IBS (Internal Bar Strength) Trading Strategy for SPY and NDQ

26 thg 2

Implementation by AlgoTradeKit

Overview
The IBS Trading Strategy is a daily bars long-only trading system, based on the concept of Internal Bar Strength (IBS). The strategy aims to identify potential reversals by monitoring how the previous bar’s close positions itself within its high-low range. It is suitable for stock and US indices. The default parameters are optimized for SPY/SPX and NDQ/QQQ

Strategy Concept
The Internal Bar Strength (IBS) is calculated using the formula:

IBS = (Previous Close - Previous Low) / (Previous High - Previous Low)

This value always lies between 0 and 1. An IBS value below 0.2 is typically interpreted as an oversold condition, while a value above 0.9 suggests an overbought state.

Trading Rules
- Long Entry:
- Condition 1: IBS is below the user-defined entry threshold (default is 0.2).
- Condition 2: The current price is above an N-period Exponential Moving Average (EMA) (default period is 252).
- Note: You can disable the EMA condition by setting the EMA period to 0.

- Long Exit
- The position is closed when IBS rises above the user-defined exit threshold (default is 0.9).

Customization Options
- IBS Entry Threshold: Adjust to set the sensitivity for entering a long trade based on oversold conditions.
- IBS Exit Threshold: Customize to define the exit point when the market becomes overbought.
- EMA Period: Set the lookback period for the EMA to align with your trend bias; disable this condition by setting the period to 0.

Risk Management & Trading Considerations
- Designed for daily charts, the strategy captures higher timeframe trends and minimizes noise.
- The entry and exit conditions are straightforward, aiming to avoid over-trading while letting clear signals dictate trade management.
- Always use proper risk management techniques and test the strategy thoroughly on historical data and in a simulated environment before applying it in live markets.

Disclaimer
This strategy is for educational and informational purposes only and does not constitute financial advice. Trading involves risk, and past performance is not indicative of future results. Always conduct your own research and consider your risk tolerance before making any trades.

26 thg 2

Phát hành các Ghi chú

Implementation by AlgoTradeKit

Overview
The IBS Trading Strategy is a daily bars long-only trading system, based on the concept of Internal Bar Strength (IBS). The strategy aims to identify potential reversals by monitoring how the previous bar’s close positions itself within its high-low range. It is suitable for stock and US indices. The default parameters are optimized for SPY/SPX and NDQ/QQQ

Strategy Concept
The Internal Bar Strength (IBS) is calculated using the formula:

IBS = (Previous Close - Previous Low) / (Previous High - Previous Low)

This value always lies between 0 and 1. An IBS value below 0.2 is typically interpreted as an oversold condition, while a value above 0.9 suggests an overbought state.

Trading Rules
- Long Entry:
- Condition 1: IBS is below the user-defined entry threshold (default is 0.2).
- Condition 2: The current price is above an N-period Exponential Moving Average (EMA) (default period is 252).
- Note: You can disable the EMA condition by setting the EMA period to 0.

- Long Exit
- The position is closed when IBS rises above the user-defined exit threshold (default is 0.9).

Customization Options
- IBS Entry Threshold: Adjust to set the sensitivity for entering a long trade based on oversold conditions.
- IBS Exit Threshold: Customize to define the exit point when the market becomes overbought.
- EMA Period: Set the lookback period for the EMA to align with your trend bias; disable this condition by setting the period to 0.

Risk Management & Trading Considerations
- Designed for daily charts, the strategy captures higher timeframe trends and minimizes noise.
- The entry and exit conditions are straightforward, aiming to avoid over-trading while letting clear signals dictate trade management.
- Always use proper risk management techniques and test the strategy thoroughly on historical data and in a simulated environment before applying it in live markets.

Disclaimer
This strategy is for educational and informational purposes only and does not constitute financial advice. Trading involves risk, and past performance is not indicative of future results. Always conduct your own research and consider your risk tolerance before making any trades.

26 thg 2

Phát hành các Ghi chú

Introduced new parameter called "Minimum Distance for New Entry (%)". The aim is to reduce further the drawdown by assuring that new positions will be opened only at favorable price.

26 thg 2

Phát hành các Ghi chú

Added new parameter, called "Maximum Trade Duration (days)". The position will be closed either by exit condition, or after maximum trade duration days are reached.

26 thg 2

Phát hành các Ghi chú

Removed plot functionallity.

4 thg 3

Phát hành các Ghi chú

Updated the default account size value. Also introduced trade type: Long only, Short only, Long + Short. Added Moving Average as trend filter. Inside the source code you find the recommended settings for SPY and QQQ/NDQ