This strategy involves using weekly and daily charts to assess the overall framework and trends, then moving to hourly charts for entry points. The ‘triple filter’ refers to utilizing three different time frames to generate a buying signal. Of course, the technical indicators used within each timeframe depend on personal preference. In my strategy, I use MACD and KD for filtering in larger timeframes, then rely on support and resistance for entry points in smaller timeframes. Hopefully, this concept sparks some inspiration for you as well.
Strategy Description
Below is the explanation for the entry points of this strategy, divided into two stages. A trade order will only be executed if both conditions are met.
First stage condition:
- The MACD value on the weekly chart decreases.
- The KD trend on the daily chart is downwards.
Once the above conditions are met, record the current support and resistance levels.
Second stage condition:
- If it’s a buy signal, execute the purchase when the price breaks above the resistance line and the current price is higher than the low of the daily chart’s candlestick.
Backtesting Validation
The backtesting time span of EUR/USD is from early 2017 to end of 2021. The spread is set to 20 pips on the EUR/USD H1 timeframe for validation.
Strategy Review
From the backtesting results, it’s evident that there’s room for further optimization. The overall profit over a 5-year period isn’t significant, and the trading volume is also relatively low. This has been a bottleneck I’ve been facing, and it might take some more time to identify the issues. Nonetheless, I’m sharing the entire EA source code, hoping that experts can provide guidance.