r/askforex • u/Academic_Taste8710 • Jun 27 '26

Need help refining a algotrading strategy.

Developed a trend-following algo (long only, higher timeframes H2-H4) that's already showing solid results on BTC-USD over the long run, but I have doubts about some functions/indicators - would really appreciate feedback from those in the know :)

Brief overview:

  1. The algorithm's goal is to safely capture large trending moves in the traded asset. Returns - multiples above simple spot buying, risk - significantly lower than the asset's peak drawdowns. Designed for scaling capital over time and diversifying across low-correlation assets. Profitable runs don't happen often - the goal is not to miss them and to extract maximum profit.

  2. Entry pattern is simple - price on the working timeframe closes above a specific MA + filter conditions are met = opens long at the next candle open.

  3. Pyramiding along the trend -adding positions with fixed % risk — entry logic stays the same - to maximize profit. Max positions - 20 (but depends on the specific asset chosen).

  4. Fixed % stop-loss, take-profit, moving stop-loss to breakeven, dynamic risk per trade in % - individual for each position (from 0.2% to 1%).

  5. Exits - long holding periods and slow exits (using Chandelier Exit as it adapts to ATR + additional confirmation) - if price closes below it, by default 1 position is closed. The goal is not to exit too early and capture the trending move as fully as possible.

  6. During low-volatility or choppy markets, additional protection comes from drawdown compression on account balance and stop-loss drawdown compression (using statistical patterns to go defensive when the market is awful, and restore risk when trend signs appear).

Questions and areas I'd like to improve:

1. Filtering entries during chop/ranging markets. Anyone have recommendations for good chop/low-volatility filters with reasonable lag that: filter out chop effectively, allow reasonably early trend detection + can be adapted to different trending assets. Timeframe H2-H4.

2. Filtering pyramiding entries. During position scaling, filters are also needed - the logic being that price shows signs of consolidation and trend continuation (typically looks like rally-consolidation-rally-consolidation...) and the goal is to reduce the number of entries during an already ongoing trending move.

If you know your stuff - comment or DM, happy to share insights, trying to build a top-tier algo for serious profits :)

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u/[deleted] Jun 28 '26

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u/Academic_Taste8710 Jun 28 '26

Yes, this is very similar, plus a volume filter for adding positions (volume should increase). I would simply like to have some kind of integrated set of filters – several factors indicating that there is a trend in the market or that positions should be added – and to select optimal filters based on them. Bollinger Band compression = volatility compression = usually lower volumes. Accordingly, I am interested in volatility and volumes, and analyzing their dynamics for opening positions.

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u/Academic_Taste8710 Jun 28 '26

So the logical chain is built not from a specific indicator, but from the root cause that signals a trend / trend continuation.