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https://www.forextime.com/education/cfd-trading
Trading Tactics Based on Digital Indicators
Below are two interesting strategies that show quite good results. However, it would be better if you, the readers of this blog, would test them and share your opinion in the comments.
Digital Filter
This tactic is based on the smoothed price filter indicator. Its formula includes 4 of those described above digital filters FATL, SATL, RFTL, RSTL. We will also use the traditional familiar "Bollinger Bands" indicator. The optimal timeframe I will call H1 hour interval, trading on the currency pair EUR/USD. The advantage of this indicator is that it allows to develop different trading strategies depending on the filtering type selected.
Reference. You can download the Digital filter template by following this link. Once its archive is downloaded, you need to unpack it. Then choose menu "File - Open Data Folder" in MT4. In the opened window find the folder "Templates", where we move the template. The indicator should be copied into the "MQL4 - Indicators" folder.
Trading on this strategy will be carried out by the continuing trend after the Digital filter line goes out of the "Bollinger Bands" channel.
Digital filter settings:
TimeFrame = current;
FilterType = 2. This is the parameter for choosing the type of filtering, of which there are 4 types, as I have already mentioned above. For example, if you set it to 0, you will see that the indicator takes the form without any additional levels or channels. At value 1, the indicator becomes smoother and slower. A chart at value 2 is similar to a value of 0, but it is faster, less smooth and a display of Bollinger Bands appears. At value 3 the indicator becomes very fast and noisy, without channels;
Price = 0. Indicates calculation by close price (Close);
Lenght = 0. Smoothing period of the curve. In this case curve is very fast. If you set a longer period, the curve will be smoother, but the lag will appear;
Phase = 0.0. This parameter has almost no effect on the display of the indicator, therefore it can be ignored. Why it is needed is up to the developers;
LenghtForBands = 52. Period of the Bollinger Bands indicator;
Interpolate = true. Another non-principled parameter, which we leave by default.
A long position is opened when the Digital Filter leaves the upper Bollinger Band Line. As soon as the crossover occurs, we open a trade on the candle after the signal one. Stop Loss is set at 15 pips. As soon as the target profit is 10 pips, we fix 50% of the position, and cover the remaining 50% with a trailing stop loss of approximately 10 pips.
Translated with www.DeepL.com/Translator (free version)