ARKA-ACD PMA StoplightThese PMAs are important components of Mark Fisher's ACD strategy. It is the fourth layer of his strategy. Also, We can use it for all MA-based strategies. Because it is based on Moving-average.
The PMA is a set of 3 EMAs on HLC3 data. Columns turn green when the MA1-period moving average is above the MA2-period moving average, and the MA2-period moving average is above the MA3-period moving average and all MAs are rising. If all three degrees of the trend are positive, the trend is up, and we can more confidently enter on the long side by confirming our trading system.
Columns turn red when the MA1-period moving average is below the MA2-period moving average and the MA2-period moving average is below the MA3-period moving average and all MAs are falling. If all three degrees of the trend are negative, the trend is a downside, and we can enter on the short side by confirming our trading system.
The columns turn yellow when the three moving averages are not in the two ways mentioned above, it is a sign of weakness and side market. In this situation, because the direction of the market is not yet clear, we do not have an entry and we wait.
PMA
PMA Strategy IdeaThis strategy idea uses three EMAs on HLC/3 data, know as PMA(Pivot Moving Average). This strategy is very useful in trending instruments on 1W and 1D timeframes. This is the implementation used in QuantCT app. The study version of this idea is published in public library as ACD PMA .
You can set operation mode to be Long/Short or long-only.
You also can set a fixed stop-loss or ignore it so that the strategy act solely based on entry and exit signals.
Trade Idea
When all EMAs are rising, market is considered rising (bullish) and the plotted indicator becomes green.
When all EMAs are falling, market is considered falling (bearish) and the plotted indicator becomes red.
Otherwise, market is considered ranging and the plotted indicator becomes orange.
Entry/Exit rules
Enter LONG if all EMAs are rising (i.e. when the plotted indicator becomes green).
Enter SHORT if all EMAs are falling (i.e. when the plotted indicator becomes red).
EXIT market if none of the above (i.e. when the plotted indicator becomes orange).
CAUTION
It's just a bare trading idea - a profitable one. However, you can enhance this idea and turn it into a full trading strategy with enhanced risk/money management and optimizing it, and you ABSOLUTELY should do this!
DON'T insist on using Long/Short mode on all instruments! This strategy performs much better in Long-Only mode on many (NOT All) trending instruments (Like BTC , ETH, etc.).
Moving Average Periodical DivergenceUses the difference between two PMA (Moving Average Periodical) indicators to create an oscillator.
Useful for visualizing daily/weekly cycles, strength and potential momentum. The defaults are 2 days (fast) and 5 days (slow).
Moving Average PeriodicalPMA derives the length of its rendered SMA from the number of periods (example: 5 days) and the length of the period (example: 390 minutes)
The result is an indicator that should be the same across different time-frames of the same type. Allowing for the simple calculation and generation of a Daily Moving Average like the 5 Day SMA (the default for minute based time-frames).
