17) Using Trend Filters to Filter Out Low-Probability Trading Signals

Darwinex
Darwinex
17,838
10
Published 2021-02-11
Trend Filters can be used to improve trading strategies by only considering trading signals where the probabilities are more in your favor, and therefore help improve the reward to risk ratio. By filtering out those trades when the probabilities are against you, in my experience, has shown a positive effect on the quality of equity curves, but of course, you need to perform your own due diligence to prove this for your own systems. This video covers the 3 main types of trend filter oscillator.

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0:00 Introduction
1:38 Oscillator Indicator Use Cases
1:41 Why use a Trend Filter?
2:46 Trend Filter Types • There are 3 main types of oscillator-based trend filters
3:18 Idealised Oscillator - Sine wave
3:36 Trend Filter TYPE I (Single Line Non-Directional)
5:09 Trend Filter TYPE II (Single Line Directional)
7:16 Trend Filter TYPE III (Dual Line)
9:15 Matching Triggers to Trend Filters
9:54 Next Time...

Content Disclaimer: The contents of this video (and all other videos by the presenter) are for educational purposes only, and are not to be construed as financial and/or investment advice.
All Comments (16)
  • @jorgezozaya5049
    I find this series of videos quite inspiring as they bring food for thought for several hours.
  • @leonjbr
    Very clear and interesting. Waiting for the next video.
  • @biberhund
    Can't wait for the next episode :-) THANK YOU FOR SHARING!
  • @northyorkwatches9330
    Priceless information. Thank you so much Martyn. Can't wait for the next episode.
  • @carnage3694
    These videos are gold for automated trading
  • @avishaitsabari1994
    Great series! Thanks a lot! Once i finish building my money machine you'll get some percentages 😉
  • @positivenyt8533
    you can also use the momentum indicator or the ATR indicator put a MA on it and use it like the ADX
  • @Al424
    Thanks for the great content Martyn. If you use both a trend and a volatilty indicator are you at greater risk of over optimising rather than using one or the other (statistical sign would reduce too?)? Conscious of having too many parameters to optimise. How is this avoided? Also at what point do you factor in a money management system into WFA backtesting (SLTP) as this would add even more parameters or can it be dealt with separately post optimisation of other params? Thanks
  • @marcusl8688
    Do you think its logical to also optimize the timeframe for the trend filter? :D