See below for information about how you can test your own strategies and purchase the spreadsheet described in this article. I have written a number of times about the SuperTrend technical indicator. If you want to read more check out the article links at the bottom of the page.
The Linear Regression line is a statistical tool that identifies the best straight line fit through the price. I find it a very helpful tool in my trading.
In the basic strategy I use a 50 period Linear Regression line. The SuperTrend is designed to follow the trend. However, in this trading strategy I am using the Linear Regression to identify the trend. So I am going to reverse the SuperTrend and enter Long when the indicator turns negative.
The logic of this is to enter on a temporary weakness in the expectation that the market will continue in the direction of the trend. In this strategy I use the standard settings of a 20 period lookback and an offset of 2. Bollinger Bands are another indicator that I use regularly. They are a good way to set exit levels that adjust to market conditions.
Everybody has their own natural style of trading. Whether you like to take profits quickly or leave them to run as far as possible. What type of indicator you like and what timeframe you use. The best way to discover and refine your strategies is to test them using historic data.
One of the easiest ways to do this is to use a Tradinformed Backtest Model. These are spreadsheet based models and can be used by anyone with some basic Excel skills. You can now purchase the model demonstrated in this video. See the model in the Tradinformed Shop: Make Profits in Noisy Markets. Changing the filter from the Linear Regression to the EMA showed a clear improvement in this strategy over the assessment period.
The improved strategy has a higher overall profit and an improved profit factor. It also has a higher number of winning trades. This test shows that small adjustments to a strategy can sometimes make big improvements. It would be easier to further improve this strategy by testing different factors. In this article I show how you can calculate the SuperTrend using Excel. If you want to use the SuperTrend in MT4 check out this article: As the name suggests, the SuperTrend technical indicator helps to identify market trends.
SuperTrend The SuperTrend is designed to follow the trend. Bollinger Bands Bollinger Bands are another indicator that I use regularly. Other Articles You Might Like.More...