VIDYA and Bollinger Band Trend Entries with Layered Profit Taking

Summary

This document outlines a trend-following system that combines fast and slow Variable Index Dynamic Average (VIDYA) lines with Bollinger Bands. VIDYA adjusts its smoothing using the absolute Chande Momentum Oscillator, while the bands serve as a volatility filter. The described entries require price to cross the slow VIDYA, the fast VIDYA to slope in the same direction, and price to break beyond the corresponding band. The source material is incomplete around the entry rules, so their precise implementation cannot be confirmed from the available text.

Position exits are described as layered, using both ATR-distance targets and percentage targets, with different handling for shorts through a multiplier. The document discusses false signals in ranging markets, slippage, parameter dependence, and the added complexity of managing multiple exits. Although a backtest configuration and strategy code are partially supplied, no performance figures or conclusions from a completed evaluation are presented; the claimed benefits therefore remain unverified.

Key ideas

• VIDYA adapts its smoothing based on the absolute value of a momentum oscillator.
• The strategy combines fast and slow VIDYA trend direction with Bollinger Band breakouts.
• The described exit scheme layers ATR-based and percentage-based profit targets.
• Short positions use a separate multiplier for percentage-based target handling.
• The supplied material lacks complete entry code and reported backtest results.

Tags

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