MDZ Strategy v4.2 - Multi-factor trend strategy

1월 6일

What This Strategy Does

MDZ (Momentum Divergence Zones) v4.2 is a trend-following strategy that enters long positions when multiple momentum and trend indicators align. It's designed for swing trading on higher timeframes (2H-4H) and uses ATR-based position management.
The strategy waits for strong trend confirmation before entry, requiring agreement across five different filters. This reduces trade frequency but aims to improve signal quality.

Entry Logic

A long entry triggers when ALL of the following conditions are true:
1. EMA Stack (Trend Structure)

Price > EMA 20 > EMA 50 > EMA 200
This "stacked" alignment indicates a strong established uptrend

2. RSI Filter (Momentum Window)

RSI between 45-75 (default)
Confirms momentum without entering overbought territory

3. ADX Filter (Trend Strength)

ADX > 20 (default)
Ensures the trend has sufficient strength, not a ranging market

4. MACD Confirmation

MACD line above signal line
Histogram increasing (momentum accelerating)

5. Directional Movement

+DI > -DI
Confirms bullish directional pressure


Exit Logic

Positions are managed with ATR-based levels:
ParameterDefaultDescriptionStop Loss2.5 × ATRBelow entry priceTake Profit6.0 × ATRAbove entry priceTrailing Stop2.0 × ATROptional, activates after entry
The default configuration produces a 1:2.4 risk-reward ratio.

Presets

The strategy includes optimized presets based on historical testing:
PresetTimeframeNotes1H Standard1 HourMore frequent signals2H Low DD2 HourConservative settings3H Optimized3 HourBalanced approach4H Swing4 HourWider stops for swing tradesCustomAnyFull manual control
Select "Custom" to adjust all parameters manually.

Inputs Explained

EMAs

Fast EMA (20): Short-term trend
Slow EMA (50): Medium-term trend
Trend EMA (200): Long-term trend filter

RSI

Length: Lookback period (default 14)
Min/Max: Entry window to avoid extremes

ADX

Min ADX: Minimum trend strength threshold

Risk

Stop Loss ATR: Multiplier for stop distance
Take Profit ATR: Multiplier for target distance
Trail ATR: Trailing stop distance (if enabled)

Session (Optional)

Filter entries by time of day
Recommended OFF for 3H+ timeframes


What's Displayed

Info Panel (Top Right)

Current preset
Trend status (Strong/Wait)
ADX, RSI, MACD readings
Position status
Risk-reward ratio

Stats Panel (Top Left)

Net P&L %
Total trades
Win rate
Profit factor
Maximum drawdown

Chart

EMA lines (20 blue, 50 orange, 200 purple)
Green background during strong uptrend
Triangle markers on entry signals


Important Notes

⚠️ This is a long-only strategy. It does not take short positions.
⚠️ Historical results do not guarantee future performance. Backtests show what would have happened in the past under specific conditions. Markets change, and any strategy can experience drawdowns or extended losing periods.
⚠️ Risk management is your responsibility. The default settings risk 100% of equity per trade for backtesting purposes. In live trading, appropriate position sizing based on your risk tolerance is essential.
⚠️ Slippage and commissions matter. The backtest includes 0.02% commission and 1 tick slippage, but actual execution costs vary by broker and market conditions.

Best Practices

Test on your specific market — Results vary significantly across different instruments
Use appropriate position sizing — Never risk more than you can afford to lose
Combine with your own analysis — No indicator replaces understanding market context
Paper trade first — Validate the strategy matches your trading style before risking capital


Alerts

Two alerts are available:

MDZ Long Entry: Fires when all entry conditions are met
Uptrend Started: Fires when EMA stack first aligns bullish


Methodology

This strategy is based on the principle that trend continuation has better odds than reversal when multiple timeframe momentum indicators agree. By requiring five independent confirmations, it filters out weak setups at the cost of fewer total signals.
The ATR-based exits adapt to current volatility rather than using fixed pip/point targets, which helps the strategy adjust to different market conditions.

