Break of structure (BOS) forex Strategy

2021년 4월 1일

Please read all Details before using this indicator
This strategy is based on taking position after the break of a Previous High/Low swing happens (fixed time frame), the break of structure happens because of the swing happens then we go long or short respectively in this strategy.
I will be discussing the setting details through which you can make it work on different forex pairs.

Does it work on other pairs?
Yes, I have found similar back test results on other USD pairs.

Does it works on smaller time frame?
Yes it does work on smaller time frame , you have to understand the below concepts used and try different settings.
For the user the most important thing is to understand the settings of the indicator so that they can optimize the setting and get the best results:

This indicator contains the following IMPORTANT setting:
i. Fixed trading session for long trades (long position can be taken in that period of time only)
ii. Fixed trading session for short trades (Short position can be taken in that period of time only)

The concept behind restricting the time to go long or short is because in forex the particular pair move in a particular direction depending upon the currency and time zones.
This strategy works on different forex pairs, you need to find the best settings. I will be providing the best settings which works for this strategy and different pairs.

2. Choose Previous High/Low Timeframe
This is the most important option where you have to choose the timeframe for which you want H/L by default it is set to “D”. This timeframe H/L reference will be taken for taking trading decisions.

3.Setting for back test selection date range you can check the beck test of a particular time range.

4.You can check Long and Short positions performance separately, by unchecking the “Go_long” option it will remove all long positions from back test. Vice versa for “Go_short option”

5.Internal Bar Strength
IBS is simply an indicator where you buy on weakness and sell on strength, the cornerstone of any mean-reverting strategy.
It oscillates from zero to one and measures the relative position of the closing price relative to the High and Low.
IBS = (Close – Low) / (High – Low)

In the input setting the you can disable enable the IBS option from the strategy.

6. Parkinson volatility
Parkinson volatility is a volatility measure that uses the stock’s high and low price of the day (can be changed in the setting, instead of day it can be set to any bar length)
The main difference between regular volatility and Parkinson volatility is that the latter uses high and low prices for a day, rather than only the closing price.

In the setting you have three option
i. Enter Volatility Threshold
If the Parkinson volatility value is greater than the the threshold value then it lets the trade happen.
ii.Set the high/low bar time frame for calculating Parkinson volatility. ( Set 60m by default)

Formula used as below:
high_=security(syminfo.ticker, input("60"), high)
low_=security(syminfo.ticker, input("60"), low)
hourlyRangeSquared = pow((log(high_) - log(low_)), 2)
dailyParkinsonVol = sqrt(sum(hourlyRangeSquared, 24) / (4 * log(2)))


7. "Enter no of contract size"
This setting helps you to set the contract size , by default it is set to 100000.

8. “Zigzag Filter Length” this setting is for SWING H/L Lookback. With the help of this I have ploted Swing Support and Resistance.

9.Futrther confirmation of trade is done through the RSI criteria. In this I have provided four kind of RSI confirmation you can test all by selecting any one of the four.

i. filter trade on the basis of BB of RSI (as shown in the image)
ii. filter trade on the basis of RSI Levels (RSI>50 for long, vice versa for short)
iii. filter trade by rsi>basis of BB of RSI(for long) & rsi<50(for short)
iv. filter trade by rsi>50(long) & rsi< basis of BB of RSI(short)

SELECT ONLY ONE OF THE ABOVE IN SETTING.


10.For Exiting the trade I have used the trailing SL you can change it in setting.
You can exit the trade using two targets (two take profit) using different size for exiting the trade.

If you want to take only on target then you have to make QANTITY of shares for 1st Exit as 100. Then you will exit all your position in the first target.


A big thanks to kodify.net there articles are very helpful kodify.net/tradingview-programming-articles/

Thanks to Mickey for providing assistance.

Thanks to stack overflow community for clearing the doubts.

Trading view official documentation on V4 of pine script also helped me.

2021년 4월 2일

릴리즈 노트

Removed some errors

2021년 4월 4일

릴리즈 노트

added visual description and removed typo error.

2021년 4월 4일

릴리즈 노트

Description on chart added .

2021년 9월 9일

릴리즈 노트

Major Updates Done.
Better Setting Options.

2021년 9월 9일

릴리즈 노트

minor update

2023년 5월 6일

릴리즈 노트

converted to version 5