Welcome to the Lab! š§Ŗ
To kick things off, letās tackle the biggest enemy of crypto algo-traders: The Chop. We all know the feeling. Your breakout strategy works perfectly during a bull run, but then the weekend arrives, volume drops, and your algo loses all its profits on false signals (whipsaws). š I wanted to share a simple Volatility Filter Iāve been using on my 1-hour ETH strategies. It checks if there is enough “juice” in the market before allowing a trade.
Here is the logic:
- It checks the ADX (trend strength).
- It compares the current volume to the moving average of the volume.
- If the market is “sleeping,” the code forces your strategy to stay FLAT.
The Code Snippet (Copy/Paste this into your system):// --- VOLATILITY FILTER START ---
MyADX = ADX[14]
VolMA = Average[20](Volume)
// Only trade if Trend is strong AND Volume is above average
FilterCondition = MyADX > 25 AND Volume > VolMA
IF FilterCondition THEN
// Your Entry Signal Here
// BUY at Market
ELSE
// Stay Flat / Do Nothing
ENDIF
// --- VOLATILITY FILTER END ---
I have attached the full .itf file below with customizable variables so you can optimize the ADX levels.
š Discussion: Has anyone tried this on Altcoins like SOL or DOGE? I feel like the settings might need to be more aggressive there. Let me know your results!