This strategy calculates percentage price difference between multiple EMA pairs to determine trend direction, and trades based on the Vegas wave.
Specifically, it computes percentage price differences between current price, 144-period EMA, 169-period EMA and 233-period EMA. Long signals are generated when all three meet the preset positive difference threshold. Shorts are triggered when price falls below all three EMAs and 144-period EMA crosses below 233-period EMA.
The EMA combo filters more false breaks compared to single EMA. Also, the Vegas wave itself contains multiple EMAs for robust trend analysis.
However, EMAs have inherent lag and cannot identify optimal entries. And there is subjectivity in wave theory, with performance relying largely on parameter optimization. Prudent assessment of live results is required.
Overall, the Vegas trend wave strategy synergizes EMA analysis and wave theory for good results in trending markets. But risk management remains crucial for long-term application.
/*backtest
start: 2023-09-03 00:00:00
end: 2023-09-10 00:00:00
period: 1m
basePeriod: 1m
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/
//@version=3
strategy("Vegas Wave Strategy", overlay=true)
ema144 = ema(close, 144)
ema169 = ema(close, 169)
ema233 = ema(close, 233)
current = close
upd144 = input(title="EMA144 percent difference from EMA233", type=float, defval=0.1)
upd169 = input(title="EMA169 percent difference from EMA233", type=float, defval=0.1)
upd_current = input(title="Current price percent difference from EMA233", type=float, defval=0.1)
//pDiff - Percentage Difference
pDiff(x, y) =>
((x-y)/x)*100
gtDiff(x, y) =>
x > y
pd144 = pDiff(ema144, ema233)
pd169 = pDiff(ema169, ema233)
pd_current = pDiff(current,ema233)
plot(ema144,color=orange, linewidth=2, transp=0, title="144 EMA")
plot(ema169,color=blue,linewidth=2, transp=0, title="169 EMA")
plot(ema233,color=red,linewidth=2, transp=0, title="233 EMA")
//plot(current, color=white, title="Current Candle")
if (gtDiff(pd_current, upd_current) and gtDiff(pd144, upd144) and gtDiff(pd169, upd169))
strategy.entry("buy", strategy.long, when=strategy.position_size <=0)
// if (ema8 > ema55 and ema13 > ema55 and ema21 > ema55 and current > ema55 and pd_current > upd_current)
// strategy.entry("buy", strategy.long, 10000, when=strategy.position_size <=0)
if (current < ema144 and current < ema169 and current < ema233 and ema144 <= ema233)
strategy.entry("sell", strategy.short, when=strategy.position_size > 0)