Combined Strategy Trading Bot (RSI ADX 20SMA)

This trading strategy combines ADX and DI indicators, SuperTrend, RSI, and a simple moving average (SMA), along with a channel breakout component to generate buy and sell signals on the chart overlay.

To trade this strategy manually on TradingView:

• Set the ADX Smoothing and DI Length to 7 periods. Calculate the ADX indicator using the 'dirmov' and 'adx' functions, with conditions that consider the relationship between the plus and minus directional indicators and their absolute difference.
• Implement SuperTrend using a multiplier of 3 and ATR period of 10. This requires calculating the ATR and then the SuperTrend's upper and lower bands. Trend direction changes based on the relationship between closing prices and these bands.
• Use a 20-period SMA for trend verification and a 14-period RSI to determine overbought (OB level at 70) and oversold (OS level at 30) conditions.
• Define entry conditions as follows: Buy when the price is in an uptrend, above both the SuperTrend and the SMA20, and when the RSI indicates an oversold market.
• Close the position if the price crosses under the SMA20 or the RSI indicates an overbought condition.
• For the channel breakout, set the length to 5 periods. Consider the highest high and lowest low over this span to determine the up and down bounds, respectively. Enter a long position when the price breaks above the upper bound, and a short position when it breaks below the lower bound.

Improving the Combined Strategy Trading Bot (RSI ADX 20SMA) strategy manually involves a multifaceted approach that tailors the existing automated framework for discretionary trading. An effective plan should incorporate refinement of indicator settings, incorporation of additional market analysis, and continuous performance evaluation.

• Indicator Optimization: Experiment with the ADX and DI period settings beyond the default 7 periods to align with the market's volatility. Adjust the multiplier used in the SuperTrend calculation and the look-back period of the RSI to better suit different time frames and asset classes.
• Price Action Confirmation: Use candlestick patterns and support/resistance levels to confirm the signals provided by the strategy. For instance, before taking a buy signal, look for bullish reversals at support or continuation patterns like bull flags during uptrends.
• Volume Analysis: Incorporate volume indicators such as the Volume Weighted Average Price (VWAP) or On-Balance Volume (OBV) to validate the strength behind trend movements and breakout signals.
• Higher Time Frame Alignment: Ensure that the trend direction indicated by the strategy aligns with the overall trend on higher time frames. This can help filter out less probable trades and increase the strategy's success rate.
• Multiple Time Frame Analysis: Conduct a multiple time frame analysis whereby you confirm the trade setup on at least two different time frames before entering a trade. For example, if the strategy triggers a buy on the 1-hour chart, check for corresponding bullish signals on the 4-hour or daily chart.
• Economic Event Awareness: Be cognizant of the economic calendar and avoid trading around major economic releases that could lead to increased volatility and false signals.
• Custom Exit Rules: While the strategy includes basic exit rules, improve them by incorporating trailing stops or scaling out of positions. This could help in capturing more profits during strong trends or minimizing losses during reversals.
• Risk Management Enhancements: Beyond the set RSI oversold/overbought levels, consider using a fixed risk percentage per trade or a volatility-adjusted position sizing method like the Kelly Criterion.
• Continuous Backtesting: Regularly backtest the strategy against historical data to find the optimal settings and make adjustments for current market conditions.
• Real-time Adjustment: Be flexible to adjust in real-time as the market changes. For instance, adapt the channel breakout length during times of low volatility to reduce false breakouts or extend it during high volatility to avoid market noise.

The Combined Strategy Trading Bot (RSI ADX 20SMA) is tailored for traders who prefer a technical and systematic approach to the markets. It's particularly suitable for:

• Swing Traders: With its reliance on trend-following indicators and a 20-period SMA, it is well-suited for those looking to capture momentum over several days to weeks.
• Day Traders: The inclusion of RSI for overbought/oversold readings and the SuperTrend indicator allows for identifying shorter-term price movements, offering potential intraday trades.
• Breakout Traders: The channel breakout aspect attracts traders looking for significant price movements as a security breaks through established support or resistance levels.
• Systematic Traders: This strategy appeals to traders who appreciate a rules-based strategy to minimize emotional decision-making and enjoy backtesting to optimize their approach.

The automated nature of this strategy allows it to be implemented by traders who prefer to rely on quantitative signals to drive their trade entries and exits, with a focus on technical analysis.

• Strategy makeup: Utilizes ADX, RSI, 20-period SMA, and channel breakout for buy/sell signals.
• Indicator functions: ADX for trend strength, SuperTrend for trend direction, RSI for momentum, and SMA for trend confirmation.
• Automated trading: Pine Script™ allows for executing trades on TradingView automatically, suitable for systematic traders.
• Manual trading: Traders can manually apply these indicators on chart for discretionary judgments, complementing the system signals with price action.
• Alerts: Set alerts on TradingView based on strategy conditions for informed entry and exit points.
• Optimization: Adjust indicator settings, use higher time frame alignment, and incorporate volume analysis for better results.
• Risk Management: Embrace fixed risk per trade, use trailing stops, and adjust positions according to volatility levels.
• Trader suitability: Fits swing, day, and breakout traders seeking a technical and quantitatively driven trading method.