Questions? Leave a comment below.

1월 6일

릴리즈 노트

What This Strategy Does

MDZ (Momentum Divergence Zones) v4.2 is a trend-following strategy that enters long positions when multiple momentum and trend indicators align. It's designed for swing trading on higher timeframes (2H-4H) and uses ATR-based position management.
The strategy waits for strong trend confirmation before entry, requiring agreement across five different filters. This reduces trade frequency but aims to improve signal quality.

Entry Logic

A long entry triggers when ALL of the following conditions are true:
1. EMA Stack (Trend Structure)

Price > EMA 20 > EMA 50 > EMA 200
This "stacked" alignment indicates a strong established uptrend

2. RSI Filter (Momentum Window)

RSI between 45-75 (default)
Confirms momentum without entering overbought territory

3. ADX Filter (Trend Strength)

ADX > 20 (default)
Ensures the trend has sufficient strength, not a ranging market

4. MACD Confirmation

MACD line above signal line
Histogram increasing (momentum accelerating)

5. Directional Movement

+DI > -DI
Confirms bullish directional pressure


Exit Logic

Positions are managed with ATR-based levels:
ParameterDefaultDescriptionStop Loss2.5 × ATRBelow entry priceTake Profit6.0 × ATRAbove entry priceTrailing Stop2.0 × ATROptional, activates after entry
The default configuration produces a 1:2.4 risk-reward ratio.

Presets

The strategy includes optimized presets based on historical testing:
PresetTimeframeNotes1H Standard1 HourMore frequent signals2H Low DD2 HourConservative settings3H Optimized3 HourBalanced approach4H Swing4 HourWider stops for swing tradesCustomAnyFull manual control
Select "Custom" to adjust all parameters manually.

Inputs Explained

EMAs

Fast EMA (20): Short-term trend
Slow EMA (50): Medium-term trend
Trend EMA (200): Long-term trend filter

RSI

Length: Lookback period (default 14)
Min/Max: Entry window to avoid extremes

ADX

Min ADX: Minimum trend strength threshold

Risk

Stop Loss ATR: Multiplier for stop distance
Take Profit ATR: Multiplier for target distance
Trail ATR: Trailing stop distance (if enabled)

Session (Optional)

Filter entries by time of day
Recommended OFF for 3H+ timeframes


What's Displayed

Info Panel (Top Right)

Current preset
Trend status (Strong/Wait)
ADX, RSI, MACD readings
Position status
Risk-reward ratio

Stats Panel (Top Left)

Net P&L %
Total trades
Win rate
Profit factor
Maximum drawdown

Chart

EMA lines (20 blue, 50 orange, 200 purple)
Green background during strong uptrend
Triangle markers on entry signals


Important Notes

⚠️ This is a long-only strategy. It does not take short positions.
⚠️ Historical results do not guarantee future performance. Backtests show what would have happened in the past under specific conditions. Markets change, and any strategy can experience drawdowns or extended losing periods.
⚠️ Risk management is your responsibility. The default settings risk 100% of equity per trade for backtesting purposes. In live trading, appropriate position sizing based on your risk tolerance is essential.
⚠️ Slippage and commissions matter. The backtest includes 0.02% commission and 1 tick slippage, but actual execution costs vary by broker and market conditions.

Best Practices

Test on your specific market — Results vary significantly across different instruments
Use appropriate position sizing — Never risk more than you can afford to lose
Combine with your own analysis — No indicator replaces understanding market context
Paper trade first — Validate the strategy matches your trading style before risking capital


Alerts

Two alerts are available:

MDZ Long Entry: Fires when all entry conditions are met
Uptrend Started: Fires when EMA stack first aligns bullish


Methodology

This strategy is based on the principle that trend continuation has better odds than reversal when multiple timeframe momentum indicators agree. By requiring five independent confirmations, it filters out weak setups at the cost of fewer total signals.
The ATR-based exits adapt to current volatility rather than using fixed pip/point targets, which helps the strategy adjust to different market conditions.

Questions? Leave a comment below.