Trading Strategy Following Dual Timeframe Trends

Trading Strategy Following Dual Timeframe Trends This trading strategy identifies trend direction across multiple timeframes to get into trends early. It uses both MACD and Stochastic RSI (SRSI) as indicators, and…

Pine ScriptTrend following Multi-timeframe Tools & templates RSI MACD EMA SMA Stochastic

Author: ChaoZhang
Complexity: Intermediate · 47 lines
Parameters: 9
Backtest bar: 1h · intraday
Tested on: BTC/USDT · futures

Jump to code View in vault Original on FMZ

This trading strategy identifies trend direction across multiple timeframes to get into trends early. It uses both MACD and Stochastic RSI (SRSI) as indicators, and enters trades when consistent signals are triggered on the daily and 4-hour timeframes.

Strategy Logic:

Calculate MACD and SRSI on the daily chart. When MACD crosses above signal and SRSI %K crosses above signal, it is considered a bullish signal.
Calculate MACD and SRSI on the 4-hour chart. When MACD crosses above signal and SRSI %K crosses above signal, it is considered a bullish signal.
Only go long when both daily and 4-hour bullish signals appear together.
If both daily and 4-hour bullish signals disappear, close long positions.
If both daily and 4-hour bearish signals (MACD and SRSI crossing below) appear together, go short.
If both daily and 4-hour bearish signals disappear, close short positions.
Continuously monitor dual signals to follow trends.

The advantage of this strategy is getting into trends early as they develop by using dual filters to improve signal reliability and avoid false signals during choppy periods. The use of two timeframes provides greater confidence in the trend direction.

However, a potential risk is that strong trends can build on one timeframe before confirming on the second, thus missing initial entries. Parameters like MACD lengths need to be optimized to capture trends early while minimizing false signals. Overly sensitive parameters may cause over-trading.

Overall, the Dual Timeframe Trends Following strategy aims to capture trend moves in early stages. The dual confirmation helps avoid whipsaws but may occasionally miss initial entries. Careful parameter tuning and risk management is required.

Parameters

Name	Default	What it controls
v_input_1_close	0	MACD Source:: close \| high \| low \| open \| hl2 \| hlc3 \| hlcc4 \| ohlc4
v_input_2	12	MACD Fast Length:
v_input_3	26	MACD Slow Length:
v_input_4	9	MACD Signal Smoothing:
v_input_5_close	0	SRSI Source:: close \| high \| low \| open \| hl2 \| hlc3 \| hlcc4 \| ohlc4
v_input_6	14	SRSI RSI Length:
v_input_7	14	SRSI Stoch Length:
v_input_8	14	SRSI Smoothing:
v_input_9	14	SRSI Signal Smoothing:

Source Pine Script

/*backtest
start: 2023-08-12 00:00:00
end: 2023-09-11 00:00:00
period: 1h
basePeriod: 15m
exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}]
*/

//@version=2
// strategy(title='[RS]Khizon (DWTI) Strategy V0', shorttitle='K', overlay=false, pyramiding=0, initial_capital=100000, currency=currency.USD)
trade_size = 10000
//  ||  Inputs:
macd_src = input(title='MACD Source:',  defval=close)
macd_fast = input(title='MACD Fast Length:',  defval=12)
macd_slow = input(title='MACD Slow Length:',  defval=26)
macd_signal_smooth = input(title='MACD Signal Smoothing:',  defval=9)
srsi_src = input(title='SRSI Source:',  defval=close)
srsi_rsi_length = input(title='SRSI RSI Length:',  defval=14)
srsi_stoch_length = input(title='SRSI Stoch Length:',  defval=14)
srsi_smooth = input(title='SRSI Smoothing:',  defval=14)
srsi_signal_smooth = input(title='SRSI Signal Smoothing:',  defval=14)
//  ||  MACD(close, 12, 26, 9):     ||---------------------------------------------||
f_macd_trigger(_src, _fast, _slow, _signal_smooth)=>
    _macd = ema(_src, _fast) - ema(_src, _slow)
    _signal = sma(_macd, _signal_smooth)
    _return_trigger = _macd >= _signal ? true : false
//  ||  Stoch RSI(close, 14, 14, 3, 3)  ||-----------------------------------------||
f_srsi_trigger(_src, _rsi_length, _stoch_length, _smooth, _signal_smooth)=>
    _rsi = rsi(_src, _rsi_length)
    _stoch = sma(stoch(_rsi, _rsi, _rsi, _stoch_length), _smooth)
    _signal = sma(_stoch, _signal_smooth)
    _return_trigger = _stoch >= _signal ? true : false
//  ||-----------------------------------------------------------------------------||
//  ||-----------------------------------------------------------------------------||
//  ||  Check Directional Bias from daily timeframe:
daily_trigger = security('USOIL', 'D', f_macd_trigger(macd_src, macd_fast, macd_slow, macd_signal_smooth) and f_srsi_trigger(srsi_src, srsi_rsi_length, srsi_stoch_length, srsi_smooth, srsi_signal_smooth))
h4_trigger = security('USOIL', '240', f_macd_trigger(macd_src, macd_fast, macd_slow, macd_signal_smooth) and f_srsi_trigger(srsi_src, srsi_rsi_length, srsi_stoch_length, srsi_smooth, srsi_signal_smooth))

plot(0, style=circles, color=daily_trigger?blue:na, linewidth=4, transp=65)
plot(0, style=circles, color=h4_trigger?navy:na, linewidth=2, transp=0)

sel_open = daily_trigger and h4_trigger
buy_open = not daily_trigger and not h4_trigger

strategy.entry('sel', long=false,  comment='sel', when=sel_open)
strategy.entry('buy', long=true,  comment='buy', when=buy_open)

Published by ChaoZhang on the FMZ strategy square · last modified 2023-09-12. Collected in the Quant Trading Vault. Unvalidated research: re-test with your own data and costs before trusting it.

Build this with AgenKit

A spec is not a trading system. Paste this into your coding agent and AgenKit runs a specialist team — architecture, test-first build, risk gates, review — with paper trading on by default.

in Claude Code, Cursor, Codex & 4 more

/agenkit build a production-grade trading bot with a backtest engine, risk controls and paper trading by default from strategies/Trading-Strategy-Following-Dual-Timeframe-Trends.md

npx agenkit install engineering-kit in your project
Paste the command into your agent and approve each phase
Get tests, backtest, risk controls and a paper-trading switch

Get AgenKit How /agenkit works

Understand it first

Before you run this, read the lesson behind the idea and how to backtest it honestly. Specs like this one are the survivors of an unknown number of trials; deflate their results accordingly.

Parameters

Source Pine Script

Build this with AgenKit

Understand it first

Related specs