MTF Trendcatcher

Thank you very much for all their hard work to those who created the indicators I am using here, which I found at this thread.

This is an idea for a mechanical system that tries to catch long-term trends with a relatively small stop at entry. I will then then add positions as the trend develops, with all positions being closed once the trend ends (if not having been stopped out before). I'm using a MTF approach and attempting riding the longer-term trend with entries made on a shorter timeframe. In other words to ride the H4 trend with M15 entries. I would like to say that, while it seems logical and plausible to me that this approach could be generally interesting over time, I'm not presenting a tried and tested system but an experimental one that I would like to forward-test here and to encourage feedback, participation and brainstorming. The precise entries and exits can no doubt be tweaked - what I'm interestedd in is to see if the basic method works over time. No doubt it will do better in strongly trending markets.

My rules of entry:
For long-
1. H1 trend and H4 trend (as indicated by ASCTrend-Matrix 2TF) must be bullish/white
2. the M15 trend must be shown as bullish by all four of TVI, CCI, T3 and GHL (as indicated by GenesisMatrix 2.22), after at least one of them has just been bearish/red for one or more bars.
(Basically you're looking for all 6 being white again after at least one of the top 4 were red for one or more bars.)
For short- H1 trend and H4 trend (as indicated by ASCTrend-Matrix 2TF) must be bearish/red and the M15 trend must be shown as bullish by all four of TVI, CCI, T3 and GHL (as indicated by GenesisMatrix 2.22), after at least one of them has just been bearish/red for one or more bars.
(Basically you're looking for all 6 being red again after at least one of the top 4 were white for one or more bars.)
One exception - When the H4 trend changes from red to white or white to red on ASCTrend-Matrix 2TF, I will make one entry at the start of each new trend (on the first bar where all 6 indicator blocks are unanimously white or red), with a stop beyond the recent swing low/swing high

My rules of exit of exit:
I'm using chart stops (i.e. just beyond the highest high or lowest low of the recent pullback in price) and if I don't get stopped out will hold these entries made on the M15 until the H4 trend changes (as indicated by ASCTrend 2TF going from red to white or white to red). Hopefully this will lead to some very high RR trades, though I realise a lot of otherwise good entries will get stopped out by the large swings in price that may be expected by holding on to trades so long.

Money management:
Risk 1% per trade

Here's a screenshot of a nice, long trend to show approximate entries. Exit would be after the bottom red line (H4 from ASCTrend-2TF) turns bullish/white.



P.S. Important: To use the same Multi-Time frame combination as I am ( M15 for Main Chart; M15 for GenesisMatrix 2.22 and H1+H4 for ASCTrend-2TF ) you will have to adjust the TimeFrame1.Period and TimeFrame2.Period settings in the ASCTrend-2TF indicator to 60 and 240 respectively) and set TimeFrame Auto to false.

Thank you for your contribution. Can you list appropriate settings for using the strategy on daily bars?

Good luck! GMTS is solid tool, and I like it too.
By the way, remember MTF indicators can be tricky. In your example, 1H and 4H ACSTrend can change until each 1H and 4H candle closes. That means, in 15M chart, they are kinda 'repainting'. It makes backtesting difficult. In hindsight, it looks just perfect but in real time, it works quite differently.
Thanks,

After doing some research on this thread I think I have found an answer to the question.

Firstly, to impllement this strategy using daily bars, you would need to use W1 and M1 (Weekly and Monthly) as your upper timeframes when determining trend. I can figure out how to custom set ASCTrend 2TF to show the weekly data (by inputting 10080 into the timeframe settings) but I cannot figure out how to get it to show monthly data when your chart timeframe is Daily as there are not a fixed number of minutes in each month.

I believe the better solution is to use the ASCTrend 3TF indicator in your case, applied to the Daily charts. It will show data for the Daily, Weekly and Monthly trend without having to input custom settings. You would then use then same rules I described for the M15-H1-H4 combination in the same way for the D1-W1-M1 combination.

Good luck. I hope this solves the issue and let me know how it goes or if there are further problems.

Thank you.

Yes, I had thought of that while lying in bed last night too. The way I see it you have to deal with the repainting on higher timeframe bars in one of two ways. You can either take the signal to enter/exit on the close of an M15 bar or you can wait for the close of the corresponding H1 or H4 bar for the indicator signal to be confirmed.

I think it's important to be consistent in which one of these you choose and stick to it if you want to trade the strategy in a mechanical fashion. I will choose the first option, to take the signal as soon as it occurs, which I think is the more aggressive rather than conservative approach, as it will generate entry and exit signals sooner but then more of those signals will turn out to be false.

I have added indicators to the first post, which apparently need to be present on your MT4 platform for the template to work. Sorry I did not know that. Please let me know whether you are able to set up the charts correctly now, if you wish to.