![]() The ROI setting that originally would take profit after a 50% gain was optimised so that it would take profits earlier and therefore is the biggest optimisation of this hyperopt session. This means that a trade could be stopped out quicker but of course also that the stop would save another 2% of funds if it proved that it was a bad trade. But instead the hyperopt session calcualted it would be better to tighten the stop loss space even more to a 3% loss after a trade occurs. I expected a change in the stop loss setting and to be honest I thought that this stop loss space would get bigger. Hyperparameter optimisationĪgain something interesting occurred after the hyperopt session and backtesting this result Nonetheless I will do a hyperopt session on the ROI and Stop Loss setting to find out if this strategy can be improved on these settings and by how much. Luckily the sell-signal of the strategy has a high enough profit to still make some money but the drawdown and risk of ruin are so high that I personally would not use this strategy. You can see from the backtest results that the stop loss setting is the main cause of these sells. Let me first say that the results of this backtest were somewhat expected as I personally found the stop loss setting of only 5% quite tight. Initial backtest resultsĪccording to the backtest over all the available timeperiods I have the following results: See the code of this notebook at the end of this blog. See the video for an explanation of the Google Colab notebook. But you should always stay aware of support and resistance at these levels so be careful when reacting to these signals. This could be a signal that the market is not ready to reverse yet and will trend even further. Last thing I’d like to point out is that during the countdown phase a new setup phase can also start. Another way that ends this countdown phase is when a bearish setup is finished (9th candle of a bearish trend).Īt that time a strong signal is given that the market could reverse and you should take this into consideration when determining your next trade. If this is not the case, then the countdown phase remains until this is true. The final 13th candle should close above the 8th candle in order for this sequence to finish. If at some point the candle is closing higher than the candle of two days ago, then this will add to the countdown phase candle counter. So every time a candle closes higher than the one two days ago will be counted as a countdown phase candle.Īnother difference is that these candles do not necessarily have to be sequential, in other words, there can be candles in between that close lower than the candle of one or two days ago. Instead of looking at the candle from four days ago to count as a higher candle, it looks at the candle of two days ago. ![]() There is a difference in the way the candles in this phase are counted. When the 9th candle of the setup phase is closed this will become the first candle of the countdown phase. Now, When the 9th candle is marked, then the setup phase is finished, then the first signal is given and at that time you should be cautious of a reversal of the trend.Īlso after this 9th candle, the second phase starts and that is the countdown phase.Īt this point the 9 candles from the setup phase form a sort of base to build this countdown phase on. If during this phase one candle closes belows the candle four days ago, the setup has failed and you have to start over again. If the third candle also closes higher than the candle 4 periods ago, it is marked with three… ![]() If the second candle in the setup phase also closes higher than the candle 4 periods ago, then it is marked with two. The setup phase starts with the first candle when this candle closes higher than the candle of the last 4 periods ago. So instead of higher closes, they should be lower closes. The bearish setup is exactly the same instead everything is reversed. And also that this indicator is useful on all timeframes. There is documentation that states that this tool is especially useful in ranging markets to enter long or short positions. It tries to determine reversals in a trend and thereby give you clues or signals to take a trade because of that signal. Now, What the TD sequential does is counting candles and the position they closed in comparison to the previous candles. The TD sequential is quite an interesting strategy which is also a little bit complex if you see it the first time. ![]() This strategy originally was created by Tom Demark and that’s where the TD in “TD sequential” stands for. The code actually was created by so all credits go to him for providing us with this script. In this video I am going to test the “TD sequential” strategy.
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