Sublime Trading | Trend Strength Filter

3 באוג׳ 2023

What kind of traders/investors are we?

We are trend followers. Our scripts are designed to be used on the higher timeframes (weekly/daily) to catch the large moves/trends in the market.

Most have heard of long-term trend following. Few know how to execute the strategy.

Our scripts are designed specifically to identify and invest in long-term market trends.

What does this script do?

Identifying trends is at the heart of sound investing.

This script is colour coded to help identify long-term trends and environments where you will want to consider taking positions.

It is also designed to identify sideways/consolidating markets, environments where you will want to consider standing aside.

How is the trailing stoploss produced?

The script uses two sets of Bollinger Bands, one with setting Standard Deviation 1 and the other with Standard Deviation 2.

These settings help to create 3 zones - Buy, Sell and Stand Aside.

The bars will change colour according to which zone they are in.

The Buy zone is colour-coded green, and when a bull market or the start of a bull trend is in play. The green switches from light green to dark green as the asset’s price moves above the Buy zone.

This switch in colour serves as a warning that a reversal/pullback may occur next from bullish to bearish.

The Sell zone is colour-coded red and when a bear market or the start of a bear trend is in play. The red switches from light red to dark red as the asset’s price moves below the Sell zone.

This switch in colour serves as a warning that a reversal/pullback may occur next from bearish to bullish.

The Stand Aside is confirmed when the colour-code changes to grey. This may not necessarily mean a trend reversal but simply a time to apply patience before a trend continuation.

A sustained mixture of red, green and grey bars confirms a consolidation or sideways market and when investors/traders will want to stand aside and consider another asset.

What is the best timeframe to use the script?

Long-term trends are identified on the daily and weekly timeframes where traders and investors take fewer positions but hold for longer time periods.

We recommend using the script in unison on the weekly and daily timeframes.

When both timeframes fall into the Buy zone and colour-coded green, it signifies a strong bull market.

When both timeframes fall into the Sell zone and colour-coded red, it signifies a strong bear market.

When there is a mixture of green, red and grey bars across the two timeframes, it signifies a sideways market and when investors stand aside and protect their capital.

The weekly timeframe will also help mask the noise on the daily timeframe, allowing you to hold positions longer.

The Trailing Strength Filter script is for investors who want to identify and invest in long-term trends whilst simultaneously eliminating intraday swings.

What makes this script unique?

Identifying the start of long-term trends and then riding out established trends are among the main struggles budding investors face. This script has been coded specifically for the daily and weekly timeframe to:

• Seamlessly identify the start, middle and end of trends
  
• Align with the market and remove social media noise calling market tops and bottoms
  
• Allow for discretion when entering but particularly exiting of positions if a market trend has not ended
  

This trend filter script ensures alignment with long-term market trends.