Larry Williams’ X bars & Linear Regression Slope

Larry Williams’ X bars & Linear Regression Slope

Hello everyone,

Do you remember Larry Williams’ 3 bars strategy?

Well, I tried to automate this strategy.

Without much success at the beginning, I admit, with the basic parameters.

I wanted to optimize it by adding a trend indicator, and changing the value of the moving averages.

Among many trend indicators (MACD, long period stochastics, Ichimoku, moving averages, etc.), I finally chose to keep a simple one : the slope of linear regression.

Moreover, this new approach remains in position as long as the linear regression slope is well oriented : the trade is not closed only by the price crossing above / below a moving average.

So I show you a simple code, which trades the bounces in trend, at the level of the bottom or the top of a channel of moving averages.

For the backtest to be efficient, it must be optimized according to the action / index / currency pair concerned.

Here is an example on the DAX, in graphs Daily, with 1 point of spread, over the last 20 years round.

Moving averages period : 12

Slope of linear regression : 28

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No information on this site is investment advice or a solicitation to buy or sell any financial instrument. Past performance is not indicative of future results. Trading may expose you to risk of loss greater than your deposits and is only suitable for experienced investors who have sufficient financial means to bear such risk.

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  1. reb • 05/15/2017 #

    Hello Marc
    your strat seems very intersting, will take a look
    Reb

  2. 897148 • 05/15/2017 #

    What exactly is meant by Total price?
    Is r1 =28 in your example the no of days for “Total Price” and the best line thru these points gives the slope?
    Looks very good but  I wish to clarify my understanding.

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