TLDR - If you want the Python script - just message me I’ll happily send it free
I’m sharing the strategy below which was quite successful during volatile fundamental shocks that might help a struggling trader. It will work but to achieve similar results you’ll need some pretty good architecture behind it but still some good alpha to be had.
Ceyx 1 looks for an explosive upward trend breakout of key resistance levels. Basically a Resistance Breakout model (we implement it for support levels also to keep the bot delta neutral)
What is a breakout of a Resistance level?
A breakout occurs at times when intense demand causes the price to break through a level of resistance and continues to move in the same direction.
The strategy
For this strategy, we are going to use Agglomerative Clustering (or POC - Market Profile Points of Control) and the Average Directional Index (ADX).
ADX can be found on Tradingview.
Agglomerative Clustering is slightly more complicated and you need some technical know-how, but Market Profile Points of Control works also. Can be found on Tradingview.
Here’s the plan for the ‘Resistance Breakout’ Strategy:
Long Entry:
- First, we need to determine the levels of support and resistance for a range of dates using POC/AC.
- Find events when the price rises to a level of resistance and breaks through that level.
- Use ADX to determine the strength of the trend. Check for a value of >25 to confirm a strong trend
- Make sure ADX positive (+DI) and negative (-DI) indicators for the price direction. +DI has to be above the -DI to confirm up trend.
Long Exit
We exploit that first, explosive upward trend after the breakout.
- Trailing SL of 1%
- SL of 5%.