KST Strategy [Skyrexio]Overview
KST Strategy leverages Know Sure Thing (KST) indicator in conjunction with the Williams Alligator and Moving average to obtain the high probability setups. KST is used for for having the high probability to enter in the direction of a current trend when momentum is rising, Alligator is used as a short term trend filter, while Moving average approximates the long term trend and allows trades only in its direction. Also strategy has the additional optional filter on Choppiness Index which does not allow trades if market is choppy, above the user-specified threshold. Strategy has the user specified take profit and stop-loss numbers, but multiplied by Average True Range (ATR) value on the moment when trade is open. The strategy opens only long trades.
Unique Features
ATR based stop-loss and take profit. Instead of fixed take profit and stop-loss percentage strategy utilizes user chosen numbers multiplied by ATR for its calculation.
Configurable Trading Periods. Users can tailor the strategy to specific market windows, adapting to different market conditions.
Optional Choppiness Index filter. Strategy allows to choose if it will use the filter trades with Choppiness Index and set up its threshold.
Methodology
The strategy opens long trade when the following price met the conditions:
Close price is above the Alligator's jaw line
Close price is above the filtering Moving average
KST line of Know Sure Thing indicator shall cross over its signal line (details in justification of methodology)
If the Choppiness Index filter is enabled its value shall be less than user defined threshold
When the long trade is executed algorithm defines the stop-loss level as the low minus user defined number, multiplied by ATR at the trade open candle. Also it defines take profit with close price plus user defined number, multiplied by ATR at the trade open candle. While trade is in progress, if high price on any candle above the calculated take profit level or low price is below the calculated stop loss level, trade is closed.
Strategy settings
In the inputs window user can setup the following strategy settings:
ATR Stop Loss (by default = 1.5, number of ATRs to calculate stop-loss level)
ATR Take Profit (by default = 3.5, number of ATRs to calculate take profit level)
Filter MA Type (by default = Least Squares MA, type of moving average which is used for filter MA)
Filter MA Length (by default = 200, length for filter MA calculation)
Enable Choppiness Index Filter (by default = true, setting to choose the optional filtering using Choppiness index)
Choppiness Index Threshold (by default = 50, Choppiness Index threshold, its value shall be below it to allow trades execution)
Choppiness Index Length (by default = 14, length used in Choppiness index calculation)
KST ROC Length #1 (by default = 10, value used in KST indicator calculation, more information in Justification of Methodology)
KST ROC Length #2 (by default = 15, value used in KST indicator calculation, more information in Justification of Methodology)
KST ROC Length #3 (by default = 20, value used in KST indicator calculation, more information in Justification of Methodology)
KST ROC Length #4 (by default = 30, value used in KST indicator calculation, more information in Justification of Methodology)
KST SMA Length #1 (by default = 10, value used in KST indicator calculation, more information in Justification of Methodology)
KST SMA Length #2 (by default = 10, value used in KST indicator calculation, more information in Justification of Methodology)
KST SMA Length #3 (by default = 10, value used in KST indicator calculation, more information in Justification of Methodology)
KST SMA Length #4 (by default = 15, value used in KST indicator calculation, more information in Justification of Methodology)
KST Signal Line Length (by default = 10, value used in KST indicator calculation, more information in Justification of Methodology)
User can choose the optimal parameters during backtesting on certain price chart.
Justification of Methodology
Before understanding why this particular combination of indicator has been chosen let's briefly explain what is KST, Williams Alligator, Moving Average, ATR and Choppiness Index.
The KST (Know Sure Thing) is a momentum oscillator developed by Martin Pring. It combines multiple Rate of Change (ROC) values, smoothed over different timeframes, to identify trend direction and momentum strength. First of all, what is ROC? ROC (Rate of Change) is a momentum indicator that measures the percentage change in price between the current price and the price a set number of periods ago.
ROC = 100 * (Current Price - Price N Periods Ago) / Price N Periods Ago
In our case N is the KST ROC Length inputs from settings, here we will calculate 4 different ROCs to obtain KST value:
KST = ROC1_smooth × 1 + ROC2_smooth × 2 + ROC3_smooth × 3 + ROC4_smooth × 4
ROC1 = ROC(close, KST ROC Length #1), smoothed by KST SMA Length #1,
ROC2 = ROC(close, KST ROC Length #2), smoothed by KST SMA Length #2,
ROC3 = ROC(close, KST ROC Length #3), smoothed by KST SMA Length #3,
ROC4 = ROC(close, KST ROC Length #4), smoothed by KST SMA Length #4
Also for this indicator the signal line is calculated:
Signal = SMA(KST, KST Signal Line Length)
When the KST line rises, it indicates increasing momentum and suggests that an upward trend may be developing. Conversely, when the KST line declines, it reflects weakening momentum and a potential downward trend. A crossover of the KST line above its signal line is considered a buy signal, while a crossover below the signal line is viewed as a sell signal. If the KST stays above zero, it indicates overall bullish momentum; if it remains below zero, it points to bearish momentum. The KST indicator smooths momentum across multiple timeframes, helping to reduce noise and provide clearer signals for medium- to long-term trends.
