TOTC - Trade outside the Channel (aka "Chaos Coaster") [Free]

7 במרץ 2022

To make the strategy known as the "Chaos Coaster" (published by "Perfect Entry" group) easy to use, simplify backtesting, and increase awareness, I combined three indicators into one. The result is this standalone indicator, which provides clear signals based on the original rules of the strategy.

Let's look at the rules and components of the strategy to explain how the indicator works and signals:

As a baseline we use a "Pivot (Fractal) Chaos Channel" or also known as "Fractal Chaos Band".
Essentially, the "Fractal Chaos Channel" shows an overall panorama of price action. As they filter out the insignificant price fluctuations. The upper level is created by drawing price highs and the lower level is created by drawing price lows.

As our first confirmation and to identify the direction of the trend, we use the momentum technical oscillator “TSI – True Strength Indicator”.

As a second confirmation, we use my indicator "PaP - Procul ad Pretium", which is not yet public. It helps to identify a trend at an early stage or to serve as confirmation. In short, as the name implies, the indicator tries to identify the trend based on the distance of prices to trending averages, smoothed with moving averages of your choice.
(In the original version of the strategy, "Piphunter lmi" by the_w15rdx is used. PaP provides comparable results.)

The rules for "long" or "short" signals
The basic rule is: "Trade outside the channel" when PaP and TSI point in the same direction.

Rule 1 of the Strategy:
A candle breaks and closes outside the "Pivot (Fractal) Chaos Channel". For "long" positions, the price must break the upper level. For "short" positions, the price must break the lower level.

Rule 2 of the Strategy:
The direction of the TSI must match the break direction of the "Pivot (Fractal) Chaos Channel". For long positions, TSI must be above its signal line. Vice versa for "short" positions.

Rule 3 of the Strategy:
The direction of "PaP - Procul ad Pretium" must match the break direction of the "Pivot (Fractal) Chaos Channel".

Outputs and Filters
The output is the "Pivot (Fractal) Chaos Channel" whose background corresponds to the direction of "PaP - Procul ad Pretium" and whose lines reflect the direction of "TSI - True Strength Indicator".

"long" or "short" signals are indicated by colored candlesticks and arrows. If there are several signals per level of "Pivot (Fractal) Chaos Channel", they are also numbered consecutively.

In addition, the signals can be filtered by defining the maximum number of signals per pivot (fractal) level.



How can this indicator be used?
As mentioned, this indicator provides the signals for the strategy that has become known as the "Chaos Coaster". Details and even videos of this strategy can be found online. I can also provide a list of links upon request.

Limitations of this free version
The default settings of the indicator reflect the original version of the strategy. Some parameters cannot be changed or can only be changed to a limited extent in this free version. To get full access to all parameters, send me a private message here on TradingView.

Setting up alerts and what needs to be considered
Alerts take into account the settings of the indicator at the time of creating an alert. I therefore recommend setting up the alert again after making changes to the settings. To receive alerts: "Add Alert to TOTC" and select "Any alert() function call".

What do I need to consider?
It may be advisable to add further indicators and an analysis of the market structure in order to confirm the signals issued by the indicator. Please note that when you make adjustments to any strategy, you always carry out particularly detailed tests.

You would like to use this strategy, but you have adjustment requests, you want to have additional filters or features implemented, ...?
I am happy to create individual indicators based on "TOTC - Trade outside the Channel [Free]". Write me a PM and we will discuss the details and conditions.

Will this indicator be further developed and will I receive free updates?
All my indicators are of course constantly updated and, if possible and with the aim of the indicator justifiable, supplemented by user requests. If you like this indicator and follow me here on TradingView, you will be informed about updates and also new indicators.