
2Mars strategy [OKX]The strategy is based on the intersection of two moving averages, which requires adjusting the parameters (ratio and multiplier) for the moving average.
Basis MA length: multiplier * ratio
Signal MA length: multiplier
The SuperTrend indicator is used for additional confirmation of entry into a position.
Bollinger Bands and position reversal are used for take-profit.
About stop loss:
If activated, the stop loss price will be updated on every entry.
Basic setup:
Additional:
Alerts for OKX:
Keltner Channel Strategy with Golden CrossOnly trade with the trend.
This Keltner Channel-based strategy that will only enter into a trade if the signal of the Keltner Channel agrees with a moving average crossover as defined by the user.
Long Position Entries
2 Conditions must be present
1. There must be a Golden Cross (lower period moving average is above higher period moving average). ex 50 period MA > 200 period MA.
2. Price must cross above the Keltner Channel ATR defined by the user.
Short Position Entries
2 Conditions must be present
1. There must be a Death Cross (lower period moving average is below higher period moving average). ex 50 period MA < 200 period MA.
2. Price must cross below the Keltner Channel ATR defined by the user
Closing Trades:
The strategy closes trades as follows:
1. Price crossing the Keltner Channel's Take Profit ATR (defined by User)
2. Price crossing the Keltner Channel's Stop Loss ATR (defined by User)
IU Break of any session StrategyHow this script works:
1. This script is an intraday trading strategy script which buy and sell on the bases of user-defined intraday session range breakout and gives alert(if the alert is set) message too when the new position is open.
2. It calculate the session as per the user inputs or user defined custom session.
3. The script stores the highest and lowest value of the whole session.
4. It take a long position on the first break and close above the highest value.
5. It take a short position on the break and close below the lowest value.
6. The script takes one position in one day.
7. The stop loss for this script is the previous low(if long) or high(if short).
8. Take profit is 1:2 and it's adjustable.
9. This script work on every kind of market.
How The Useful For The User :
1. User can backtest any session range breakout he wants to trade.
2. User can get alert when the new position is open.
3. User can change the Risk to Reward in order to find the best Risk to Reward.
4. User can see the highest and lowest value of the session with respect to analyzing his trading objective.
5. This strategy script highlights which session range breakout performs best and which performs worst.
Nifty 50 5mint Strategy
The script defines a specific trading session based on user inputs. This session is specified by a time range (e.g., "1000-1510") and selected days of the week (e.g., Monday to Friday). This session definition is crucial for trading only during specific times.
Lookback and Breakout Conditions:
The script uses a lookback period and the highest high and lowest low values to determine potential breakout points. The lookback period is user-defined (default is 10 periods).
The script also uses Bollinger Bands (BB) to identify potential breakout conditions. Users can enable or disable BB crossover conditions. BB consists of an upper and lower band, with the basis.
Additionally, the script uses Dema (Double Exponential Moving Average) and VWAP (Volume Weighted Average Price) . Users can enable or disable this condition.
Buy and Sell Conditions:
Buy conditions are met when the close price exceeds the highest high within the specified lookback period, Bollinger Bands conditions are satisfied, Dema-VWAP conditions are met, and the script is within the defined trading session.
Sell conditions are met when the close price falls below the lowest low within the lookback period, Bollinger Bands conditions are satisfied, Dema-VWAP conditions are met, and the script is within the defined trading session.
When either condition is met, it triggers a "long" or "short" position entry.
Trailing Stop Loss (TSL):
Users can choose between fixed points ( SL by points ) or trailing stop (Profit Trail).
For fixed points, users specify the number of points for the stop loss. A fixed stop loss is set at a certain distance from the entry price if a position is opened.
For Profit Trail, users can enable or disable this feature. If enabled, the script uses a "trail factor" (lookback period) to determine when to adjust the stop loss.
If the price moves in the direction of the trade and reaches a certain level (determined by the trail factor), the stop loss is adjusted, trailing behind the price to lock in profits.
If the close price falls below a certain level (lowest low within the trail factor(lookback)), and a position is open, the "long" position is closed (strategy.close("long")).
If the close price exceeds a certain level (highest high within the specified trail factor(lookback)), and a position is open, the "short" position is closed (strategy.close("short")).
Positions are also closed if they are open outside of the defined trading session.
