Hi all.
Today I want to talk about one trading strategy, which is a mixture of classical indicators and indicators based on artificial intelligence.
I have long been immersed in resource-based trading that uses AI in its work. And this saves a huge amount of time searching for entry points; testing strategies takes seconds, not hours and days.
Unfortunately, this is not developed at all in Russia, so on my YouTube and Instagram I decided to talk as often and as much as possible about different AI-based trading strategies.
So, let's begin.
I will explain this strategy for TF for 2 hours.
If you need to adapt it to your work TF, then the logic will be clear to you.
In the pictures below you see 2 indicators that we will use with you, as well as the third indicator - the relative strength index.
https://ru.tradingview.com/v/AjWfiZpw/
https://ru.tradingview.com/v/d02pz13s/
First, we need to configure the first indicator.
AI Moving Averages change the color of the moving averages to white so that it does not bother us.
Next, change the CC length from 50 to 30. Check the Activate Machine Learning box. In the drop-down list of the Amount of Historical Data item, set All Data
In the style section, uncheck the box next to Tables.
On the Surbollingertrend indicator, in the Style section, uncheck the Superbollingertrend box
And we remove another one in the Lines column
In the Arguments section, change the period from 12 to 15.
If you focus on the current signal indicators, you can see that they are not yet entirely accurate. That is, there are a lot of unnecessary signals. Our task is to make this number of signals much smaller. Therefore, we need the relative strength index to help us.
If we use it in its classic form, then if we are given a signal on the chart for Long and RSI is greater than 50, then the trend often fades and reverses.
We need to set the RSI value so that the trend impulse still continues and there is as little chance of it fading as possible.
Therefore, we draw lines on the index at values 55 and 45. They will be triggers for entering Long or Short.
The trigger for Long will be a signal from the indicator to enter Long when the 30MA is broken and the RSI value is above 55.
The trigger for entering a short position is the red candle breaking the 30MA downwards and the index value below 45.
If there is a signal from the indicator for long or short, but the price does not break through 30MA. Entering a transaction with increased risks. The same applies, if there is a signal from the indicator for Long or Short and the 30MA breaks through, but the value on RSi is less than 55 or more than 45, that is, it is in the range of 45-55, then it is better not to enter into the transaction.
The picture above is a short signal. The candle broke through 30 MA, RSI is below 45. The conditions are met.
Picture above. Long signal. The green candle broke through 30MA, RSI is above 55. All conditions are met.
Picture above. The green candle broke through 30MA, but the RSI is below 55. One of the conditions is not met. High risk transaction.
How to place stops and takes?
It is optimal to work with a trailing stop.
The logic of setting a stop and Lake is such that if you enter a Long position, then place a stop on the shadow of the previous candle. If the shadow of the previous candle is at the level of the current entry point, then the stop is placed at the shadow of the candle that was even earlier.
Next, you use a ruler to measure the distance from the stop to the entry point and calculate the take with a min ratio of 1 to 2.
In the case of going short, the principle of setting a stop and take is mirrored by Longs.