Next, let’s discuss the short-term trend filter, which combines the Williams Alligator and Williams Fractals. Williams Alligator
Developed by Bill Williams, the Alligator is a technical indicator that identifies trends and potential market reversals. It consists of three smoothed moving averages:
Jaw (Blue Line): The slowest of the three, based on a 13-period smoothed moving average shifted 8 bars ahead.
Teeth (Red Line): The medium-speed line, derived from an 8-period smoothed moving average shifted 5 bars forward.
Lips (Green Line): The fastest line, calculated using a 5-period smoothed moving average shifted 3 bars forward.
When the lines diverge and align in order, the "Alligator" is "awake," signaling a strong trend. When the lines overlap or intertwine, the "Alligator" is "asleep," indicating a range-bound or sideways market. This indicator helps traders determine when to enter or avoid trades.
The next indicator is Moving Average. It has a lot of different types which can be chosen to filter trades and the Least Squares MA is used by default settings. Let's briefly explain what is it.
The Least Squares Moving Average (LSMA) — also known as Linear Regression Moving Average — is a trend-following indicator that uses the least squares method to fit a straight line to the price data over a given period, then plots the value of that line at the most recent point. It draws the best-fitting straight line through the past N prices (using linear regression), and then takes the endpoint of that line as the value of the moving average for that bar. The LSMA aims to reduce lag and highlight the current trend more accurately than traditional moving averages like SMA or EMA.
Key Features:
It reacts faster to price changes than most moving averages.
It is smoother and less noisy than short-term EMAs.
It can be used to identify trend direction, momentum, and potential reversal points.
ATR (Average True Range) is a volatility indicator that measures how much an asset typically moves during a given period. It was introduced by J. Welles Wilder and is widely used to assess market volatility, not direction.
To calculate it first of all we need to get True Range (TR), this is the greatest value among:
High - Low
abs(High - Previous Close)
abs(Low - Previous Close)
ATR = MA(TR, n) , where n is number of periods for moving average, in our case equals 14.
ATR shows how much an asset moves on average per candle/bar. A higher ATR means more volatility; a lower ATR means a calmer market.
The Choppiness Index is a technical indicator that quantifies whether the market is trending or choppy (sideways). It doesn't indicate trend direction — only the strength or weakness of a trend. Higher Choppiness Index usually approximates the sideways market, while its low value tells us that there is a high probability of a trend.
Choppiness Index = 100 × log10(ΣATR(n) / (MaxHigh(n) - MinLow(n))) / log10(n)
where:
ΣATR(n) = sum of the Average True Range over n periods
MaxHigh(n) = highest high over n periods
MinLow(n) = lowest low over n periods
log10 = base-10 logarithm
Now let's understand how these indicators work in conjunction and why they were chosen for this strategy. KST indicator approximates current momentum, when it is rising and KST line crosses over the signal line there is high probability that short term trend is reversing to the upside and strategy allows to take part in this potential move. Alligator's jaw (blue) line is used as an approximation of a short term trend, taking trades only above it we want to avoid trading against trend to increase probability that long trade is going to be winning.
Almost the same for Moving Average, but it approximates the long term trend, this is just the additional filter. If we trade in the direction of the long term trend we increase probability that higher risk to reward trade will hit the take profit. Choppiness index is the optional filter, but if it turned on it is used for approximating if now market is in sideways or in trend. On the range bounded market the potential moves are restricted. We want to decrease probability opening trades in such condition avoiding trades if this index is above threshold value.
When trade is open script sets the stop loss and take profit targets. ATR approximates the current volatility, so we can make a decision when to exit a trade based on current market condition, it can increase the probability that strategy will avoid the excessive stop loss hits, but anyway user can setup how many ATRs to use as a stop loss and take profit target. As was said in the Methodology stop loss level is obtained by subtracting number of ATRs from trade opening candle low, while take profit by adding to this candle's close.
Backtest Results
Operating window: Date range of backtests is 2023.01.01 - 2025.05.01. It is chosen to let the strategy to close all opened positions.
