[blackcat] L5 Dragon-Void-Dragon for Spot Trading

16 Ağu 2023

Level: 5

Background

First of all, this L5 technical indicator is only suitable for spot trading. Because its algorithm is only designed for one-way long, and there is no algorithm for short-selling mechanism.

This technical indicator is the main chart indicator of the integrated trend line, channel technology and moving average technology. Trendlines are straight lines connecting at least two significant highs or lows on a price chart, indicating the direction and strength of a trend. Channels are parallel lines that contain price action within a trend, showing the range and potential reversal points.


Function

Trend lines, channel indicators, and moving averages are all very good subjective technical indicators. However, I have found that if one of the three is used mechanically, or a combination of the three often does not achieve good trading results.Therefore, through continuous practice and summary, I implemented some subjective ideas through algorithms, which improved the winning rate after the integration of the three. Buy and sell points are also more accurate.This involves automatic drawing of trend lines and channel indicators. It is conceivable that if you want to draw relatively stable trend lines and channel indicators, you have to wait until the price trend is relatively stable to obtain stable trend lines and channel lines. The advantage of this is that the subsequent price may rely on this inertia to move up and down the trend line or in the channel, which can be the basis for trend reversal. On the other hand, the formation of trendlines and channel indicators requires price movements and time as prerequisites. This means that the process of waiting for the formation of the trend must also sacrifice part of the profit. This is a trade-off between corresponding characteristics and stable characteristics. What we need to do is to find a perfect balance between the two, and expand profits while keeping risks within a controllable range. Ultimately realize big wins and small losses, long-term compound interest accumulation.

The technical elements reflected in this indicator are: channel line, color of trend strength, double moving average. And through the calculation of the background algorithm, some labels for buying and selling are obtained as alarm signals.


Key Signal

Overall this indicator is quite intuitive and does not require a lot of intellect to understand how to use it. It can be summarized as:

1. If the channel is in a warm color and the direction points to the upper right corner, then go long; if the channel is in a cool color and the direction points to the lower right corner, then go short or close the position.
2. The color of the channel is changed from cool to warm. The extreme value of the cool color is dark blue, which means that it is extremely oversold; the extreme value of the warm color is purple, which means that it is extremely overbought; therefore, when you see channels in different directions, you should also pay attention to their colors, which means that the current channel is in the market Where, and if you need to be careful about price reversals.
3. Because this technical indicator is specially developed for spot trading. Therefore, if you want to enter the market, it is generally better to have the color of the channel and the candle be yellow and orange. Otherwise, it is just a rebound, and the price will repeat more later, and it is more necessary to continue to fall.
4. The double moving average system is also specially customized, mainly combined with Zen Theory's Kiss Saying. This double moving average system is a pressure and support system other than the channel. When an uptrend is relayed and continues to rise after a retracement, the Kiss, Wet-Kiss, and Fly-Kiss triggered by the double moving average will generate yellow and orange buy signal labels.
5. This system needs to wait for the price trend to stabilize before generating a buying and selling point, so there are not many buying and selling signals, and of course some entry opportunities will be missed. Of course, this is the result of sacrificing timeliness for transaction stability. So, be flexible. If your trading style is more aggressive, you can only use the buy and sell labels as auxiliary signals.


Remarks

1. It need time to stablize trendlines and channels, so "B"/"S" labels may not be so in time.
2. Closed-source, Invite-only, NOT free.
3. Highl recommended to use this indicator for >= 30min timeframe, which means this is powerful for swing trading.
4. If you are trading crypto, highly recommend use "[blackcat] L3 RS MSFIELD Crypto" indicator as a screener to find target is stronger than Bitcoin.

5. If you are trading CN A Share, highly recommend use "[blackcat] L3 RS MSFIELD CN A Share" indicator as a screener to find target is stronger than SSE Index.

Subscription

L4/L5 are not free indicators. Trail permissions can be given. Monthly and annual subscriptions are acceptable.