Dynamic Trend Hunter [Quantigenics]

Dec 8, 2023

The "Dynamic Trend Hunter” script focuses on trend identification, dynamic entry and exit signals, and effective risk management. While a standalone trading script designed for versatile application across all markets, it can also be complemented by other indicators for enhanced analysis.

Core Features:

Dynamic Trend Indicator: Central to the script, this indicator discerns market trend direction using a color-coded system. Blue indicates an uptrend, red a downtrend, and a flat line signifies a sideways market.



Buy and Sell Signals: Provides clear, on-chart buy and sell signals to assist in identifying optimal entry points in alignment with the trend.



Profit Target Exits: A key feature designed to help traders lock in profits at strategic points. This feature uses a sophisticated mechanism (outlined in more detail below) to identify potential exit points, signaling the trader to close a position and secure gains before a potential market reversal.



Dynamic Stop Loss Levels: Essential for risk management, these levels adjust automatically, providing a mechanism for trailing stop losses and safeguarding against adverse market movements.



Technical Composition:

1. Dynamic Trend Indicator:Calculation Method: Utilizes a blend of the highest and lowest prices over a specified length, averaged to create a trend line. This line is helpful in identifying the overall market trend.
   Color Coding: The trend line changes color based on its relation to price action. A blue line indicates an uptrend when prices are consistently above this average line, while a red line signifies a downtrend when prices stay below it.
   
   
2. Signal-Based Trading:Trend Entry Signals: Generated when there's a shift in the color of the trend line, indicating a potential change in market direction.
   Pullback Entries: Identified when the closing price crosses the previous high (for long entries) or low (for short entries), while also considering the current trend line position.
   
   
3. Dynamic Stop Loss Levels:Calculation: Stop loss levels are dynamically determined using the highest and lowest closing prices over the 'Length' period. These levels adjust with market movements, providing a trailing stop loss mechanism.
   Visualization: Depicted as colored dots on the chart, changing in response to the market's movement relative to the trend line.
   
   
4. Oscillator for Dynamic Exits:Mechanism: The script employs an oscillator to identify potential exit points, signaled by yellow dots. This oscillator is based on the relative extremity of the current price action compared to recent price movements.
   Alerts: Dynamic exits trigger alerts when the oscillator reaches specified threshold levels, signaling potential market reversals or exhaustion points.
   
   
5. Customization and Flexibility:Length Adjustment: The primary 'Length' input parameter allows traders to modify the sensitivity of the trend line and stop levels, catering to different trading styles and market conditions.
   Alert Customization: Traders can set alerts for trend line changes and dynamic exits, ensuring timely responses to market movements.
   

Input Parameter Settings:

• Intra-Bar Order Generation (IntraBar): Enables real-time signal generation within the current bar or after its closure.
  
• Dynamic Exits (DynamicExits): Toggles the visibility of dynamic exit signals for profit-taking.
  
• Dynamic Trend Length: Defines the lookback period for calculating the trend line. This length, which is adjustable and set by default to 21, specifies the number of bars over which the highest and lowest prices are analyzed to determine the trend line.
  
• Dynamic Stop Loss Levels Length: This parameter defines the lookback period for calculating stop loss levels. It sets the number of bars used to determine the highest and lowest values for stop loss positioning. Adjusting this length allows traders to customize the sensitivity and placement of stop loss levels in accordance with their trading strategy and risk tolerance. This feature is crucial for tailoring stop loss settings to different market conditions and volatility levels, ensuring more effective risk management. Note: that initial stop loss levels, and tighter stop losses, can be set behind the Dynamic Trend Line itself.
  
• Show Trend/Pullback Entries: Controls the display of specific entry signals based on trend continuation or market pullbacks.
  
• Alert Settings: Options for setting alerts on trend line changes and dynamic exits, enhancing trade management.
  
• Customizable Colors: Allows personalization of stop level and trend line colors for better chart visualization.
  

How to Trade with the Dynamic Trend Hunter:

1. Trend Following: Enter trades in the direction of the trend indicated by the color-coded trend line.
   
2. Pullback Entries: Look for pullback entry signals during established trends for additional entry points.
   
3. Dynamic Exits: Use yellow dot signals and dynamic stop loss levels for determining exit points or to adjust stop losses.
   
4. Risk Management: Employ the dynamic stop loss levels to manage risk effectively and protect against significant losses.
   

