This is the full version to my system code published yesterday. That was purely a backtest version while this one is the real deal. Refer to that previous publication for some more written detail here ( https://www.tradingview.com/script/M5H6r...). I decided to publish it for free for the time being so people have a proper idea of how it works and whether or not it would add value to your trading arsenal.
I thought it would be beneficial for people to have access to the full system in order to understand how it works hands-on and I also decided to record a video to showcase how it works in a live trade situation as well a more in-depth explanation of the intuition behind it. If you want the full explanation, watch the first video, and if you want to just see how it works live then check out the second.
Just a quick look at performance:
- 5,807% over the last 2 years (from 01/03/2017) on XBTUSD (Over 2,700% over the same period on other exchanges)
18,150% over the lifetime of trading BTCUSD on Coinbase
215,546% over the lifetime of trading BTCUSD on
55,000% over the last 3 years on ETHUSD (Coinbase etc)
Here are the links to the two videos:
https://youtu.be/sax0zv2x6Pg - This is the live example
*This is an update to the original public release of the Gouws Trend System or GTS. The main difference here being the Trend Horizontal is replaced by Candle Fill-Colour changes.
*The candle fill-colour in this system changes based on a trend momentum filter in the background. The traditional colour change based on OHLC is still seen in the border/outline colour of the candle so you can still see whether it was a down or an up candle, but the colour with which it is filled will change based on the momentum calculations in the back-end*
TLDR usage instructions (See below for more in-depth instruction and screenshot examples)
Prior Candle Fill-Colour = Indicative of current trend momentum.
Blacked Dashed Line = Execution Horizontal (Trades executed here based on trend info and active
Prior Candle Filled Green + Black Dashed Line Broken Upward = Long/Buy
Prior Candle Filled Green + Black Dashed Line Broken Downward = No Trade (possible buy setup
Prior Candle Filled Red + Black Dashed Line Broken Downward = Short
Prior Candle Filled Red + Black Dashed Line Broken Upward = No Trade (possible short setup forming)
Explanation and Intuition Behind the Strategy:
I used a combination of trend indicators/filters to automatically determine overall trend direction and momentum.
This plays into the lesson I have learnt from both professional traders, and through personal experience. “The trend is your friend”. Trading is made so much easier, with considerably less risk when you are trading with momentum and direction.
Because of this, I have designed the system to only look for buy entries when the trend filter has determined that an uptrend has been established and/or the momentum has shifted to the upside. The opposite is also true. If the momentum and/or trend has shifted to the downside, the system will only look for shorting opportunities/setups.
It then uses a combination of relative momentum points, support/resistance, volume, OHLC data and a modified sequential system to pinpoint significant price-levels. These points are dynamic and change with every candle close, and are used to determine conditional entries, stop-profit and stop-loss levels.
The UX is extremely simple. It shows you exactly where to enter, where to take profit and where to put in a stop-loss, all pre-emptively so you can set up your trades in advance at each candle close for that candle session. It is very simple, but highly effective, especially in trending markets and even more so in the crypto space where things move a little faster than usual. NOTE: I am currently working on modifying this strat for implementation in other markets as well.
The extended in-depth description is too long to publish in this one post, Tradingview has a word-limit it seems. See the comments below for either a link or a comment (depending on what TV is going to allow)
I have spent a lot of time trying to simplify the actual user method to be as basic and as easy to use as possible whilst both protecting my intellectual property (in the form of the unique background code) and offering others a chance to use the full front-end system as I would.
Updated Historical Performance on the 12 Hour Chart (This can be verified yourself using the bar replay feature):
- ~10,000% over the last 3 years (from 01/03/2017) on XBTUSD (~7,000-8,000% over the same period on
- ~50,000% over the lifetime of trading BTCUSD on Coinbase
- ~800,000% over the lifetime of trading BTCUSD on Bitstamp
Don’t forget to give me a follow on:
Email: firstname.lastname@example.org for questions
The fill colour of the previous candle (this shows the directional momentum and trend bias)
The thick dashed horizontal line on the chart, known as the Execution Horizontal (EH). A break of this line by the price executes a trade. The type of execution is determined by the colour of the candles as well as the position of the price relative to the line itself prior to the break.
If the prior candle-fill is green, and price breaks the EH upward
from below then a long or "Buy" trade is executed.
Once in the long trade, the stop loss is to be set at the last swing low since the previous break.
Upon the candle close the EH will also appear at this point and will continue to move towards
price as a trailing stop. It is based on the Parabolic SAR, and so anyone familiar with SAR will be
able to pick this up very quickly.
If the prior candle-fill is green, but you are not in a long/buy position, and you break the EH
downward, then you do nothing. You do not go short, because the candle-fill (i.e the trend
filter in the background) is indicating further possible bullish momentum. However, this does
provide a possible buy/long setup. On the next candle, the EH will appear above price. This means
that if prior candle-fill stays bullish (green) you can then enter another bullish trade according to
the previous dot-points' conditions for a long entry.
If the prior candle-fill is red, the momentum is bearish and so trades are executed as follows:
The opposite is true for the short entry. If the prior-fill is red, and the EH is broken to the
downside, you enter short. The stop is placed at the latest swing high since the EH break, and on
the next candle, the EH will appear at this point, eventually closing in on the price acting as a
trailing stop, much like the SAR.
Again, opposite rules apply to breaking the EH upward whilst momentum (prior candle-fill) is
bearish. No trade is entered, but a potential short setup is established.