I will start with the context, and some things to think about when using a strategy tool to back-test ideas.
CONTEXT FIRST: This is derived from other people's work, but I honestly hadn't found a mixed indicator MA strategy tool that does what this now does. If it is out there, apologies!!
This tool can help back-test various MA trends (SMA, EMA, HMA, VWMA); as well as factoring in RSI levels (or not); and can factor in a fixed HTF MA (or not). You can apply a 'retest entry' or a 'breakout entry', and you can also apply various risk mgt for SL/TP orders: 1) No SL/TP; or 2) a fixed %, or 3) dynamic ATR multipliers.
Find below, some details explaining what this tool is attempting to do. Thank you, tack, salute!
THINGS TO REVIEW (it is not just about 'profitability'!!) Whilst discretion is always highly encouraged as a trader, and a 100% indicator-driven strategy is VERY unlikely to yield sustainable results going forward, at the very least back-testing your strategies can help provide some guidance, not just on win rate Vs profit factor, but other things including:
a) Trade frequency: if a strategy has an 75% win rate and profit factor of 4, with all your parameters and confluence checks, but only triggers 3 trades every 5 years, is that realistically implementable to your trading situation if you have a $10,000 account? b) Trade entry type: is it consistently better to wait for a retest of an 'MA zone', or is it better to market buy/sell on breakout of the 'MA zone'? c) Risk management (SL/TP): is it consistently better to have a fixed static % for SL/TP ("I always place my stops 2% away, whether it is EURUSD or BTCUSDT"), or would you be better placed to try using an ATR multiplier of the respective assets? d) Moving average type: is your old faithful 100 EMA really serving you well, or is the classic SMA more reliable, or how about the HMA, or the VWMA? Is the 100/200 cross holding up, or do you need something more sensitive? Is there any significant difference between a 10 EMA/20 EMA trend zone compared to a 13 EMA /25 EMA zone? e) Confluence: Do added confluence checks (RSI, higher timeframe MA) actually improve profitability? But even if they do, is at the cost of cutting too many trades? [See point a) above]
INPUTS AND PARAMETERS Choice 1) Entry Strategy: Retest or Breakout - You can select both! [[CONFLUENCE checks: a) Fast MA > Trend MA > SlowMA; AND b) Price (close) is above fixed HTF MA; AND c) RSI is above your chosen level. And vice versa for shorts. Note: you can effectively 'disable' confluence checks (see info tooltips when selecting your options)]]:
a) RETEST entry strat: price crosses UNDER FastMA INTO the 'MA trend zone'. b) BREAKOUT entry strat: price crosses OVER FastMA OUT the 'MA trend zone'.
Choice 2) Risk Management (SL and TP) - You can select more than 1 strategy! a) No SL/TP: Long trades are closed when the LOW crosses back UNDER the fastMA again, and shorts are closed when the HIGH crosses back OVER the fastMA again. b) Static % SL/TP: Your SL/TP will be a fixed % away from avg. position price... WARNING: You should change this for various asset classes; FX vol is not the same as crypto altcoin vol! c) Dynamic ATR SL/TP: Your SL/TP is a multiple of your selected ATR range (default is 50, see 'info' when you select ATR range). ATR accounts for the change in vol of different asset classes somewhat, HOWEVER... you should probably still not have the same multiplier trading S&P500 as you would trading crypto altcoins!
Then select your preferred parameters: EMA, SMA, HMA, VWMA, etc. You can mix and match, and most options have a info/tooltip guide. RSI note: If you don't care for RSI levels, then set buy signal at 1... i.e always buys! Similarly set sell signal at 99. ATR note: standard ATR length is usually 14, however... your SL/TP will move POST entry, and can tighten or widen your initial SL/TP... for better AND usually for worse! Go find a trade (strat 3) on the chart, look at the SL/TP lines, now change the number to 5, you'll see. Fixed HTF MA note: If you don't care for HTF MA confluence, just change the timeframe/options to match the 'Slow MA' options you've chosen.
According to your presented strategy tester, the total closed trades in the 4h timeframe is 87, but when the strategy is implemented in my chart on the 4h timeframe it states that it has 66 trades total closed trades. Why does it vary?
crmwrsln
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btw we are in the same 4h BTC/USDTPERP chart
RoyalNegroni
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@crmwrsln, firstly it will be a change in parameters (I think I had Strat 1 AND Strat 3 selected when I submitted this to Tradingview). I believe the default mode is Strat 3 only. I may even have tweaked the RSI buy/sell triggers (I think it may have been 52 and 48, now it is 55 and 45). The second reason for variance will have been when Tradingview took that snapshot when I submitted this to publication (even though I submitted this early March, I think their snapshot was only up to February... I didn't choose that profit/performance image). If you open the strategy now (with Strat 1 and 3) it will be nearer 120 trades because there have been more trades in the last month, since that snapshot.
traderseth17
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Can i see the trades intraday on this strategy live on a 15 min or 5 min chart? i only see the trades after hours.
RoyalNegroni
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@traderseth17, Hey! Yes you can see the trades intraday. The trigger is only on the candle's 'close' though; so for example if you are on a 15 min chart, and you are using the 'retest' entry strategy, once the 15 minute candle CLOSES under the FastMA into the MA Trend Zone (whatever parameters you have selected) then the entry will sho on the open of the very next candle (also depending on whatever RSI and Higher TimeFrame MA checks you have!)