This blog post discusses the implementation of the Bars Since exit in the Lizard SuperTrend trading strategy, emphasizing its role as a cooldown timer to prevent overtrading and improve decision-making in trading.
In this fifth installment of the Lizard SuperTrend strategy series, we delve into the implementation of the Bars Since exit feature. This addition serves as a crucial cooldown mechanism for traders, allowing them to avoid hasty decisions after exiting trades.
Understanding Bars Since Exit
The Bars Since exit can be likened to a cooldown timer in video games, where players must wait before using a power-up again. In trading, this concept translates to giving oneself a pause before re-entering the market after a trade has been closed. This strategy is designed to help traders avoid the pitfalls of overtrading and to encourage more thoughtful decision-making.
Setting Up the Bars Since Exit
To begin, we need to establish a Boolean variable for the Bars Since exit, which we will set to true. This step is essential for organizing our strategy and ensuring clarity in our coding process. The next task is to locate the Bars Since exit function within the Quagensia platform, akin to finding the right tool in a toolbox.
Creating the Exit Rule
Once we have identified the Bars Since exit function, we can create a rule that dictates our trading behavior. For instance, we might decide that after exiting a trade, we will wait for 10 candles before considering another entry. This rule acts as a self-imposed timeout, allowing traders to count to ten before making their next move.
Implementing the Function
To implement this function, we will set it equal to -1 and establish a condition that requires it to be greater than a specified value. This setup is straightforward and integrates seamlessly into the main logic of our trading strategy. After making these adjustments, we save the strategy and prepare to test it.
Testing the Strategy
To evaluate the effectiveness of the Bars Since exit, we will utilize the market replay feature to simulate trading conditions. This testing phase is crucial as it allows us to observe how the strategy performs in real-time scenarios. The primary goal here is to ensure that the strategy does not prompt immediate re-entry into the market after a trade has been closed.
Observing Results
During testing, we can adjust the cooldown period to see how it impacts trading behavior. For example, setting the cooldown to 10 bars demonstrates that the strategy waits for the specified number of bars before executing a trade. This delay helps to ensure that the market conditions are more favorable before re-entering.
Conclusion
In summary, the addition of the Bars Since exit to the Lizard SuperTrend strategy provides a valuable tool for traders. By implementing a cooldown period, traders can avoid the temptation to overtrade and instead wait for optimal conditions before making their next move. This approach not only enhances the overall trading strategy but also promotes a more disciplined trading mindset.
Thank you for joining me in this brief overview of the Bars Since exit. I appreciate your engagement and look forward to sharing more insights in future videos. Stay blessed and take care!