Background Color:
The script changes the background color of the chart to indicate buy (green) and sell (red) signals, making it visually clear when the strategy conditions are met.
In summary, this script implements a breakout trading strategy with various customizable conditions, including Bollinger Bands, Dema-VWAP crossovers, and session-specific rules. It also includes options for setting stop losses and trailing stop losses to manage risk and lock in profits. The "trail factor" helps adjust trailing stops dynamically based on recent price movements. Positions are closed under certain conditions to manage risk and ensure compliance with the defined trading session.
CE=Buy, CE_SL=stoploss_buy, tCsl=Trailing Stop_buy.
PE=sell, PE_SL= stoploss_sell, tpsl=Trailing Stop_sell.
Remember that trading involves inherent risks, and past performance is not indicative of future results. Exercise caution, manage risk diligently, and consider the advice of financial experts when using this script or any trading strategy.
Strategy:Reversal-CatcherWhat
This is a plain and vanilla reversal based strategy for intraday (15m) timeframe on Futures prices of the assets.
Now what all it comprises of?
It finds out the dynamic support & resistance from Bollinger Band (20 period, 1.5 std dev).
It finds out the potential divergence of price deviation from 5 period exponential moving average (EMA).
If the previous candle (N-1) shows a divergence it confirms the reversal by checking the present candle (N) to be closed inside the Bollinger Band.
It confirms the momentum by checking RSI shows a crossover/crossunder to oversold (30) / overbought (70) region.
It also confirms whether the trend is up (then only reversal trade to short) or down (then only reversal trade to long). The trend is checked with EMA-21 and EMA-50.
Re-affirmation Condition : It re-affirms the position of two successive candles called as `hhLLong` and `hhLLShort` in the script.
Why
In Indian context, retail participants are pre-dominantly (yes- 80% of Indian daily volume) Options buyers mainly in weekly indices (Nifty, BankNifty, FinNifty, CNXMidcap, Sensex, Bankx .. well everyday is expiry now in India, except -- Thank God -- Saturday & Sunday).
And in Index Options the momentum plays a big role.
If one can catch a good reversal point the potential of high Risk-to-Reward trade (hence earn handsomely) is very likely (please note: there is no holy grail in trading. Nothing works 100%).
So this is the attempt to catch a reversal.
Re-affirmation of Reversal
hhLLong : It's a reversal point after an uptrend. It checks the relative positioning of current candle compared to that of previous candle. [The details are in the script. Check for variable hhLLong in script.
hhLLShort : It's a reversal point after a downtrend. It checks the relative positioning of current candle compared to that of previous candle. [The details are in the script. Check for variable hhLLShort in script.
Unique-ness
What's unique in it? Why we decided to publicly share this:
Already given the context of The Great Indian Options Buyers community. It should be helpful to them, we believe.
It takes Very Less Number of Trades with High Accuracy . Please check the result in NSE:NIFTY1! in 15m timeframe. 71% accuracy with roughly a trade in a month.
There is no point giving brokers' the brokerages taking 10 trades a day and ending not-so-good EoD. Better lets take less trades with better result possibility. .
Mention
There are many people uses this variation of Bolling Band, 5EMA
Many people use RSI, trends and relative positioning of candles.
--> We are grateful to all of them. It's really difficult to mention everyone's name. But all people somehow influence the thought process. Thanks for all of them.
Statutory Disclaimer
There is no silver bullet / holy grail in trading. Nothing works 100% time. One has to be careful about the loss (s)he can bear in case of the trade goes against.
We, as the author of this script, is not responsible for any trading or position decision one is taken based on the outcome of this.
It is our sole discretion to change, add, delete the portion or withdraw the whole script without any prior notice or intimation.
In Indian Context : We are not SEBI registered, will never be SEBI registered.
Ahsan Tufail Precise MA Crossover Filter for Reliable SignalsIntroduction:
In the ever-evolving world of Forex trading, strategies that provide a competitive edge are highly sought after. The Moving Average (MA) crossover technique is a popular long-term approach, but its vulnerability to false signals can lead to potential losses. To overcome this challenge, we introduce a game-changing MA crossover filter designed to weed out false signals and unlock the full potential of this strategy. In this article, we delve into the mechanics of this filter, providing a comprehensive analysis of its components and how it enhances the accuracy of buy and sell signals.
