Trend Identification Insurances

HTS introduced two new Trend Identification Insurances designed to bring more flexibility to the Trade Bots. There are currently 2 types of trend identification insurances; Trade Only Trending and Trade Only Sideways. These new Insurances work by allowing Trade Signals from a Trade Bot when the sideways or volatile trend matches. The insurances disallow Trade Signals if that trend is not currently present in the market.

It is important to note that these Trend Identification Insurances are going to lag by the very nature of how they work. This means that it if a market goes from sideways to volatile, it may not immediately allow/block trades following some price action in the market.

Disclaimer - The text below is just a hypothetical example of how a user may use the new trend identification insurances. We are not promoting a specific trading strategy and this is clearly a hypothetical case. It is the user's responsibility to determine their own strategies and any mention of specific strategies is merely for educational purposes. Haasonline Software is not liable for any losses due to use of any trading strategy and users of Haasonline Software's products must do their due diligence when formulating their own trading strategies.

Potential Uses

These new Trend Identification Insurances open the door to far more flexible Trade Bots. Users should do some research to figure out which Indicators work well in both a sideways market and a volatile market, then adapt their Trade Bots to dynamically start and stop trading. I will give you an example below.

E.g. Lets say that I know that the Relative Strength Index Indicator (with specific settings) works quite well during a sideways market. Lets also say that the time interval is small; say 5 minutes. If we know this strategy works well we can add the Trade Only Sideways Insurance to the RSI based Trade Bot.

Now that we have our strategy for a sideways market let us formulate a strategy that does well in Volatile markets. Supposing a moving average based Indicators works well in volatile markets and I specifically want to trade with MACD (with some specific settings), then we will want to combine the Trade Only Trending Insurance to the MA based Trade Bot. Hypothetically, if the market is currently sideways, we may wish to have a set up like this:

Bot 1 - Sideways Market Trade Bot Indicator - RSI with specific settings Insurance - Trade only sideways Position - Bought (lets just say thats how this starts).

Bot 2 - Volatility Bot at the Bought Position Indicator - MACD with specific settings Insurance - Trade only Trending Position - Bought because we don't know what the position will be when Bot 1 stops trading.

Bot 3 - Volatility Bot at the Sold Position Indicator - MACD with the same settings at Bot 2. Insurance - Trade only Trending Position - Sold because we don't know what the position will be when Bot 1 stops trading.

In our example scenario the market (as it starts out) is sideways, so our trading strategy for sideways markets will trade as it should. Once the market becomes volatile, the Trade Only Sideways insurance will eventually stop trading and the Trade Only Trending insurance will allow trading for both Bot 2 and 3. The reason why we have 2 bots for the Trade Only Trending insurance is because we don't know what the Position will be when Bot 1 stops trading. Keep in mind, this specific set up will only be good for going from a sideways market to a volatile market, but only in that direction. After the volatile market ends, the user should re-evaluate the market and change their trading configuration accordingly. While this is not a completely dynamic solution it is a step in the right direction. There are many more uses and configurations than this example case but this should give you an example of how to use these new Trend Identification Insurances.