After doing some backtesting on my strategy, I’m getting some good numbers but there are many missed opportunities. It turns out, some kind of combination of Trend Strategy 1, and Trend Strategy 3 (Trend Pop) would be ideal. In the picture below, even though the TRENDDIRECTION indicator has established the trend, the CCI and SSD indicators were in overbought.
Trend Strategy 1 would only trade if the CCI and SSD indicators showed oversold. However, a Trend Pop would have been able to take advantage of the slow but steadily rising trend.
When I tested this out before, there were way too many false signals and the results were not good. The strategies rely heavily on the CCI indicator which can be very volatile. As you can see from the above image, the CCI crossed back and forth over the 100 line many times. An improvement to the Trend Pop strategy would come if:
the CCI was smoother so it didn’t cross over so many times; and
we could determine if the direction of the CCI is the same as the trend.