The Power of the MA Crossover Filter:
The essence of our MA crossover filter lies in the integration of a specialized indicator that operates on a scale of 0 to 100. This ingenious indicator dynamically measures the distance between the middle Bollinger band and either the upper or lower Bollinger band. By analyzing the values of the last 504 candlesticks, it maps the range from 50 to 100 for the largest and smallest distances between the middle and upper Bollinger bands. Similarly, for values ranging from 0 to 50, it measures the distance between the middle and lower Bollinger bands.
Unveiling the Signal Execution Process:
The brilliance of this filter is revealed in its meticulous execution of buy and sell signals, which significantly reduces false crossovers. Let's explore the process step-by-step:
Buy Signal Precision:
To initiate a buy signal, the price must be positioned above the 200-period Simple Moving Average (SMA).
The filter validates the crossover by checking the indicator's value, ensuring it falls below the threshold of 25.
Sell Signal Accuracy:
For a sell signal, the price must be below the 200-period Simple Moving Average (SMA).
The filter confirms the crossover by verifying the indicator's value, which should exceed the threshold of 75.
This selective approach ensures that only high-confidence crossovers are considered, maximizing the potential for profitable trades.
Fine-Tuning the Filter for Optimal Performance:
While the MA crossover filter exhibits its prowess in GBPUSD and EURUSD currency pairs, it may require adjustments for other pairs. Currency pairs possess unique characteristics, and adapting the filter to specific behavior is crucial for its success.
To fine-tune the filter for alternative currency pairs, traders should conduct rigorous backtesting and analyze historical price data. By experimenting with indicator threshold values, traders can calibrate the filter to accurately match the dynamics of the target currency pair. This iterative process allows for customization, ultimately resulting in a finely-tuned filter that aligns with the unique behavior of the selected market.
Conclusion:
The MA crossover filter represents a paradigm shift in long-term Forex trading strategies. By intelligently filtering false signals, this precision tool unleashes the true potential of the MA crossover technique, elevating its profitability and enhancing overall trading performance. While no strategy guarantees absolute success, incorporating this filter empowers traders with a heightened level of confidence in their buy and sell signals. Embracing the power of this innovative filter can be a transformative step towards mastering Forex profits and staying ahead in the dynamic world of currency trading.
Nadaraya-Watson Envelope Strategy (Non-Repainting) Log ScaleIn the diverse world of trading strategies, the Nadaraya-Watson Envelope Strategy offers a different approach. Grounded in mathematical analysis, this strategy utilizes the Nadaraya-Watson kernel regression, a method traditionally employed for interpreting complex data patterns.
At the core of this strategy lies the concept of 'envelopes', which are essentially dynamic volatility bands formed around the price based on a custom Average True Range (ATR). These envelopes help provide guidance on potential market entry and exit points. The strategy suggests considering a buy when the price crosses the lower envelope and a sell when it crosses the upper envelope.
One distinctive characteristic of the Nadaraya-Watson Envelope Strategy is its use of a logarithmic scale, as opposed to a linear scale. The logarithmic scale can be advantageous when dealing with larger timeframes and assets with wide-ranging price movements.
The strategy is implemented using Pine Script v5, and includes several adjustable parameters such as the lookback window, relative weighting, and the regression start point, providing a level of flexibility.
However, it's important to maintain a balanced view. While the use of mathematical models like the Nadaraya-Watson kernel regression may provide insightful data analysis, no strategy can guarantee success. Thorough backtesting, understanding the mathematical principles involved, and sound risk management are always essential when applying any trading strategy.
The Nadaraya-Watson Envelope Strategy thus offers another tool for traders to consider. As with all strategies, its effectiveness will largely depend on the trader's understanding, application, and the specific market conditions.
Grid Strategy with MA0. Preface
Hello traders,
This is a strategy script that allows you to utilize a Grid Strategy using moving averages.
It is very simple, but I decided to post it because it was hard to find such shared open-source codes in Pine Script.
1. Main
This is a very simple trading method.
Based on the moving average line you set, if the price drops by a certain ATR (or percent) below it, you buy, and when it goes back up, you sell.
In basic settings, you choose the moving average line and its length, and decide how much to set the distance between each grid through the 'Band Multiplier/Percent' item.
