InemeBot

Building a Financial Free World

Introduction to Algo Trader system, trend detector

2 min read

The trend is our friend. 

But… what is the trend? How to track the trend? There will be dozens of methods. 

Today I’ll make a brief introduction of my Algo Trader System, which could well define and track the trend on 60 min and 240 min chart.

It was created and backtested in Esignal. 

I just translated it into MT4 for several days.

The logic of Algo Trader includes price action, pivot and my own trend following method.

It could work on 9 pairs (H1 and H4 timeframe):

EURUSD, DXY, GBPUSD, USDJPY, AUDUSD, NZDUSD, USDCAD, Spot Gold, WTI Oil

The basic logic are the same, but the calculation method and filters are different for every pair and every timeframe.

1. When short term trend, medium term trend and/or long term trend all turn green, and the price also closed above the upper bands, this should be a perfect buy opportunity, exit on price close below lower bands.

(The stop loss level could also be 5 pips below recent swing low)

2. When short term trend, medium term trend and/or long term trend all turn magenta, and the price also closed below the lower bands, this should be a perfect sell opportunity, exit when price close above upper bands.

(The stop loss level could also be 5 pips above recent swing high)

3. Timeframe:

H4–Medium term trade

H1–Intraday short term trade

3. Timeframe:

H4–Medium term trade

H1–Intraday short term trade

5. Combined with Elliottwave theory to maximize profit and avoid potential immature entries

For a long time, I traded on manually Elliottwave analysis and look for top and bottom signs at potential turning points.

After Algo Trader system was created, I find the whole work becomes very easy.

To my experience, try to trade wave 3 and wave 5 should be more profitable.

Now let’s see recently USDJPY uptrend from 104.63 to 111.39.

After all the candles are flagged on the chart, we find it is a textbook 5 wave rally.

However, it is extremely hard to identify it during the trend developing.

Combined with Algo Trader system, we could pick most of the movement in wave 3 and wave 5.

Also could avoid the sell trade of a potential double top formation in wave 5

Spread the love

Leave a Reply

Leave a Reply

Your email address will not be published. Required fields are marked *