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Heyping Moving Average Trend Strategy

Author: ChaoZhang, Date: 2024-01-03 12:18:29
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Overview

The Heyping Moving Average Trend Strategy is a technical indicator combo strategy designed to track price trends. It generates entry and exit signals based on moving average crossovers to time the market. The strategy can be implemented on the TradingView platform and optimized for performance.

Strategy Logic

The KP strategy utilizes three types of indicators:

  1. Moving Averages: A faster EMA and slower SMA. The EMA reacts faster to price changes while the SMA is more stable. Crossovers between the two produce trade signals.

  2. Heiken Ashi Candles: Special candlestick charts with clearer trend definition. Used as the price data source for plotting the EMAs.

  3. Log Transformation: An option to log transform price data to better visualize percentage changes.

The specific logic is to go long when the faster EMA crosses above the slower SMA, and to exit the position when the reverse crossover happens. This strategy belongs to the trend following category.

Advantage Analysis

  1. Highly customizable parameters catering to different products and timeframes
  2. Visual indicators combined into an easy-to-read system
  3. Log transformation option to handle volatile instruments
  4. Heiken Ashi candles offer superior trend determination
  5. Integrates stop loss to control risk

Risk Analysis

  1. Trend reversal risk. Timely stop loss required
  2. Careful parameter optimization to avoid overfitting
  3. Instrument and timeframe selections greatly impact results
  4. Robustness must be validated through backtesting

Optimization Directions

  1. Add adaptive parameter optimization module
  2. Incorporate more filters to avoid false signals
  3. Build algo trading module for automation
  4. Apply machine learning models at inflection points
  5. Enhance stop loss strategy for dynamic trailing stop loss

Conclusion

The Heyping Moving Average Trend Strategy combines various technical indicators to define trend directions with flexible configurations and great visualization. It can serve as a baseline trend following strategy and be further tuned for live trading while noting no strategy is perfect. Risk management is key.

/*backtest
start: 2022-12-27 00:00:00
end: 2024-01-02 00:00:00
period: 1d
basePeriod: 1h
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/

//@version=5
strategy("KP 15min Strategy", shorttitle="KP15", overlay=false)

res = input("D",title="Heikin Ashi Candle Time Frame")
hshift = input(0, title="Heikin Ashi Candle Time Frame Shift")
res1 = input("W",title="Heikin Ashi EMA Time Frame")
mhshift = input(0, title="Heikin Ashi EMA Time Frame Shift")
fama = input(10, title="Heikin Ashi EMA Period")
test = input(0, title="Heikin Ashi EMA Shift")
sloma = input(100, title="Slow EMA Period")
slomas = input(0, title="Slow EMA Shift")
logtransform = input(false, title="Log Transform")
stoploss = input(true, title="Stop Loss")
showplots = input(true, title="Show Plots")

ha_t = request.security(syminfo.tickerid, res, expression=hlc3)
ha_close = request.security(syminfo.tickerid, res, expression=logtransform ? math.log(close[hshift]) : close[hshift])
mha_close = request.security(syminfo.tickerid, res1, expression=logtransform ? math.log(close[mhshift]) : close[mhshift])

fma = ta.ema(mha_close[test], fama)
sma = ta.ema(ha_close[slomas], sloma)

plot(showplots ? (logtransform ? math.exp(fma) : fma) : na, title="MA", color=color.new(color.blue, 0), linewidth=2, style=plot.style_line)
plot(showplots ? (logtransform ? math.exp(sma) : sma) : na, title="SMA", color=color.new(color.orange, 0), linewidth=2, style=plot.style_line)

golong = ta.crossover(fma, sma)
exitLong = ta.crossunder(fma, sma)

if (golong)
    strategy.entry("Buy", strategy.long)

if (exitLong)
    strategy.close("Buy")
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