I believe that it is advantageous to widen the bandwidth for stocks with strong upward momentum.
2. Conclusion
I have confirmed that this works better in the stock market than in the crypto market,
and that it is suitable for use on index stocks like NASDAQ because it follows trends.
In addition, through backtesting, I have confirmed that this grid strategy is more suitable for buying strategies than selling strategies, so I uploaded it as a strategy focused on buying strategies.
Personally, I have developed my own strategy by adjusting buying and selling strategies according to trends and managing risks.
I hope you can use this to create a script that suits you.
Thank you.
Premium VWAP Trendfollow Strategy [wbburgin]This is a strongly-revised version of my VWAP Trendfollow Strategy, which follows a substantial reworking to address various structural inefficiencies with the script, such as the narrowing of the standard deviation band upon anchor reset. I will continue updating the original script with planned adjustments, this is a different proof-of-concept that builds off of the original script thesis with a different calculation method and execution.
This strategy is not built for any specific asset or timeframe, and has been backtested on crypto and equities from 1 min-1 day. The previous experimental strategy was heavily-correlated with the actual movement of the asset, which added unpalatable risk to the strategy and increased drawdown. This revised form has a more stable backtesting curve, but I want to heavily emphasize that I cannot guarantee that the strategy will be profitable for your circumstances. Backtesting only goes so far and every exchange has a different fee schedule, which can substantially eat into your profits. At the bottom I will explain the parameters behind the strategy results.
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The VWAP Trendfollow Strategy begins with a simple premise: to enter long when the price breaks above the upper standard deviation of a VWAP, and to close the position when the price breaks below the lower standard deviation of the VWAP. This is more effective than initiating the same strategy for a VWMA because the VWAP resets its anchor depending on your chosen anchor period, and the act of resetting its anchor also resets its standard deviation value. As a consequence, in sustained uptrends, the standard deviation is pulled upward to meet the price when the anchor resets, instead of requiring the price to fall all the way back down, as in the lower standard deviation band of the VWMA. This essentially acts as the VWAP itself raising the stop loss at each anchor period, which works well for the overall trend-following strategy.
However, this narrowing can still have consequences for a simple breakout strategy; as the price gradually oscillates towards above or below its standard deviation band, it may cross over the other and produce false signals. This oscillation is worrisome especially when fees are taken into account.
Thus, the premium VWAP Trendfollow strategy has a variable width which detects abnormal narrowing of the band, and adjusts it until it is reasonable to close the variability period. Additionally, a filter is added to the open/close signals to soften the frequency of signals without impacting performance significantly.
This script contains an ATR stop loss and an ATR take profit (which is also a difference between it and the original experimental script), with customizable inputs. The strategy results shown below are with initial capital of $1000, qty entry of 10%, and commissions of 0.06%. It works best on 24/7 instruments, like crypto, but I have found it also works with FAANG stocks or other high volatility / high volume assets. The issue with stocks, however, is that the price can jump/plummet because of abnormal events after-hours, which the strategy cannot pick up on until pre-trading begins the next morning. For that reason I suggest it be used on crypto and, because of its low % profitable (but high average winning trade in relation to its average losing trade), be used on an exchange that has minimal fees or volume-based discounts. In the unfortunate case that you cannot find a minimal fee or volume-discounted fee exchange (such as fellow Americans following the liquidity-retreat on Binance.US), I encourage you to test out the higher anchor periods for the higher timeframes, which will reduce the number of trades and increase the average % per trade.
Additionally, this is a long-term strategy used best for accumulation. It is currently long-only; that may change based off of user input.
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Disclaimer
Copyright by wbburgin.
The information contained in my Scripts/Indicators/Algorithms does not constitute financial advice or a solicitation to buy or sell any securities of any type. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on an evaluation of their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
Powertrend - Volume Range Filter Strategy [wbburgin]The Powertrend is a range filter that is based off of volume, instead of price. This helps the range filter capture trends more accurately than a price-based range filter, because the range filter will update itself from changes in volume instead of changes in price. In certain scenarios this means that the Powertrend will be more profitable than a normal range filter.
