diff --git a/README.md b/README.md index e3c2b5d..b4df6de 100644 --- a/README.md +++ b/README.md @@ -75,6 +75,70 @@ Impact: +10% total P&L expected (better hit rates in all conditions) **Why?** If Drift orders don't fill (low liquidity, network issues), Position Manager acts as backup. Both write to the same PostgreSQL database for complete trade history. +## 📈 The Money Line v8 Indicator + +### How It Works (Simple Explanation) + +The **Money Line** is a dynamic support/resistance indicator that adapts to market volatility. Think of it as a "safety zone" - price above = bullish, price below = bearish. + +**The Core Concept:** +- **Green line** = Bulls in control, momentum up → Go LONG +- **Red line** = Bears in control, momentum down → Go SHORT +- **Line flip** = Power shift detected → Enter trade + +### What Creates the Line + +**1. ATR (Average True Range)** +- Measures how much the market moves on average +- Volatile markets → wider bands, calm markets → tighter bands +- Think: "How much wiggle room does price need?" + +**2. The Multiplier** +- ATR × Multiplier = Distance from price to line +- v8 uses 3.8x for 5min charts (stickier than previous versions) +- Higher multiplier = line changes color less often + +**3. HalfTrend Algorithm** +- Calculates upper band (resistance) and lower band (support) +- Price crosses above upper band → line turns GREEN (bullish) +- Price crosses below lower band → line turns RED (bearish) +- Line "sticks" to its color until price STRONGLY breaks the opposite band + +### v8 Improvements (Anti-Whipsaw Protection) + +**Flip Threshold (0.8%)** +- Price must move 0.8% beyond the line before it changes color +- Filters tiny bounces that don't mean anything +- Example: Line at $100 → price must hit $100.80 to flip bullish + +**Entry Buffer (0.2 ATR)** +- Confirms the breakout is real, not just a wick +- Waits for price to close beyond line + buffer zone +- Prevents fake signals from sudden spikes + +**Stickier Bands** +- Increased multipliers make the line "lazier" to flip +- Follows major trends, ignores minor corrections + +### In Simple Terms + +*"It's like a traffic light for trading:* +- *Green = Go long (buy)* +- *Red = Go short (sell)* +- *The line doesn't change until there's a REAL trend shift, filtering out fake moves.* + +*It adapts to volatility automatically - in crazy markets it needs bigger moves to flip, in calm markets it's more sensitive. This keeps you trading WITH the flow, not against it."* + +**Technical Name:** Modified HalfTrend Supertrend with ATR-based adaptive bands and flip threshold confirmation +**Street Name:** The Money Line 💰 + +### Indicator Versions +- **v6:** Filtered mode with ADX/volume/RSI confirmations (conservative) +- **v7:** Pure line flips (too noisy, deprecated) +- **v8:** Sticky trend with flip threshold + momentum confirmation (current) + +All versions available in `workflows/trading/` directory. + ## Quick Start (Docker) ### 1. Prerequisites