Time-Filtered Support and Resistance with Trailing Stops
Summary
This system seeks reversals near dynamically calculated support and resistance zones. A long signal requires price to test support and close above a buffer with above-average volume; a short uses the inverse resistance condition. Optional trend filtering can further screen entries. A configurable time window controls when signals are eligible, with timezone and weekday choices and an option to avoid a midday period.
Position management includes two profit targets, optional partial closing at the first target, and volatility-adjusted trailing stops in conservative, balanced, or aggressive modes. The document describes the features and risks but supplies no measured results or usable backtest summary. It notes that support and resistance can fail in volatile or illiquid conditions, time filters may exclude good opportunities, and trailing stops may exit prematurely in choppy markets. Many adjustable settings create overfitting risk; their effectiveness should be assessed out of sample for the target market and trading hours.
Key ideas
- Support and resistance interactions, volume confirmation, and an optional trend filter define reversal entries.
- Time filters can restrict trading by hour, timezone, weekday, and midday exclusion.
- Two profit targets allow partial closing, while trailing stops adjust to market volatility.
- The document provides no reported performance results to validate the approach.
- False level breaks, missed opportunities, premature stop-outs, and parameter overfitting are stated risks.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.