Essentials of the Strategy
This is a breakout strategy which works best on trending assets with high volume and liquidity. It should be used on middle to higher timeframes and can be used on all assets that have volume provided by the data source (stocks, crypto, forex). It is long-only as of now. It can work on lower timeframes if you optimize the strategy filters to make less trades or if your exchange/broker is low/no fees, provided that your exchange/broker has high liquidity and volume.
The strategy enters a long position if the range filter is trending upwards and the price crosses over the upper range band, which signifies a price-volume breakout. The strategy closes the long position if the range filter is trending downwards and the price crosses under the lower range band, which signifies a breakdown. Both these conditions can be altered by the three filter options in the settings. The default trend filter is not alterable because it helps prevent false entries and exits that are against the trend.
Settings
The Length setting is the lookback period for the range smoothing.
The ADX Filter setting enables you to turn on an ADX filter, which will halt entries and exits unless the ADX of your customizable length is above a ADX VWMA of that length.
The Range Supertrend setting creates a supertrend from the top and bottom ranges, which can be used to filter entries and exits. The length is customizable. The filter can show you whether the range is making higher highs and lower lows. Below is an example of the Range Supertrend being used as a filter and plotted on-chart:
The VWMA setting halts entries if they are below a customizable length VWMA.
Both the Range Supertrend and the VWMA can also be plotted separately without actually filtering the strategy, so that you can use them independently if you wish. You can turn off the bar color, the highlighting, and the labels if you wish in the settings. A note about the bar color: if the color changes but the strategy does not signal an exit or entry this means that the crossover was against the trend. In these circumstances it may be indicative of a pullback to enter or exit or to add onto your position.
About the Strategy Results Below
A range filter is normally composed of two components - the range filter itself and a smoothing function. In the development of this script I tested both normal and volume-based varieties of the range filter and the smoothing function:
Tests Performed
Volume-based Range x VWMA smoothing
Price-based Range x VWMA smoothing
Price-based Range x EMA smoothing
Volume-based Range x EMA smoothing (final result)
The highest-performing was a volume-based range filter and a normal EMA-based smoothing function, but that does not mean that this strategy will be profitable - exits are based off of signal reversion so I strongly encourage you to develop your own take profits/stop losses for the strategy if you think it may be a good fit for you. The results below are with a commission value of 0.05% (because I built the strategy first for equities), slippage of 3, so if your exchange/broker has a higher fee schedule, I recommend adding filters and/or moving to higher timeframes for the strategy. Additionally, I used 10% of equity in each trade, while using the Range Supertrend filter (the previous upload was unrealistic because it used 100% of equity - missed a 0, apologies, and added in slippage).
METRIC-TREND-TRADERThis script is a Fully Automated trading script meant to be used with "Oanda" broker and the plug-ins for algorithmic trading automation.( FOREX ONLY)
This script is meant to capture "TREND FOLLOWING " for intraday charts (1hour) preferably and will hold for days / weeks .trading on forex markets.
(The combination of indicators includes a short high and low price channel and a longer term high and low price channel)
This script is original in description as being automated to try and capture dynamic trending markets with both long and short fractal price channels. although trend trading is not an original concept. trend trading with this dynamic indicator allows the user visualize both short term and longer term price action at the same time, helping to make better trading decisions. the channels are designed to buy breakouts in the direction of the longer term trend while trailing stop a built-in stop loss that allows normal market movement while attempting to lock in flexible profits.
The concept of this indicator is be able to quickly visualize trends by high lighting the large green areas beneath price "when trending long" which is the difference between the (user defined) short term lows and the (user defined) Long period price lows.
For "down trending" markets a large red area above price will be displayed and this is the difference between the (user defined) short term highs and the (user defined) long term highs.
This strategy uses a lower than reward profile to jump in direction of market moves for continuation,
(1 risk to 4 reward)
in the likelihood the instrument will continue (example) 200 pips before it reverts 50 pips in the counter direction.
This strategy should only be used in markets that you believe are "TRENDING" at the time of trading otherwise you risk trend trading a range market.
This script uses a (user defined period) of short term high and low price ( green/red color) and (user defined period) Long Term high and low price (green/red) chosen in the indicator settings menu.
The default parameters are 10 with a (minimum of 1 and maximum of 10000) for the short term channel and 50 with a (minimum of 1 and maximum of 10000) for the long term price channel , the default parameters = roughly 2 days "long term" and 10 hours "short term" of price action on the (1 hour) chart.