Commission and Slippage: Includes a standard Binance commission of 0.1% and accounts for possible slippage over 5 ticks.
Initial capital: 10000 USDT
Percent of capital used in every trade: 60%
Maximum Single Position Loss: -5.53%
Maximum Single Profit: +8.35%
Net Profit: +5175.20 USDT (+51.75%)
Total Trades: 120 (56.67% win rate)
Profit Factor: 1.747
Maximum Accumulated Loss: 1039.89 USDT (-9.1%)
Average Profit per Trade: 43.13 USDT (+0.6%)
Average Trade Duration: 27 hours
These results are obtained with realistic parameters representing trading conditions observed at major exchanges such as Binance and with realistic trading portfolio usage parameters.
How to Use
Add the script to favorites for easy access.
Apply to the desired timeframe and chart (optimal performance observed on 1h BTC/USDT).
Configure settings using the dropdown choice list in the built-in menu.
Set up alerts to automate strategy positions through web hook with the text: {{strategy.order.alert_message}}
Disclaimer:
Educational and informational tool reflecting Skyrexio commitment to informed trading. Past performance does not guarantee future results. Test strategies in a simulated environment before live implementation.
Williamsalligator
MultiLayer Acceleration/Deceleration Strategy [Skyrexio]Overview
MultiLayer Acceleration/Deceleration Strategy leverages the combination of Acceleration/Deceleration Indicator(AC), Williams Alligator, Williams Fractals and Exponential Moving Average (EMA) to obtain the high probability long setups. Moreover, strategy uses multi trades system, adding funds to long position if it considered that current trend has likely became stronger. Acceleration/Deceleration Indicator is used for creating signals, while Alligator and Fractal are used in conjunction as an approximation of short-term trend to filter them. At the same time EMA (default EMA's period = 100) is used as high probability long-term trend filter to open long trades only if it considers current price action as an uptrend. More information in "Methodology" and "Justification of Methodology" paragraphs. The strategy opens only long trades.
Unique Features
No fixed stop-loss and take profit: Instead of fixed stop-loss level strategy utilizes technical condition obtained by Fractals and Alligator to identify when current uptrend is likely to be over (more information in "Methodology" and "Justification of Methodology" paragraphs)
Configurable Trading Periods: Users can tailor the strategy to specific market windows, adapting to different market conditions.
Multilayer trades opening system: strategy uses only 10% of capital in every trade and open up to 5 trades at the same time if script consider current trend as strong one.
Short and long term trend trade filters: strategy uses EMA as high probability long-term trend filter and Alligator and Fractal combination as a short-term one.
Methodology
The strategy opens long trade when the following price met the conditions:
1. Price closed above EMA (by default, period = 100). Crossover is not obligatory.
2. Combination of Alligator and Williams Fractals shall consider current trend as an upward (all details in "Justification of Methodology" paragraph)
3. Acceleration/Deceleration shall create one of two types of long signals (all details in "Justification of Methodology" paragraph). Buy stop order is placed one tick above the candle's high of last created long signal.
4. If price reaches the order price, long position is opened with 10% of capital.
5. If currently we have opened position and price creates and hit the order price of another one long signal, another one long position will be added to the previous with another one 10% of capital. Strategy allows to open up to 5 long trades simultaneously.
6. If combination of Alligator and Williams Fractals shall consider current trend has been changed from up to downtrend, all long trades will be closed, no matter how many trades has been opened.
Script also has additional visuals. If second long trade has been opened simultaneously the Alligator's teeth line is plotted with the green color. Also for every trade in a row from 2 to 5 the label "Buy More" is also plotted just below the teeth line. With every next simultaneously opened trade the green color of the space between teeth and price became less transparent.
Strategy settings
In the inputs window user can setup strategy setting: EMA Length (by default = 100, period of EMA, used for long-term trend filtering EMA calculation). User can choose the optimal parameters during backtesting on certain price chart.
Justification of Methodology
Let's explore the key concepts of this strategy and understand how they work together. We'll begin with the simplest: the EMA.
The Exponential Moving Average (EMA) is a type of moving average that assigns greater weight to recent price data, making it more responsive to current market changes compared to the Simple Moving Average (SMA). This tool is widely used in technical analysis to identify trends and generate buy or sell signals. The EMA is calculated as follows:
1.Calculate the Smoothing Multiplier:
Multiplier = 2 / (n + 1), Where n is the number of periods.
