How to generate profits with easy and basic indicators

เมื่อวาน

First post in a while, so please leave me feedback!

I'd like to start a series of posts where I explain and show how basic indicators can be utilized to maximize profits. Understanding basic indicators, such as MACD, RSI, Stochastics, Moving averages, etc are better than using advanced or complicated indicators. Often times, traders get caught up in trying to create the best indicator they can, but fail to realize that it won't perform well if they don't understand it. Instead, it is better to understand and learn which indicators control what kind of market, and how to tune each indicator to account for the market it is targeting.

In this example, I'll be focusing on the MACD and Linear Regression slope indicators. In my strategy, my MACD is slightly modified so that the smoothing function incorporates the WMA, TEMA in addition to the standard SMA and EMA. The difference between the 4 different types of moving averages may not seem significant since they're all a TYPE of moving average, but the difference becomes very clear when they're incorporated into a MACD calculation. As with many things in trading, there is no correct answer, but in this study I used the WMA simply because experience has taught me that the most recent point of data is the most important, which is utilized in the WMA calculation.

In addition to the MACD indicator, I add a Linear regression slope indicator. My script allows you to generate buy signals with the MACD indicator ALONE, or the Linear regression slope (LRS) indicator ONLY, or both. Similarly, the sell indicators are structured the same way. A take profit and stop loss is also utilized.

The LRS is designed to plot out 2 values: the linear regression value, and the slope of the linear regression value which is essentially the difference between 2 most current points. The buy indicator for LRS in my script can either be when the slope is increasing, when the linear regression value is greater than the price of the chart, or BOTH.

By combining the MACD and Linear regression into one script, we are left with 4 integer parameters to tune. In this example, we are using an initial capital of 10,000, with a 100% equity order size. The reason I am doing this is because I want to show how effective this strategy is compared to buying and holding Bitcoin under the same conditions. Assuming a commission of .1%, and a slippage of 10 ticks, this strategy is about +4000 compared to bitcoin (+25,000 vs +21,000.)

In the coming days and weeks, I'll be coming out with my simplified combo scripts that show how slightly modifying standard indicators, or combining 2 indicators can be better than using complicated indicators such as those claiming to be AI (artificial intelligence) or ML (machine learning) driven.

If you have any feedback, questions, or comments please leave them below! I am very transparent with over a decade of experience in data science and statistics, and an engineering background. Looking to help others! :)

Lastly, If you'd like to use my strategy and indicator, please send me a message. I also don't mind a challenge. Send me ANY chart, ANY market, ANY time frame, and I'll adapt a simplified (1-2 indicator) strategy to suit your needs.