Strategy entries and exits , for Long trades the trade will be entered if the short term high crosses above the Long Term high and the Short term low is not equal to the Long term low . the trade will exit if profit or stop loss are hit or if the Short term low crosses under the long term low.
For Short trades the trade will enter short if , the short term low crosses under the long term low and the short term high is not equal to the long term high. the trade will exit if profit or stop loss are hit or the short term high crosses over the long term high
"The default parameters should be kept unless you fully understand the complete strategy"
There are two very important inputs to be selected at the user setting menu "Long Only " and "Short Only" if you are looking to place long trades only select "Long Only" or for short trades select " Short Only" it is not recommended to keep both selected as it will trade both sides!
When the trade is entered a red , a blue and green horizontal dotted line will appear on the chart.
the blue line is the strategy entry price , the red line is the stop loss price , and the green line is the take profit price . the colors will invert if the trade is long or short.
(Setting alerts should be done in the indicator settings menu, and the parameters you chose will determine the stop loss/target and the amount of "units = (position size)" you wish to trade for the (forex only) markets. using "alert() function calls only" is the only alert that should be used with this strategy.
(note : when "alert() function calls only" is set two messages will be sent, one closing any open position in the opposite direction and one placing the new order regardless if you are currently in a trade or not)
Trade targets , stoploss and trade position size are a user defined variables entered in the indicator settings menu. (target pips minimum 0 and a maximum of 1000)(stop pips minimum of 0 and maximum of 1000)
Back test date range is included in the script for back testing different data periods.
the back ground will be colored a transparent navy blue if the period you are looking trading is with in the date range( note: to place live trades the end date will need to be in the future)
this is also adjustable in the settings menu
The avoid spread filter is a user defined time in which the spread is typically higher than average, applying this filter avoids trades in the specified time. When this filter is applied there will be a transparent red back ground color in the specified time.
Back test default setting are equivocal to OANDA:USDJPY
at the time of this publication placing trades with the "Oanda" broker are as follows , USD units = 2000 equal 2000 USD position size . "Oanda" current leverage is 20 to 1 for this particular pair and commission is paid in spread (1.4) pips = 0.19 USD per trade , Margin required for the trade is 100.0 USD , Position sizing = 10% of a 1000 USD account.
OANDA:USDJPY
PRICE CHANNEL MEAN REVERSIONThis script is a Fully Automated trading script meant to be used with "Oanda" broker and the plug-ins for algorithmic trading automation.( FOREX ONLY)
This script is meant to capture "MEAN REVERSION " for intraday charts (1hour) preferably and will hold for days / weeks .trading on forex markets.
(The combination of indicators includes a high and low price channel along with a fast moving average)
This script is original in the description of Alan Hulls moving average combined with the high and low closing of price action.
The concept of this mean reversion strategy is to try and capture price exhaustive moves . The moving average is fast and most times remains in the channel. when the moving average overshoots the channel the average price of the instrument is thought to be rising or falling faster then average, indicating a possibility that the instrument may revert (pull back) this strategy aims to capture that pull back.
This strategy uses a higher risk than reward profile to jump in front of market moves (4 risk to 1 reward)
in the likelihood the instrument will revert back (example) 25 pips before it continues 100 pips in the current direction.
This strategy should only be used in markets that you believe are mean reverting at the time of trading otherwise you will be jumping Infront of a possible trend and the price can continue in the trending direction for an unknown specified amount of time.
This script uses a (user defined period) fast moving average ( green/red color) and (user defined period) price channel (White/Blue) chosen in the indicator settings menu.
The default parameters are 55 with a (minimum of 1 and maximum of 10000) for the moving average and 50 with a (minimum of 1 and maximum of 10000) for the price channel , the default parameters = roughly 2 days of price action on the (1 hour) chart.
"The default parameters should be kept unless you fully understand the complete strategy"
the upper band (white line) is the highest close of the specified period and the lower band (blue line) is the lowest close of the same period.
When the fast moving average over shoots the price channel (exits) then crosses back into the price channel (enters) it will trigger a long or short trade.
The long signal is given when the the moving average crosses below the low band then crosses back above the low band . The trade long trade will be entered and the trade will exit if the stop loss or profit targets are hit or if the short signal is given the trade will close then reverse.
