Compound Trend Following Strategy
Overview
This article introduces a quantitative trading strategy that combines multiple indicators to determine trends. It tracks medium-to-long term price trends using moving averages, new highs/lows, yearly levels and more.
Strategy Logic
The strategy is based on:
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Using moving averages, new highs/lows index to determine price trend.
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Incorporating yearly levels to avoid short-term whipsaws.
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Entering on aligned indicator bundle signals to filter fakeouts.
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Trailing with supertrend to lock in trend profits.
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Stopping out on moving average breaches.
Advantage Analysis
Advantages of the strategy:
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Multiple indicators improve decision accuracy.
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Only trading clear trends avoids unnecessary trades.
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Supertrend trailing locks in profits and reduces drawdowns.
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Timely stop outs on breakouts improve win rate.
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Clear logic makes optimization intuitive.
Risk Analysis
Potential risks include:
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Multiple filters may cause missed trades.
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Supertrend trails could overly limit profits.
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Bad breakout stops cause unnecessary exits.
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Parameter tuning significantly impacts performance.
Conclusion
This strategy combines multiple technical indicators to determine trend. With proper optimization, it can achieve good returns. But traders should watch trend accuracy and adjust parameters accordingly.
/*backtest
start: 2023-08-16 00:00:00
end: 2023-09-15 00:00:00
period: 1h
basePeriod: 15m
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/
// This source code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © HeWhoMustNotBeNamed
//@version=4- 1