Noro Bands Trend Following Strategy

This strategy uses custom Noro Bands indicator to determine trend direction and generates trading signals based on specific rules. Signals are generated when price breaks the bands. CryptoBottom indicator is also…

Pine ScriptTrend following Breakout RSI SMA

Author: ChaoZhang
Complexity: Intermediate · 71 lines
Parameters: 7
Backtest bar: 15m · intraday
Tested on: BTC/USDT · futures

Jump to code View in vault Original on FMZ

Overview

Strategy Logic

Calculate Noro Bands. Determine recent high, low based on user period, and calculate midline and upper/lower bands.
Determine trend direction. Price above upper band is uptrend. Price below lower band is downtrend.
Generate signals. Buy signal when price breaks below lower band in uptrend. Sell signal when price breaks above upper band in downtrend.
Integrate CryptoBottom. Add buying opportunities when CryptoBottom signal occurs.
Opening position rules. Users can choose to trade only long or short. Without selection, trade both sides.
Plot Noro Bands. Can show or hide band plotting.

Advantages

Noro Bands effectively determine trend direction.
Combining band breakout avoids false breakout signals.
CryptoBottom improves quality of buy signals.
Customizable for only long or short trades.
Adjustable parameters suit different timeframes.

Risks

Improper parameters may cause failure in band calculation.
Breakout signals have lag.
CryptoBottom is not completely reliable.
Trading only one side may miss opportunities.

Risk 1 can be addressed through parameter optimization.
Risk 2 can be improved by combining other indicators.
Risk 3 requires validating CryptoBottom performance.
Risk 4 needs assessing profitability of one side trading.

Enhancement Opportunities

Test parameter impact on Noro Bands.
Evaluate other breakout indicators instead of Noro Bands.
Assess stop loss strategies.
Test effectiveness of only long or short trades.
Optimize parameters for CryptoBottom.

Conclusion

This strategy uses Noro Bands to determine trend and breakout signals to time entries. CryptoBottom improves buying. Parameter optimization and stops can further refine the strategy.

Parameters

Name	Default	What it controls
v_input_1	true	Long
v_input_2	true	Short
v_input_3	20	Period
v_input_4	true	Use Color or bar
v_input_5	true	Use CryptoBottom
v_input_6	true	Show Bands
v_input_7	true	Show Background

Source Pine Script

/*backtest
start: 2023-09-10 00:00:00
end: 2023-09-17 00:00:00
period: 15m
basePeriod: 5m
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/


//@version=2
strategy("Noro's Bands Strategy v1.2", shorttitle = "NoroBands str 1.2", overlay=true, default_qty_type = strategy.percent_of_equity, default_qty_value=100.0, pyramiding=0)

//Settings
needlong = input(true, defval = true, title = "Long")
needshort = input(true, defval = true, title = "Short")
len = input(20, defval = 20, minval = 2, maxval = 200, title = "Period")
color = input(true, "Use Color or bar")
usecb = input(true, "Use CryptoBottom")
needbb = input(true, defval = false, title = "Show Bands")
needbg = input(true, defval = false, title = "Show Background")
src = close

//Fast RSI
fastup = rma(max(change(src), 0), 2)
fastdown = rma(-min(change(src), 0), 2)
fastrsi = fastdown == 0 ? 100 : fastup == 0 ? 0 : 100 - (100 / (1 + fastup / fastdown))

//CryptoBottom
mac = sma(close, 10)
lencb = abs(close - mac)
sma = sma(lencb, 100)
max = max(open, close)
min = min(open, close)
//dn = close > open and len > sma * 3 and max > max[1] and fastrsi > 90 ? 1 : 0

//PriceChannel
lasthigh = highest(src, len)
lastlow = lowest(src, len)
center = (lasthigh + lastlow) / 2

//dist
dist = abs(src - center)
distsma = sma(dist, len)
hd = center + distsma
ld = center - distsma

//Trend
trend = close < ld and high < hd ? -1 : close > hd and low > ld ? 1 : trend[1]

//Lines
colo = needbb == false ? na : black
plot(hd, color = colo, linewidth = 1, transp = 0, title = "High band")
plot(center, color = colo, linewidth = 1, transp = 0, title = "center")
plot(ld, color = colo, linewidth = 1, transp = 0, title = "Low band")

//Background
col = needbg == false ? na : trend == 1 ? lime : red
bgcolor(col, transp = 90)

//Signals
up = trend == 1 and ((close < open or color == false) or close < hd) ? 1 : 0
dn = trend == -1 and ((close > open or color == false) or close > ld) ? 1 : 0 
up2 = close < open and lencb > sma * 3 and min < min[1] and fastrsi < 10 ? 1 : 0 //CryptoBottom

longCondition = up == 1 or (up2 == 1 and usecb == true)
if (longCondition)
    strategy.entry("Long", strategy.long, needlong == false ? 0 : na)

shortCondition = dn == 1
if (shortCondition)
    strategy.entry("Short", strategy.short, needshort == false ? 0 : na)

Published by ChaoZhang on the FMZ strategy square · last modified 2023-09-18. Collected in the Quant Trading Vault. Unvalidated research: re-test with your own data and costs before trusting it.

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