2. EMA Calculation
EMA = (Current Price) × Multiplier + (Previous EMA) × (1 − Multiplier)
In this strategy, the EMA acts as a long-term trend filter. For instance, long trades are considered only when the price closes above the EMA (default: 100-period). This increases the likelihood of entering trades aligned with the prevailing trend.
Next, let’s discuss the short-term trend filter, which combines the Williams Alligator and Williams Fractals. Williams Alligator
Developed by Bill Williams, the Alligator is a technical indicator that identifies trends and potential market reversals. It consists of three smoothed moving averages:
Jaw (Blue Line): The slowest of the three, based on a 13-period smoothed moving average shifted 8 bars ahead.
Teeth (Red Line): The medium-speed line, derived from an 8-period smoothed moving average shifted 5 bars forward.
Lips (Green Line): The fastest line, calculated using a 5-period smoothed moving average shifted 3 bars forward.
When the lines diverge and align in order, the "Alligator" is "awake," signaling a strong trend. When the lines overlap or intertwine, the "Alligator" is "asleep," indicating a range-bound or sideways market. This indicator helps traders determine when to enter or avoid trades.
Fractals, another tool by Bill Williams, help identify potential reversal points on a price chart. A fractal forms over at least five consecutive bars, with the middle bar showing either:
Up Fractal: Occurs when the middle bar has a higher high than the two preceding and two following bars, suggesting a potential downward reversal.
Down Fractal: Happens when the middle bar shows a lower low than the surrounding two bars, hinting at a possible upward reversal.
Traders often use fractals alongside other indicators to confirm trends or reversals, enhancing decision-making accuracy.
How do these tools work together in this strategy? Let’s consider an example of an uptrend.
When the price breaks above an up fractal, it signals a potential bullish trend. This occurs because the up fractal represents a shift in market behavior, where a temporary high was formed due to selling pressure. If the price revisits this level and breaks through, it suggests the market sentiment has turned bullish.
The breakout must occur above the Alligator’s teeth line to confirm the trend. A breakout below the teeth is considered invalid, and the downtrend might still persist. Conversely, in a downtrend, the same logic applies with down fractals.
In this strategy if the most recent up fractal breakout occurs above the Alligator's teeth and follows the last down fractal breakout below the teeth, the algorithm identifies an uptrend. Long trades can be opened during this phase if a signal aligns. If the price breaks a down fractal below the teeth line during an uptrend, the strategy assumes the uptrend has ended and closes all open long trades.
By combining the EMA as a long-term trend filter with the Alligator and fractals as short-term filters, this approach increases the likelihood of opening profitable trades while staying aligned with market dynamics.
Now let's talk about Acceleration/Deceleration signals. AC indicator is calculated using the Awesome Oscillator, so let's first of all briefly explain what is Awesome Oscillator and how it can be calculated. The Awesome Oscillator (AO), developed by Bill Williams, is a momentum indicator designed to measure market momentum by contrasting recent price movements with a longer-term historical perspective. It helps traders detect potential trend reversals and assess the strength of ongoing trends.
The formula for AO is as follows:
AO = SMA5(Median Price) − SMA34(Median Price)
where:
Median Price = (High + Low) / 2
SMA5 = 5-period Simple Moving Average of the Median Price
SMA 34 = 34-period Simple Moving Average of the Median Price
The Acceleration/Deceleration (AC) Indicator, introduced by Bill Williams, measures the rate of change in market momentum. It highlights shifts in the driving force of price movements and helps traders spot early signs of trend changes. The AC Indicator is particularly useful for identifying whether the current momentum is accelerating or decelerating, which can indicate potential reversals or continuations. For AC calculation we shall use the AO calculated above is the following formula:
AC = AO − SMA5(AO), where SMA5(AO)is the 5-period Simple Moving Average of the Awesome Oscillator
When the AC is above the zero line and rising, it suggests accelerating upward momentum.
When the AC is below the zero line and falling, it indicates accelerating downward momentum.
When the AC is below zero line and rising it suggests the decelerating the downtrend momentum. When AC is above the zero line and falling, it suggests the decelerating the uptrend momentum.
Now we can explain which AC signal types are used in this strategy. The first type of long signal is when AC value is below zero line. In this cases we need to see three rising bars on the histogram in a row after the falling one. The second type of signals occurs above the zero line. There we need only two rising AC bars in a row after the falling one to create the signal. The signal bar is the last green bar in this sequence. The strategy places the buy stop order one tick above the candle's high, which corresponds to the signal bar on AC indicator.
After that we can have the following scenarios:
Price hit the order on the next candle in this case strategy opened long with this price.
