Zero-Lag MA Trend Following

15 Nov

Script Name: Zero-Lag MA Trend Following Auto-Trading

Purpose and Unique Features:
This script is designed to implement a trend-following auto-trading strategy by combining the Zero-Lag Moving Average (ZLMA), Exponential Moving Average (EMA), and ATR Bands. To differentiate it from similar scripts, the following key aspects are emphasized:



Zero-Lag MA (ZLMA):

Responds quickly to price changes, minimizing lag compared to EMA.
Detects crossovers with EMA and generates Diamond Signals to indicate trend reversals.



ATR Bands:

Measures market volatility to set stop-loss levels.
Helps optimize entry points and manage risk effectively.



Diamond Signals:

A vital visual cue indicating the early stages of trend reversals.
Green diamonds signal an uptrend, while red diamonds signal a downtrend.
Each component plays a distinct role, working synergistically to enhance trend detection and risk management. This system doesn’t merely combine indicators but optimizes them for comprehensive trend-following and risk control.

Usage Instructions:
Entry Conditions:

Long Entry:
Enter when a green Diamond Signal appears (ZLMA crosses above EMA).

Short Entry:
Enter when a red Diamond Signal appears (ZLMA crosses below EMA).
Exit Conditions:

Stop Loss:
Set at the lower boundary of the ATR band for BUY or the upper boundary for SELL at entry.

Take Profit:
Automatically executed based on a 1:2 risk-reward ratio.


Account Size: ¥100,0000
Commissions and Slippage: Assumed commission of 90 pips per trade and slippage of 1 pip.
Risk per Trade: 10% of account equity (adjustable based on risk tolerance).



Improvements and Original Features:
While based on open-source code, this script incorporates the following critical enhancements:


Diamond Signals from ZLMA and EMA Integration:

Improves entry accuracy with a proprietary trend detection strategy.

ATR Bands Utilization:


Adds a volatility-based risk management function.

Optimized Visual Entry Signals:

Includes plotted triangles (▲, ▼) to clearly indicate trend-following entry points.



Credits:
This script builds upon indicators developed by ChartPrime, whose innovative approach and insights have enabled a more advanced trend-following strategy. We extend our gratitude for their foundational work.

Additionally, it integrates technical methods based on Zero-Lag Moving Average (ZLMA), EMA, and ATR Bands, leveraging insights from the trading community.



Chart Display Options:
The script offers options to toggle the visual signals (Diamond Signals, trend lines, and entry points) on or off, keeping the chart clean while maximizing analytical efficiency.



Disclaimer:
This script is provided for educational purposes and past performance does not guarantee future results.
Use it responsibly with proper risk management.