The short trade will be entered if the fast moving average crosses above the upper band (white line) then crosses back down through the upper band (white line) The trade short trade will be entered and the trade will exit if the stop loss or profit targets are hit or if the long signal is given the trade will close then reverse.
When the trade is entered a red , a blue and green horizontal dotted line will appear on the chart.
the blue line is the strategy entry price , the red line is the stop loss price , and the green line is the take profit price . the colors will invert if the trade is long or short.
(Setting alerts should be done in the indicator settings menu, and the parameters you chose will determine the stop loss/target and the amount of "units = (position size)" you wish to trade for the (forex only) markets. using "alert() function calls only" is the only alert that should be used with this strategy.
(note : when "alert() function calls only" is set two messages will be sent, one closing any open position in the opposite direction and one placing the new order regardless if you are currently in a trade or not)
Trade targets , stoploss and trade position size are a user defined variables entered in the indicator settings menu. (target pips minimum 0 and a maximum of 1000)(stop pips minimum of 0 and maximum of 1000)
Back test date range is included in the script for back testing different data periods.
the back ground will be colored a transparent navy blue if the period you are looking trading is with in the date range( note: to place live trades the end date will need to be in the future)
this is also adjustable in the settings menu
The avoid spread filter is a user defined time in which the spread is typically higher than average, applying this filter avoids trades in the specified time. When this filter is applied there will be a transparent red back ground color in the specified time.
Back test default setting are equivocal to OANDA:NZDUSD
at the time of this publication placing trades with the "Oanda" broker are as follows , NZD units = 3250 equal 2000 USD position size . "Oanda" current leverage is 33.3 to 1 for this particular pair and commission is paid in spread (1.7) pips = 0.55 USD per trade , Margin required for the trade is 60.50 USD , Position sizing = 6.5% of a 1000 USD account. OANDA:NZDUSD
Volatility Compression Breakout - LeafAlgo Pro StrategyThe Volatility Compression Breakout strategy is designed to identify periods of low volatility followed by potential breakout opportunities in the market. It aims to capture moments when the price consolidates within a narrow range, indicating a decrease in volatility, and anticipates a subsequent expansion in price movement. This strategy is based on our indicator of the same name (), but differs by offering many more options for the band/channel type and trend filters in addition to implementing the ability to use this strategy with algorithmic plug-ins (see details at the bottom).
This strategy features six types of bands/channels and five types of trend filters, for a total of 30 combinations. The six band/channel types are the Adaptive Gaussian MA channel (based on the Adaptive Gaussian MA that we previously published ()), standard Bollinger Bands, smoothed Bollinger Bands (basis is an EMA of the typical Bollinger Basis), Keltner Channels, a Quadratic Regression Channel (based on the channel that we previously published in the LeafAlgo Pro indicator ()), and Volatility-Based Mean Reversion Bands (). The five trend filters include an EMA, SMA, Weighted MA, McGinley Dynamic, and the Adaptive Gaussian MA itself.
Examples of the different band/channel types (all with EMA as the trend filter):
Adaptive Gaussian MA Channel:
Bollinger Bands:
Smoothed Bollinger Bands:
Keltner Channels:
Quadratic Regression Channel:
Volatility-Based Mean Reversion Bands:
Examples of the different trend filters (all with Keltner Channels):
EMA:
SMA:
WMA:
McGinley Dynamic:
Adaptive Gaussian MA:
How the Long/Short Entry Signals are Calculated:
A breakout signal upwards, accompanied by a long entry, is created when the high is greater than the secondary upper band (the upper band plus a standard deviation or with a multiplier, depending on which band/channel type is selected), the latest close is above the trend filter line, and the previous close was below the trend filter line. A break downwards, accompanied by a short entry, is created when the low is below the secondary lower band, the close is below the trend filter line, and the previous close was above the trend filter line. These conditions, along with a confirmed barstate, make up the strategy entry signals.
