Overview

This strategy is a momentum trading strategy based on the QQE (Qualitative Quantitative Estimation) indicator. It uses the QQE indicator to identify opportunities in stock prices and moving averages to filter out false signals.

Strategy Logic

The strategy uses 3 types of QQE indicator crosses to identify buy/sell opportunities:

1. QQE curve crossing 0 axis (XZ): Early signal of price reversal when overbought/oversold.

2. QQE curve crossing fast QQE line (XQ): Opportunity of short-term price adjustment.

3. QQE curve exiting RSI channel (XC): Opportunity of mid-term price adjustment.

When a buy/sell signal is identified, the strategy also checks the moving average indicator as an additional filter to avoid wrong trades in non-trending situations:

1. Fast MA above medium MA, medium MA above slow MA.

2. Medium MA direction upward (for long signal) or downward (for short signal).

Advantages

The strategy combines QQE for opportunity identification and moving averages for signal quality improvement, with the following main advantages:

1. QQE crosses capture opportunities at different price reversal levels.

2. Moving averages effectively filter out false breaks.

3. Flexible parameters suit different products and timeframes.

4. QQE crosses can be used alone or combined with other filters.

Risks

The main risks of the strategy include:

1. More false signals may occur in ranging markets.

2. Moving averages as lagging indicator may filter some valid signals.

3. Improper parameter tuning leads to extended drawdown or missed opportunities.

4. Appropriate stop loss/profit taking mechanism required to limit loss per trade.

Enhancements

The strategy can be enhanced from the following aspects:

1.Tune QQE parameters to suit securities of different volatility levels.

2.Optimize moving average parameters for better filtering performance.

3.Add other filters e.g. volume filter.

4.Introduce stop loss and take profit to control trade risk.

5.Evaluate actual trading results and fine tune key parameters.

Summary

The strategy integrates QQE signal identification and moving average directional filtering into a quality momentum trading system. It is adaptable through configurable parameters for differentiated needs. With proper stop loss/profit taking, steady returns can be expected.