This strategy mainly uses dual moving averages as buy and sell signals to profit from trend reversals. It goes long when the short-term moving average crosses above the long-term moving average, and goes short when the short-term moving average crosses below the long-term moving average. It belongs to a common trailing stop loss strategy.
The strategy first sets up two moving averages, one shorter-term 20-day MA and one longer-term 60-day MA. It then judges the crossing situations between the two MAs to determine entry.
Specifically, when the short-term MA crosses above the long-term MA, it signals an uptrend, so go long. When the short-term MA crosses below the long-term MA, it signals a downtrend, so go short.
The stop loss method after going long or short is trailing stop based on highest price and lowest price to lock in maximum profit.
The main logic of the code is:
The advantages of this strategy are:
There are also some risks:
To address the risks:
The strategy can be further optimized in the following areas:
Add other filters like RSI for multi-condition entry, avoiding false breaks.
Optimize MA periods to find best parameter mix. Can test different periods by incremental walk forward.
Optimize stop loss range through backtest calculation to find optimum range. Can also use dynamic stop loss.
Set re-entry logic after stop loss exit to reduce trade frequency.
Combine with trend indicator to pause trading when trend is unclear.
Add position sizing and dynamic stop loss based on market conditions.
In summary, the dual MA reversal strategy is simple and practical overall, identifying trend turning points through dual MA crossovers. But there are risks that need parameter tuning, stop loss optimization, and adding filters to maximize strategy efficacy. With meticulous optimization and disciplined risk management, it can become a steady profit-bearing swing trading strategy.
/*backtest start: 2023-09-23 00:00:00 end: 2023-10-15 00:00:00 period: 1h basePeriod: 15m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=2 strategy("Noro's Bands Scalper Strategy v1.4", shorttitle = "Scalper str 1.4", overlay=true, default_qty_type = strategy.percent_of_equity, default_qty_value=100.0, pyramiding=0) //Settings needlong = input(true, defval = true, title = "Long") needshort = input(true, defval = true, title = "Short") takepercent = input(0, defval = 0, minval = 0, maxval = 1000, title = "take, %") needbe = input(true, defval = true, title = "Bands Entry") needct = input(false, defval = false, title = "Counter-trend entry") needdb = input(true, defval = true, title = "Double Body") len = input(20, defval = 20, minval = 2, maxval = 200, title = "Period") needbb = input(true, defval = true, title = "Show Bands") needbg = input(true, defval = true, title = "Show Background") src = close //PriceChannel 1 lasthigh = highest(src, len) lastlow = lowest(src, len) center = (lasthigh + lastlow) / 2 //Distance dist = abs(src - center) distsma = sma(dist, len) hd = center + distsma ld = center - distsma hd2 = center + distsma * 2 ld2 = center - distsma * 2 //Trend trend = close < ld and high < center ? -1 : close > hd and low > center ? 1 : trend[1] //Lines colo = needbb == false ? na : black plot(hd2, color = colo, linewidth = 1, transp = 0, title = "High band 2") plot(hd, color = colo, linewidth = 1, transp = 0, title = "High band 1") plot(center, color = colo, linewidth = 1, transp = 0, title = "center") plot(ld, color = colo, linewidth = 1, transp = 0, title = "Low band 1") plot(ld2, color = colo, linewidth = 1, transp = 0, title = "Low band 2") //Background col = needbg == false ? na : trend == 1 ? lime : red bgcolor(col, transp = 80) //Body body = abs(close - open) smabody = needdb == false ? ema(body, 30) : ema(body, 30) * 2 candle = high - low //Signals bar = close > open ? 1 : close < open ? -1 : 0 up7 = trend == 1 and ((bar == -1 and bar[1] == -1) or (body > smabody and bar == -1)) ? 1 : 0 dn7 = trend == 1 and ((bar == 1 and bar[1] == 1) or (close > hd and needbe == true)) and close > strategy.position_avg_price * (100 + takepercent) / 100 ? 1 : 0 up8 = trend == -1 and ((bar == -1 and bar[1] == -1) or (close < ld2 and needbe == true)) and close < strategy.position_avg_price * (100 - takepercent) / 100 ? 1 : 0 dn8 = trend == -1 and ((bar == 1 and bar[1] == 1) or (body > smabody and bar == 1)) ? 1 : 0 if up7 == 1 or up8 == 1 strategy.entry("Long", strategy.long, needlong == false ? 0 : trend == -1 and needct == false ? 0 : na) if dn7 == 1 or dn8 == 1 strategy.entry("Short", strategy.short, needshort == false ? 0 : trend == 1 and needct == false ? 0 : na)template: strategy.tpl:40:21: executing "strategy.tpl" at <.api.GetStrategyListByName>: wrong number of args for GetStrategyListByName: want 7 got 6