Coloration:
When the close price is above both the middle/basis and the trend filter, the bars are colored lime green, indicating a potential bullish market sentiment. When the close price is positioned above the basis but below the trend filter, or below the basis but above the trend filter, the bars are colored yellow, signifying a neutral or indecisive market condition. Conversely, when the close price falls below both the basis and the trend filter, the bars are colored fuchsia, suggesting a potential bearish market sentiment. Additionally, the coloration of the middle/basis line and the trend filter provides further visual cues for assessing the trend. When the close price is above the basis, the line is colored lime green, indicating a bullish trend. Conversely, when the close price is below the basis, the line is colored fuchsia, highlighting a bearish trend. Similarly, the trend line is colored lime green when the close price is above it, representing a bullish trend, and fuchsia when the close price is below it, indicating a bearish trend. The fill between the primary and secondary upper bands is colored lime and the fill between the primary and secondary lower bands is colored fuchsia. These colorations can be toggled on/off in the strategy settings menu.
How Changing Parameters Can Be Beneficial:
Modifying the parameters allows you to adapt the indicator to different market conditions and trading styles. For example, with Keltner Channels, increasing the compression period can help identify broader volatility patterns and major market shifts. On the other hand, decreasing the compression period provides more precise and timely signals for short-term traders. Adjusting the compression multiplier affects the width of the Keltner Channels. Higher multipliers increase the breakout threshold, filtering out smaller price movements and providing more reliable signals during significant market shifts. Lower multipliers make the indicator more sensitive to smaller price ranges, generating more frequent but potentially less reliable signals.
Changing the type of trend filter can drastically change your results. Test out each trend filter type and determine which one will work best for your purposes. Further, the MA periods in the trend filter settings can help you align your trades with the prevailing market direction. Increasing the period smoothes out the trend, filtering out shorter-term fluctuations and focusing on more sustained moves. Decreasing the period allows for quicker responses to changes in trend, capturing shorter-term price swings.
By adjusting the parameters and incorporating additional analysis techniques, you can customize the strategy to suit your trading style and preferences. However, it is crucial to exercise caution, conduct thorough analysis, and practice proper risk management to increase the likelihood of successful trades. Remember that no strategy can guarantee profits, and continuous learning and adaptation are key to long-term trading success.
Take Profit/Stop Loss Settings:
Take profit, stop loss, and trailing percentages are also included, found at the bottom of the Input tab under “TT and TTP” as well as “Stop Loss”. The take profit and stop loss levels will be reflected as green and red lines respectively on the chart as they occur. Make sure to understand the TP/SL ratio that you desire before use, as the desired hit rate/profitability percentage will be affected accordingly. The option for adding in a trailing stop has also been included, with options to choose between an ATR-based trail or a percentage-based trail. This strategy does NOT guarantee future returns. Apply caution in trading regardless of discretionary or algorithmic. Understand the concepts of risk/reward and the intricacies of each strategy choice before utilizing them in your personal trading.
Profitview/Pineconnector Settings:
If you wish to utilize Profitview’s automation system, find the included “Profitview Settings” under the Input tab of the strategy settings menu. If not, skip this section entirely as it can be left blank. Options will be “OPEN LONG TITLE”, “OPEN SHORT TITLE”, “CLOSE LONG TITLE”, and “CLOSE SHORT TITLE”. If you wished to trade SOL, for example, you would put “SOL LONG”, “SOL SHORT”, “SOL CLOSE LONG”, and “SOL CLOSE SHORT” in these areas. Within your Profitview extension, ensure that your Alerts all match these titles. To set an alert for use with Profitview, go to the “Alerts” tab in TradingView, then create an alert. Make sure that your desired asset and timeframe are currently displayed on your screen when creating the alert. Under the “Condition” option of the alert, select the strategy, then select the expiration time. If using TradingView Premium, this can be open-ended. Otherwise, select your desired expiration time and date. This can be updated whenever desired to ensure the strategy does not expire. Under “Alert actions”, nothing necessarily needs to be selected unless so desired. Leave the “Alert name” option empty. For the “Message”, delete the generated message and replace it with {{strategy.order.alert_message}} and nothing else. If using Pineconnector, follow the same directions for setting up an alert, but use the ",buy,,risk=" syntax as noted in the tooltips.
Additional Sample Settings (for ETHUSDT-Binance 45M):
Band/Channel Type - Keltner Channels (Compression Period of 20, Multiplier of 1.8x)
Trend Filter - WMA (50 length, no offset, close as the source)
TP/SL - 3.0% TP / 2.0% SL, 0.005 trailed TP, no trailed SL
