Trend Pulse Channel Strategy by ADXAE
By ADXAE
Performance Metrics
- Author: ADXAE
- Symbol: NASDAQ:AAPL
- Timeframe: 1 day
- Net P&L: +1,276.28 USD (+12.52%)
- Win Rate: 29.1%
- Profit Factor: 2.352
- Max Drawdown: 187.35 USD (1.73%)
- Total Trades: 55
Description
OverviewTrend Pulse Channel Strategy is a long-only trend-following breakout strategy built around an adaptive multi-pole smoothing filter and a volatility-adjusted price channel.The strategy is designed to participate in sustained directional moves by entering only when price confirms momentum strength beyond a dynamic upper boundary, while avoiding mean-reversion and low-quality consolidation phases.This script is published as a strategy and includes realistic backtesting assumptions for position sizing, commissions, and slippage.Core ConceptAt the heart of the strategy is a multi-pole adaptive EMA-based filter, inspired by advanced digital signal smoothing techniques.Using multiple poles allows the filter to reduce noise while preserving responsiveness to genuine trend changes.To adapt the channel width to changing market conditions, the strategy applies the same filtering logic to True Range, producing a volatility-aware envelope rather than a static or fixed-percentage band.This combination allows the strategy to:Track directional bias using a smoothed central filterAdjust channel width dynamically based on market volatilityTrigger entries only when price expansion confirms trend strengthEntry LogicA long position is opened when:Price crosses above the upper channel bandThe signal occurs within the user-defined date rangeThis condition represents a volatility-confirmed breakout aligned with the prevailing directional filter.Exit LogicThe long position is closed when:Price crosses back below the upper bandThis exit logic aims to stay in trending moves while exiting when upside momentum weakens.The strategy does not open short positions by design.Inputs and DefaultsThe default inputs are selected to balance smoothness, responsiveness, and stability:Source (HLC3): Reduces single-price noise by averaging high, low, and closePeriod (144): Defines the primary smoothing horizon of the adaptive filterPoles (4): Controls the smoothness vs. responsiveness trade-offRange Multiplier (1.414): Scales the volatility envelope using filtered True RangeReduced Lag (optional): Applies lag compensation to improve responsivenessFast Response (optional): Blends multi-pole and single-pole filters for quicker reaction at the cost of smoothnessAll inputs are fully configurable and can be adjusted to suit different instruments and timeframes.Risk Management & Position SizingThe strategy uses:Position size: 10% of equity per tradeNo pyramidingLong positions onlyThis sizing approach is intended to reflect sustainable risk exposure rather than aggressive capital deployment. Users may further adjust position size based on their own risk tolerance.Backtesting AssumptionsThe strategy is tested using:Initial capital: 10,000Commission: 0.1%Slippage: 1 tickOrder fill model: Standard OHLCThese settings are chosen to provide more realistic performance estimates compared to idealized backtests.This strategy is best suited for:Trend-oriented marketsHigher timeframes where breakouts are more reliableUsers seeking systematic trend participation rather than frequent scalpingIn sideways or range-bound market conditions, price may cross the channel boundaries frequently.This can result in a higher number of entry and exit signals that do not develop into sustained trends.For this reason, the strategy should be used with an understanding of basic technical analysis concepts, including market structure, trend identification, and consolidation behavior.It is intended as a decision-support tool, not a standalone trading system.Users—whether beginners or experienced traders—should avoid relying solely on this strategy and are encouraged to combine it with broader market context and additional analysis methods.DisclaimerThis script is provided for educational and analytical purposes only. It does not constitute financial advice. Past performance does not guarantee future results.