Price doesn't hit the order price, the next candle set lower high. If current AC bar is increasing buy stop order changes by the script to the high of this new bar plus one tick. This procedure repeats until price finally hit buy order or current AC bar become decreasing. In the second case buy order cancelled and strategy wait for the next AC signal.
If long trades are initiated, the strategy continues utilizing subsequent signals until the total number of trades reaches a maximum of 5. All open trades are closed when the trend shifts to a downtrend, as determined by the combination of the Alligator and Fractals described earlier.
Why we use AC signals? If currently strategy algorithm considers the high probability of the short-term uptrend with the Alligator and Fractals combination pointed out above and the long-term trend is also suggested by the EMA filter as bullish. Rising AC bars after period of falling AC bars indicates the high probability of local pull back end and there is a high chance to open long trade in the direction of the most likely main uptrend. The numbers of rising bars are different for the different AC values (below or above zero line). This is needed because if AC below zero line the local downtrend is likely to be stronger and needs more rising bars to confirm that it has been changed than if AC is above zero.
Why strategy use only 10% per signal? Sometimes we can see the false signals which appears on sideways. Not risking that much script use only 10% per signal. If the first long trade has been open and price continue going up and our trend approximation by Alligator and Fractals is uptrend, strategy add another one 10% of capital to every next AC signal while number of active trades no more than 5. This capital allocation allows to take part in long trades when current uptrend is likely to be strong and use only 10% of capital when there is a high probability of sideways.
Backtest Results
Operating window: Date range of backtests is 2023.01.01 - 2024.11.01. It is chosen to let the strategy to close all opened positions.
Commission and Slippage: Includes a standard Binance commission of 0.1% and accounts for possible slippage over 5 ticks.
Initial capital: 10000 USDT
Percent of capital used in every trade: 10%
Maximum Single Position Loss: -5.15%
Maximum Single Profit: +24.57%
Net Profit: +2108.85 USDT (+21.09%)
Total Trades: 111 (36.94% win rate)
Profit Factor: 2.391
Maximum Accumulated Loss: 367.61 USDT (-2.97%)
Average Profit per Trade: 19.00 USDT (+1.78%)
Average Trade Duration: 75 hours
How to Use
Add the script to favorites for easy access.
Apply to the desired timeframe and chart (optimal performance observed on 3h BTC/USDT).
Configure settings using the dropdown choice list in the built-in menu.
Set up alerts to automate strategy positions through web hook with the text: {{strategy.order.alert_message}}
Disclaimer:
Educational and informational tool reflecting Skyrex commitment to informed trading. Past performance does not guarantee future results. Test strategies in a simulated environment before live implementation
These results are obtained with realistic parameters representing trading conditions observed at major exchanges such as Binance and with realistic trading portfolio usage parameters.
Alligator + MA Trend Catcher [TradeDots]The "Alligator + MA Trend Catcher" is a trading strategy that integrates the William Alligator indicator with a Moving Average (MA) to establish robust entry and exit conditions, optimized for capturing trends.
HOW IT WORKS
This strategy combines the traditional William Alligator set up with an additional Moving Average indicator for enhanced trend confirmation, creating a user-friendly backtesting tool for traders who prefer the Alligator method.
The original Alligator strategy can frequently present fluctuations, even in well-established trends, leading to potentially premature exits. To mitigate this, we incorporate a Moving Average as a secondary confirmation measure to ensure the market trend has indeed shifted.
Here’s the operational flow for long orders:
Entry Signal: When the price rises above the Moving Average, it confirms a bullish market state. Enter if Alligator spread in an upward direction. The trade remains active even if the Alligator indicator suggests a trend reversal.
Exit Signal: The position is closed when the price falls below the Moving Average, and the Alligator spreads in the downward direction. This setup helps traders to maintain positions through the entirety of the trend for maximum gain.
APPLICATION
This strategy is tailored for assets with significant, well-defined trends, such as Bitcoin and Ethereum, which are known for their high volatility and substantial price movements.
This strategy offers a low win-rate but high reward configuration, making asset selection critical for long-term profitability. If you choose assets that lack strong price momentum, there's a high chance that this strategy may not be effective.
For traders seeking to maximize gains from large trends without exiting prematurely, this strategy provides an aggressive yet controlled approach to riding out substantial market waves.
DEFAULT SETUP
Commission: 0.01%
Initial Capital: $10,000
Equity per Trade: 80%
RISK DISCLAIMER
Trading entails substantial risk, and most day traders incur losses. All content, tools, scripts, articles, and education provided by TradeDots serve purely informational and educational purposes. Past performances are not definitive predictors of future results.
