How to create trading strategy and use the Omega ToolkitThe Omega Toolkit has been designed and created in order to make traders better understand and respect their trading style.
I have created this toolkit as a former technical financial analyst (certified by S.I.A.T.) to give access to anyone at a low cost to highly effective trading tools that can be used to create a lot of trading strategies that suit any style of trading.
Each strategy that you know or ever will apply to the markets is a combination of different variables, commonly known under the name “checklist”. Unfortunately, many traders use in their trading strategy a lot of different tools that answer the same question or analyze the same data, that’s why I have created the Omega Toolkit, to classify and organize the best tools for every checklist point.
These variables can be categorized into 4 main points:
1. The first one is the Trend parameter, this point answers the question “buy or sell”, long story short it provides the direction of the trade you’re looking to. Usually, for this point, many traders like to use the 200 period moving average, others like to use the market structure, and others use more advanced tools like the volume profile, but at the end of the day, they all answer the same question and use multiple tools that answer to the same question can lead to an analysis that overvalues some price data and undervalues some others. Many traders like to use also fundamental analysis to determine the trend parameter, with macroeconomics data or another type of analysis just like the seasonality.
2. The second one is the Location point, this variable aims to make the trader buy low and sell high, and the main purpose is to provide the risk-to-reward asymmetry. One general rule to follow regarding this aspect is to decide with attention to your entry and exit points. To decide that, keep in mind that you want the price to have the most amount of resistance (or support) between your entry point and your stop loss, while you want the price to have a “clear path” from your entry price level until your previously decided to take profit. To answer this point, many traders like to use the standard Fibonacci retracement or the Smart money concepts technique, but in reality, any tool or analysis can be used as long as it provides a clear price level that can be used to determine whenever the price is in a discount zone, in a premium zone or in his fair price value.
3. The third one is the Signal point, which is used to determine the exact moment to enter the trade you already have programmed. This point is very important because it gives us confirmation of the fact that the short-term trend is aligned with the long-term trend. An essential tip about this is that no strategy is effective on the market if the strategy starts from the signal or is based on that.
4. The fourth and last point is the Filter, which aims to increase the win rate of the strategy by giving an additional confirmation to the trade you have found thanks to the Trend and the Location parameters. An important information about this variable is that in order to be effective it should analyze a different kind of data compared to the other three parameters. For example, if you have chosen to utilize all only-price variables as analysis for the Trend, Location, and Signal points, you should use something different just like an indicator that analyzes volume, momentum, volatility, or strength in his data.
In order to have a good strategy your checklist should have at least one point for every categorization. Having more than one can lead to an increase in performance and also a huge decrease in the overall trade number.
Here, with the Omega Tools, I provide 3 tools that can be used to create some effective trading strategies using both statistics and logic. The Omega Toolkit is created to work all together, even if you don’t want to use all three tools, your strategy in order to be optimal has to cover the other previously described points.
With the Omega Trend, I provide an indicator that contains a lot of features both for the Trend parameter and the Signal one. The overlay indicator can be used for assistance both in the Trend and Location points, meanwhile, the candle coloring aim to be the ultimate indication of the trend direction, including in the formula a lot of different indicators that analyze both the price, the volume, and other variables. The signal, displayed as small points over or below the candle is a great tool to find the optimal entry and exit points once found the trade you want to take.
The Omega Analyst contains many tools chosen to be highly effective to determine the Location point (even if some of them can be used also as a Trend point). To have the best risk-to-reward ratio, you should be looking for a below-average or discount situation if you’re looking for a buy, and an above-average or premium situation if you’re looking to sell the asset.
The Omega Oscillator is the last tool of the Omega Toolkit and contains various tools that can be used mainly as filters for your trade, but you can also use it as a Signal or Location point. The oscillator you want to use, and the condition that the oscillator should have in order to verify the trade, should be determined previously and precisely in order to not make mistakes and have an objective analysis.
Summing all what has been said, the procedure to find a trade can go like this:
1. You find the direction of the trade thanks to the Trend point and your general technical analysis or smart money concepts analysis.
2. You identify the main level or zone to enter into the position
3. Once the price is in the zone or touched the level and respected the condition you previously identified, you wait for the signal.
4. Once the signal has been plotted (at candle closed) you verify the trade with your Filter parameter previously chosen.
5. If confirmed, you chose your entry point (or enter with a market order) and your exit points (both take profit and stop loss) that can be either fixed or dynamic and trailing.
The Omega Toolkit has a very big feature, customizability: thanks to this, you can (and should) adapt the parameters of the indicators to the market conditions. These conditions are the kind of asset you’re trading, the market condition, the time frame, and even the period of the year you’re currently in.
It’s not the tool that you chose to use that creates your strategy, it’s the way to use them in order to determine if you should enter the market or not; many tools can be used for different purposes, for example, you could use the seasonality of an asset both for the trend parameter to determine the direction or as a filter to increase the win rate, you could use the price relation to a moving average to analyze the direction of the trend or to identify the retracement levels, and I could continue for almost any tools available for technical analysis.
If you have any suggestions or anything you’d like to say, just leave a comment down here and we’ll talk about it!
