Comparative analysis of 10 flat trading strategies
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, 08-17-2018 at 03:12 AM (764 Views)
Trend following strategies are very popular and easy-to-use, especially for beginners. However, current markets have become more dynamic, while trend movements are less distinct (in terms of both range and duration). By not using the possibility of trading in flat or sideways markets, we lose potential profits. Trend following trading rules are simple: identify the signs of a trend and try to capitalize on it. Trading in flat periods differs much from that. During sideways movement, the price is in a small range and may stay unchanged for quite a long time. There is no directional movement in the market, and liquidity is low.
Table of Contents
- Introduction
- Defining the task when creating a flat trading strategy
- Flat trading strategies
- Strategy #1. The Envelopes indicator with the MFI-based filter
- Strategy #2. Bollinger Bands and two Moving Averages
- Strategy #3. WSO & WRO Channel with a filter based on Fractal Dimension Ehlers
- Strategy #4. The Percentage Crossover Channel indicator and the TrendRange-based filter
- Strategy #5. The Price Channel indicator and the RBVI-based filter
- Strategy #6. The Williams Percent Range indicator and the ADX-based filter
- Strategy #7. Modified Keltner channel and the Magic Trend-based filter
- Strategy #8. Donchian channel with a confirmation by Trinity Impulse
- Strategy #9. The ATR Channel indicator and a filter based on CCI Color Levels
- Strategy #10. RSI histogram and a filter based on the Flat indicator
- Testing
- Findings
- Conclusion
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