Alerts and Notifications:

Traders can set up alerts for trend line changes and dynamic exits, ensuring they are promptly informed about critical market movements and can react accordingly.

Conclusion:

The "Dynamic Trend Hunter [Quantigenics]" is a comprehensive and adaptable trading tool, suitable for various market conditions and trading styles. Its ability to provide clear trend indications, along with dynamic entry and exit signals, makes it an invaluable asset for traders aiming to enhance their market analysis and decision-making process. While it is a standalone system, it can be used in conjunction with other indicators to further refine trading strategies.

While we believe this tool may enhances your trading strategy, we encourage thorough familiarization before live trading. Remember, trading involves risk, and past performance is not indicative of future results.

You can see the “Author’s instructions" below to get immediate access to Dynamic Trend Hunter & the rest of the “Quantigenics Premium Indicator Suite”.

May 2

Release Notes

Dynamic Trend Hunter UPDATE

With this update, we've continued to enhance our Dynamic Trend Hunter script. We've introduced the Trade Signal Calibrator, described below. Additionally, we've made improvements to the signals and the input settings. Please be sure to read through the entirety of the update to see all the improvements.

UPDATE: Added New Feature - Trade Signal Calibrator

Introduction of the Trade Signal Calibrator across all systems, allowing for refined input parameter adjustments tailored to various market conditions. This feature enhances the effectiveness of trade signals by providing a real-time visualization of potential performance improvements.

Input Parameters for Trade Signal Calibrator:

1. Show Trade Stats: This toggle ON/OFF the stats-display at the top-right of the chart.
   
   
2. Calibrator Bar Count: This is the number of bars taken into consideration when calculating stats. The default is 500 bars, but this can be changed if you wish to lengthen or shorten the amount if historical market data taken into consideration when displaying historical hypothetical trades on the chart and calculating the trade stats.
   
   
3. Test All Signals: When toggled ON this setting generates stats for every signal on the chart. When toggled OFF it only considers being in one trade at a time. In other words, if it’s in a hypothetical trade and a subsequent signal occurs it will not consider that subsequent trade. It will only “enter” a new trade once the previous one is closed, based on the exit criteria as defined by the input parameters.
   
   
4. Display Trades: Toggles ON/OFF the hypothetical backtest trades that are plotted on the chart. This feature can be an extremely useful aid in calibrating the input parameters. You may wish to turn it off to reduce chart Clutter once you've fine-tuned the settings to your liking.
   
   
5. Display Exit Labels: Turns ON/OFF the names of the exits on the hypothetical backtest trades when plotted on the chart.
   
   
6. Allow Open Positions to Reverse: Keeping this setting off will make it such that a trade has to fully exit before a new one and the opposite direction can be taken, when calculating stats. If set to on it will calculate the hypothetical trades in a way that allows the position to reverse in the opposite direction when a new signal appears.
   
   
7. Exit Bars From Entry: This setting specifies the number of bars after entering a trade at which the position will automatically close, regardless of profit or loss or any other conditions. For example, if it’s set to 10, the trade will close after 10 bars. You can enable or disable this feature by checking or unchecking the corresponding box.
   
   
8. Quantity Per Trade: This adjusts the trade size of contracts, lots, shares, in relationship to the market being traded, as dictated by the chart.
   
   
9. Profit Target (Per Trade): If toggled ON this sets the amount of profit in a trade (entire quantity taken into consideration, not just per contract or share) that must be achieved for the trade to exit and take profit.
   
   
10. Stop Loss (Per Trade): If toggled ON this sets the amount of loss in a trade (entire quantity taken into consideration, not just per contract or share) that must occur for the trade to exit and stop out at a loss. This setting calculates independently of the “Use Stop Loss Levels” setting.
    
    
11. How Quantity affects Profit Target/Stop Loss values:
    The Profit Target/Stop Loss values are calculated on a per trade, not per share/contract basis.
    For example, if generating stats for the Emini S&P 500 (ES) on a chart using mini lots the value is $50 per point, per 1 contract. If the Quantity is set to 1 and the Profit Target or Stop Loss is set to $500 this would mean that the market needed to move 10 points for a target or stop. If the Quantity is set to 2 this would mean the market only had to move 5 points to achieve the same $500 target or stop as the entire position size is taken into account for the Profit Target and Stop Loss calculation.

UPDATE: Added Features and Improved Input Parameters for Script: