Future Lines of Demarcation for Directional Trading

Summary

This strategy uses a Future Lines of Demarcation (FLD) series, formed from a selected price source and shifted forward by a configurable period, to generate directional positions. It compares the current close with the price value plotted at that future displacement: a close below that value signals long, while a close above signals short. The source can be median, high, low, or another standard price series, and an option reverses the signals.

The document describes the logic and parameter choices, but provides no performance results despite its backtest framing. It presents the approach as trend following and suggests tuning the period, combining indicators, and adding stop and take profit rules. Its own caveats include false signals from unsuitable periods and sudden price moves. The source implementation also plots the selected series shifted forward, so the apparent future line is a visualization of past data, not a forecast; this distinction matters when evaluating the method. No risk controls or empirical evidence are established in the supplied material.

Key ideas

• The strategy compares the current close with a price series displaced by a configurable period.
• A close below the displaced value triggers a long position, while a close above it triggers a short position.
• The source price can be selected from several common price definitions, and signals can be reversed.
• The document recommends parameter tuning, indicator filters, and explicit trade exits but reports no measured results.
• A forward plotted line reflects shifted historical values and does not itself predict future prices.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.