Trident

28 ต.ค. 2021

I call this strategy "Trident", as it uses three different, modified, customizable indicators:

• 50 Exponential Moving Average (Trend)
  
• Relative Strength Index (Momentum)
  
• Average Directional Index (Volatility)

Strategy will be improved with future updates. You alone decide when to enter and when to exit a trade. PRICE ACTION IS KING and the TREND IS YOUR FRIEND

What do these three indicators tell us
Exponential Moving Average:

• Trend
  
• Price < EMA = downtrend
  
• Price > EMA = uptrend
  
• trend direction and reducing noise
  

Average Directional Index:

• Volatility
  
• direction of market movement when there is a sharp increase in volatility
  

Relative Strength Index:

• Momentum
  
• Strength
  
• Possible shift in momentum
  

How this strategy works
As I mentioned above, this strategy uses uses three different, modified, customizable indicators:

• Exponential Moving Average (50) (Trend): When price closes above or below the 50 period EMA, then the first condition is met. I know some people use multiple EMAs as dynamic support and resistance levels. Therefore, I also added a 21 and a 200 period EMA, but this strategy uses specifically the 50 period EMA as one of three conditions. All EMAs can be adjusted, turned on and off.
  
• Relative Strength Index (80, 20, 3) (Momentum): In his video, TSM uses a 3 period RSI and 80 and 20 bands. If price is above 80, it`s overbought and if it`s below 20, then it`s oversold. Two out of three conditions are met.
  
• Average Directional Index (5, 5) (Volatility): TSM uses the ADX to measure the volatility. Both ADX Smoothing and DI Length are set to 5. If this indicator moves above 30, then the third contidion is met.
  

Rules to enter the trade
Long Entry:

• 50 EMA < Price
  
• RSI < 20
  
• ADX > 30
  
• Enter trade at breakout of high of the green candle, which is the candle that pulls the RSI from oversold conditions back inside.

Short Entry:

• 50 EMA > Price
  
• RSI > 80
  
• ADX > 30
  
• Enter trade at breakout of low of the red candle, which is the candle that pulls the RSI from overbought conditions back inside.

Risk:Reward and Timeframe

• Use a 1:1 to 1:1.5
  
• Set your S/L below key levels (-> 2nd point @ Tips), or twice the length of the signal candle
  
• Preferably 5 Minute Time Frame, but at the end you decide
  

Tips

• Avoid periods of consolidation
  
• Trade from support/resistance-levels, supply/demand-levels, pivot points-levels, Fibonacci-levels, swing high/low-levels
  
• Trade during market hours, for example London and New York Session
  
• Trade narrow spreads, if you scalp
  
• Use Price Action
  
• Trade with the trade, not against
  
• The further away the price moves from the EMA the stronger the trend
  
• The long the price doesn't touch the EMA the stronger the trend
  
• RSI + ADX: Confirm when the market is turning and pick a good entry point
  
• ADX + 50 EMA: Filters trades when there is not much activity in the market

I mentioned above that the code of this strategy is still under development. You can not only rely on this strategy alone as it might give you false signals. I coded this, because it makes it easier to visualize were all three conditions are met.
Use your brain, use price action, use these tips, use this strategy.

Frequently Asked Questions

• Does it only work for scalping? - No, but try it out yourself
  
• Does it only work for Forex? - No, but try it out yourself
  
• Does only work on the 5 Minute Timeframe? - No, but try it out yourself

Good Luck!

31 ต.ค. 2021

เอกสารเผยแพร่

Updated the Alert function. Now it takes all three indicators into account for proper alerting.

6 พ.ย. 2021

เอกสารเผยแพร่

I have added take Profit and Stop Loss bands to the Trident 🔱 Indicator, which are trailing.
There are three bands which are based on the ATR value.
Inner Bands = ATR value * 1 to 1.5
Middle Bands = ATR value * 1.5 to 2
Outer Bands = ATR value * 2 to 2.5
The bands represent the volatility for each bar and their thickness shows where to approximately place your TP/SL.

NOTE: Color green does not always represent TP and red does not always stand for SL.
LITTLE WARNING: The volatility can still throw you out of the trade. Personally I have had good results when the zones were in confluence with Support/Resistance zones.

16 พ.ย. 2021

เอกสารเผยแพร่

Indicator won't be updated anymore! A new, similar and a much improved one, called "Master Chef" will be released soon.
Reason: Current indicator used pine script version 4 and since I like keeping thing up-to-date I decided to create a new one with version 5.