The Moving Average ยป 3 SMMA + Williams Fractals + RSI strategy
Overview
This is the scripted implementation of The Moving Average YouTube channel's "Best Scalping Strategy Period" trading strategy:
https://www.youtube.com/watch?v=MK47z07tGNM
The script can be used to backtest the strategy, and also to set alerts for automated trading purposes.
Indicators used in this strategy:
- SMMA (Smoothed Moving Average) x 3
- Williams Fractals
- RSI (Relative Strength Index)
Settings
The default settings for each indicator is as per the instructions in the video.
SMMA Settings
Willams Fractals Settings
RSI Settings
Long
Entry Criteria
- SMMAs are aligned (Slow < Medium < Fast)
- Candle closed above all three SMMAs
- Williams Fractals printing a down (green) fractal
- RSI to be at or below the lower band (50)
In the video you are told to open a long position on the candle on which the Williams Fractals green triangle is printed, however that is not possible on realtime candles, due to the lagging nature of the WF indicator. The WF indicator prints the triangles on a historic bars. How many bars in the past the triangle is printed depends on what you have the Periods set to under Williams Fractals Settings.
Stop Loss
In the video you are advised to place the stop loss to the bottom of the lower wick of the candle on which the green Willams Fractals triangle was printed:
As stated above, the strategy won't be able to enter into the long position on the candle on which the green triangle is printed, only a few candles later.
The way this wick based stop loss strategy is achieved in the strategy is by using the Wick Based stop loss strategy with the Stop Loss Wick Candle Offset set to 2:
The reason the offset has to be set to 2 is because if we didn't use an offset, the low of the entry signal candle would be used as opposed to the historic candle on which the green triangle was printed.
Take Profit
In the video you are advised to use a 10 pip take profit, however it doesn't seem to be a hard and fast rule.
By default we've set the strategy's take profit strategy to Risk Multiplier with a multiplier of 2, essentially making your trades to have a 1:2 Risk/Reward ratio, but you are free to change this to whatever you want.
Short
Entry Criteria
- SMMAs are aligned (Fast < Medium < Slow)
- Candle closed below all three SMMAs
- Williams Fractals printing an up (red) fractal
- RSI to be at or above the upper band (50)
In the video you are told to open a short position on the candle on which the Williams Fractals red triangle is printed, however that is not possible on realtime candles, due to the lagging nature of the WF indicator. The WF indicator prints the triangles on a historic bars. How many bars in the past the triangle is printed depends on what you have the Periods set to under Williams Fractals Settings.
Stop Loss
In the video you are advised to place the stop loss to the top of the upper wick of the candle on which the red Willams Fractals triangle was printed.
As stated above, the strategy won't be able to enter into the short position on the candle on which the red triangle is printed, only a few candles later.
For more info please see the Long Stop Loss section above.
Take Profit
The Take Profit strategy used for short trades is the same as used for long trades (Risk Multiplier of 2). For more info, please see the Long Take Profit section above.