Trading with Higher-Timeframe Candle Direction and Optional Filters
Summary
This strategy takes long or short positions according to whether a selected higher-timeframe candle closes above or below its open. It can add a chart-timeframe EMA filter, requiring price to be above the EMA for longs and below it for shorts, and a volume filter based on volume exceeding its recent average. Signals are restricted to one per calendar day, and the script provides alerts and a dashboard showing bias and filter settings.
A lookahead setting controls how higher-timeframe values are requested. With lookahead enabled, historical signals can use information that would not have been available at the time, so results can repaint and may overstate live tradability. The document supplies implementation details and suggested settings, but no performance data, comparative tests, exits, or position-sizing method. The daily limit controls signal frequency; it does not by itself establish a loss limit or manage trade risk.
Key ideas
- The strategy enters in the direction of the selected higher-timeframe candle, using its close relative to its open.
- An optional EMA filter aligns entries with the chart-timeframe price trend.
- An optional volume filter requires current volume to exceed a multiple of its 20-bar average.
- The script allows only one signal each day and can enable or disable long and short directions separately.
- Lookahead can make historical signals repaint, so live evaluation requires caution.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.