Consolidation Zones and utbot trading system

In this blog post, we’re diving into a surprisingly powerful trading strategy that you can use on TradingView. This strategy can be applied by traders of all skill levels, from beginners to professionals, and works on various markets including stocks, cryptocurrencies, indices, commodities, and Forex. The best part? It utilizes two free indicators available on TradingView. Let’s get started!

Setting Up the Strategy

Step 1: Add the UTBot Alerts Indicator

1. Go to the Indicators tab on TradingView.
2. Type in “UTBot Alerts” by Quant Nomad.
3. Add this indicator to your chart. This AI-generated algorithm provides accurate buy and sell signals.

Step 2: Add the Linear Regression Candles Indicator

1. Go to the Indicators tab again.
2. Type in “Linear Regression Candles” by Ugo RVU.
3. Add this indicator to your chart. This helps create a smooth version of your chart to reduce market noise.

Step 3: Adjust Chart and Indicator Settings

1. Remove Original Candles: Click the eye icon next to your product name at the top left of your chart to remove the original candles.
2. UTBot Alerts Settings:
   • Go to Inputs.
   • Change the Key Value to 2.
   • Set the ATR Period to 1.
3. Linear Regression Candles Settings:
   • Go to Inputs.
   • Change Signal Smoothing to 7.
   • Change Length to 11.
   • Go to Style and change the thickness of the plot to the third option for better visualization.

Trading Rules

Long Positions

Entry Rules:

1. The UTBot Alerts indicator signals a buy banner.
2. Linear Regression Candles are above the white plot line.

Exit Rules:

• Set your stop loss at the recent swing low.
• Close the position when the Linear Regression Candles turn red.

Example:

• A buy signal appears, and the candles are above the white plot line. Enter a long position.
• Set the stop loss below the recent swing low.
• Exit the trade when the candles turn red.

Short Positions

Entry Rules:

1. The UTBot Alerts indicator signals a sell banner.
2. Linear Regression Candles are below the white plot line.

Exit Rules:

• Set your stop loss at the recent swing high.
• Close the position when the Linear Regression Candles turn green.

Example:

• A sell signal appears, and the candles are below the white plot line. Enter a short position.
• Set the stop loss above the recent swing high.
• Exit the trade when the candles turn green.

Improving the Strategy

Avoiding Consolidation Zones

One of the main reasons for losses in this strategy is market consolidation. To avoid trading during these times, follow these steps:

1. Add the Consolidation Zones Indicator:
   • Go to Indicators and type “Consolidation Zones” by LonesomeTheBlue.
   • Add this indicator to your chart.
2. Adjust Settings:
   • Go to the settings of the Consolidation Zones indicator.
   • Change the Zone color to white for better visibility.

Trading During High Volume

• It is recommended to use this strategy only during open market hours to ensure high trading volume and better signal accuracy.

Conclusion

This TradingView strategy, utilizing the UTBot Alerts and Linear Regression Candles indicators, has proven to be highly profitable, boasting gains of 7800%. By avoiding trades during consolidation periods and trading during high-volume times, you can improve the win rate and effectiveness of this strategy. If you have any questions or need further clarification, feel free to leave a comment below. Happy trading!

Author: Simeon Bala

An Information technology (IT) professional who is passionate about technology and building Inspiring the company’s people to love development, innovations, and client support through technology. With expertise in Quality/Process improvement and management, Risk Management. An outstanding customer service and management skills in resolving technical issues and educating end-users. An excellent team player making significant contributions to the team, and individual success, and mentoring. Background also includes experience with Virtualization, Cyber security and vulnerability assessment, Business intelligence, Search Engine Optimization, brand promotion, copywriting, strategic digital and social media marketing, computer networking, and software testing. Also keen about the financial, stock, and crypto market. With knowledge of technical analysis, value investing, and keep improving myself in all finance market spaces. Pioneer of the following platforms were I research and write on relevant topics. 1. https://publicopinion.org.ng 2. https://getdeals.com.ng 3. https://tradea.com.ng 4. https://9jaoncloud.com.ng Simeon Bala is an excellent problem solver with strong communication and interpersonal skills.