EASY Mode -Machine learning & Artificial intelligence technique

3 hari yang lalu

TL:DR
I've created a new indicator script AND strategy script (shown here) to showcase a usable machine learning technique commonly referred to as a neural network. The scripts can be set to alert you when to buy and when to sell. To evaluate the ability of the indicator, I set the order size to 100%, because I wanted to directly compare it to the buy and hold of Bitcoin. Sure enough, Bitcoin buy and hold gained 200%, but in the same time period, this trading strategy gained 600% on over 300 trades. Now obviously, fees, commission, and slippage must also be considered in REAL trading. The reason I backtested without those is because this is a comparison test between the indicator and the buy & hold strategy. Once this shows comparison test shows success, then you can add in commission, fees, and slippage. If commission, fees and slippage is too high per return of each trade, then you can increase the timeframe to reduce the number of trades and increase the profit return of each trade.

Below is how the indicator works. If you have any questions, or feedback, please leave them in the comments section!

The Neural Network Proxy Strategy by NHBprod blends the principles of advanced technical analysis with neural network-inspired weight allocation. Designed for traders looking to capture dynamic market trends and reversals, this strategy employs a weighted combination of three proven indicators: RSI, MACD, and EMA. By normalizing and integrating these components, the Neural Network Proxy provides clear, actionable signals tailored for diverse market conditions and trading styles.

💫 Indicator Architecture
The Neural Network Proxy leverages a multi-indicator framework inspired by neural network logic. It calculates a composite proxy value that highlights the relative strength, momentum, and price positioning in real time. The system dynamically identifies trends, reversals, and critical turning points with a streamlined approach to filtering market noise.

By assigning customizable weights to RSI, MACD, and EMA signals, this strategy ensures adaptability across different assets and timeframes. The algorithm excels at detecting shifts in market sentiment, enabling traders to act with confidence.

📊 Technical Composition and Calculation
The Neural Network Proxy is a dynamic trend-following and reversal-detection system composed of:

Relative Strength Index (RSI): Measures momentum and normalizes values for -1 to 1 scaling.
MACD Line vs Signal Line: Highlights momentum shifts with normalized differences.
Exponential Moving Average (EMA): Captures price deviations from the trend for mean-reversion analysis.
Weighted Neural Proxy: Combines normalized values using trader-adjustable weights.
📈 Key Indicators and Features
The Neural Network Proxy Strategy provides:

Trend and Reversal Detection: Signals appear when the proxy crosses key thresholds:
Long Entry: Proxy > 0.5 confirms bullish strength.
Short Entry: Proxy < -0.5 confirms bearish momentum.
Adaptive Weighting: Fine-tune weights (w1, w2, w3) to emphasize momentum, trend, or mean-reversion signals.
Customizable Parameters: Adjust RSI, MACD, and EMA lengths to match your trading style.
High-Visibility Visualization: Tracks proxy values and threshold levels with bold, color-coded plots.
⚡️ Practical Applications and Examples
✅ Add the Strategy:
Add the Neural Network Proxy Strategy to your TradingView chart and enable backtesting.
Fine-tune input parameters for optimal performance on your chosen timeframe and asset.
👀 Monitor Proxy Values:
Watch for proxy levels crossing +0.5 for bullish trends and -0.5 for bearish trends.
Use the trend lines (green/red) as visual markers for signal confirmation.
🎯 Execute Trades:
Long signals (📈) trigger when price action confirms a bullish reversal above the 0.5 threshold.
Short signals (📉) trigger when price action validates bearish momentum below -0.5.
🔔 Set Alerts:
Configure alerts for long and short entries to stay on top of critical market movements.

Key parameters to optimize:
RSI Length: Control sensitivity to price momentum.
MACD Fast/Slow: Adjust trend strength detection.
EMA Length: Tune for longer-term trend alignment.
Weights: Experiment with w1, w2, and w3 to prioritize specific indicators.