Zero-Lag MA Trend Following — Strategy by PakunFX
By PakunFX
Performance Metrics
- Author: PakunFX
- Symbol: COINBASE:ETHUSD
- Timeframe: 4 hours
- Net P&L: +170,675.12 USD (+17.07%)
- Win Rate: 37.8%
- Profit Factor: 1.305
- Max Drawdown: 78,855.45 USD (6.76%)
- Total Trades: 180
- Sharpe Ratio: 0.077
Description
Script Name: Zero-Lag MA Trend Following Auto-TradingPurpose and Unique Features:This script is designed to implement a trend-following auto-trading strategy by combining the Zero-Lag Moving Average (ZLMA), Exponential Moving Average (EMA), and ATR Bands. To differentiate it from similar scripts, the following key aspects are emphasized:Zero-Lag MA (ZLMA):Responds quickly to price changes, minimizing lag compared to EMA.Detects crossovers with EMA and generates Diamond Signals to indicate trend reversals.ATR Bands:Measures market volatility to set stop-loss levels.Helps optimize entry points and manage risk effectively.Diamond Signals:A vital visual cue indicating the early stages of trend reversals.Green diamonds signal an uptrend, while red diamonds signal a downtrend.Each component plays a distinct role, working synergistically to enhance trend detection and risk management. This system doesn’t merely combine indicators but optimizes them for comprehensive trend-following and risk control.Usage Instructions:Entry Conditions:Long Entry:Enter when a green Diamond Signal appears (ZLMA crosses above EMA).Short Entry:Enter when a red Diamond Signal appears (ZLMA crosses below EMA).Exit Conditions:Stop Loss:Set at the lower boundary of the ATR band for BUY or the upper boundary for SELL at entry.Take Profit:Automatically executed based on a 1:2 risk-reward ratio.Account Size: ¥100,0000Commissions and Slippage: Assumed commission of 90 pips per trade and slippage of 1 pip.Risk per Trade: 10% of account equity (adjustable based on risk tolerance).Improvements and Original Features:While based on open-source code, this script incorporates the following critical enhancements:Diamond Signals from ZLMA and EMA Integration:Improves entry accuracy with a proprietary trend detection strategy.ATR Bands Utilization:Adds a volatility-based risk management function.Optimized Visual Entry Signals:Includes plotted triangles (▲, ▼) to clearly indicate trend-following entry points.Credits:This script builds upon indicators developed by ChartPrime, whose innovative approach and insights have enabled a more advanced trend-following strategy. We extend our gratitude for their foundational work.Additionally, it integrates technical methods based on Zero-Lag Moving Average (ZLMA), EMA, and ATR Bands, leveraging insights from the trading community.Chart Display Options:The script offers options to toggle the visual signals (Diamond Signals, trend lines, and entry points) on or off, keeping the chart clean while maximizing analytical efficiency.Disclaimer:This script is provided for educational purposes and past performance does not guarantee future results.Use it responsibly with proper risk management.