This strategy uses a setup consisting of two Bollinger Bands based on the 20 period 20-SMA +/- (a) upper/lower bands of two standard deviations apart, and (b) upper/lower bands of one standard deviation apart.
We consider price at +/- one standard deviation apart from 20-SMA as the "Neutral Zone".
If price closes above Neutral Zone after a period of consolidation, then it's an opportunity for entry. Strategy will long, anticipating for breakout.
The illustration below shows price closing above the Neutral Zone after a period of consolidation.
Position is exited when prices closes at Neutral Zone (being lower than prior bars)
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Updates: - new method for checking price consolidation (i.e. volatility of close price is low whenever coefficient of variation (cv) is below sma(cv,50)) - avoids buying on down trends by not entering if sma(close,20) is below previous bar's value
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New features: - strategy will enter into both long and short positions - trailing stop loss gets tightened when price moves sharply in favorable direction (can be toggled on/off for comparison) - added alerts