The main difficulty in the development of trend-following strategies
Trendsledyaschie strategy is simple in its logic, robust in the trade, but not all so simple ...
The strategy is necessary to solve a few subtle highlights, and the most difficult point is the portion of the change of the trend.
Consider a typical example:
Here, it seems, it began a strong movement against the trend, and there are two options
further development (lagging indicators with a signal at such a strong
move):
1. This is a strong pullback, and after some time the trend will continue.
2. This is a reversal of the trend, but the lights do not have time to identify it because
sharp price movements.
Work on pullbacks - it is against the ideology trendsledyaschih strategies so
the ideal solution is not to enter the market at such times, and wait
clarify the situation.
One solution to this problem is to fine tune intraday module (not to be confused with the general trend of the module).
That he will not take a position until a confirmation signal
the general trend.
But this solution is not the only thing - you can always find a few different
options for solving this problem.
Question: The general trend does not react to setbacks, which
can be very large. What can be done to reduce their impact on the
strategy results?
That the correction is possible, that's right - sawtooth currency movements
It has not been canceled, but the force rollback is not possible to calculate. Rollback can be
strong or weak, or horizontal, or generally can not be. here
question: Why rely on the figure, which is not possible to calculate?
The strategy should be based on rules that are clear and understandable, in this case,
availability and trend direction. That is why a modular applied
strategy building. And intraday trend module is designed for fixation
We arrived at strong pullbacks and this is why it is not recommended to trade only
the signals of the general trend.
There is another subtle point in trendsledyaschih strategies. it
when a trend changes direction with the transition through the flat section. This
The situation in large plots general trend is a rare, but very not
pleasant, because at such a site strategy gives a lot of false signals.
Here are a few solutions:
1. General trend duplication signals from another
Graphics: for example, if the general trend is considered to 12:00 chart,
added signals calculated with 18 hour schedule or daily schedule. This will reduce the
trading frequency, but it will dramatically increase its reliability.
2. apply a smoother indicator, such as here - https://www.mql5.com/ru/blogs/post/81.
3. certain there are other possible solutions.
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