3MA + Laguerre RSI + ADX

The 3MA + Laguerre RSI + ADX [Pt] tool is a comprehensive scalping strategy designed to identify high-probability trend-following entries by combining moving average alignment with momentum and trend strength filters.

Usage

The strategy is primarily optimized for low-timeframe scalping (such as the 5-minute chart) and uses a three-layer confirmation process:

• Trend Identification: The script checks for a "Moving Average Ribbon" alignment. For a long signal, the Fast EMA must be above the Slow EMA, and both must be above the 200-period SMA.
• Momentum Confirmation: The Laguerre RSI must cross specific thresholds (e.g., above 80 for longs or below 20 for shorts) to ensure strong price momentum.
• Trend Strength: The Average Directional Index (ADX) must be above 20 to confirm that the current trend has sufficient strength to sustain a scalp.

Entry and Exit Examples:

• Long Entry: Occurs when EMA 16 > EMA 48 > SMA 200, Laguerre RSI is above 80, and ADX is above 20.
• Short Entry: Occurs when EMA 16 < EMA 48 < SMA 200, Laguerre RSI is below 20, and ADX is above 20.
• Exit: Positions are closed when the Fast EMA crosses the Slow EMA in the opposite direction, or when optional fixed Stop Loss/Profit Targets are triggered.

Details

This script integrates several technical concepts into a single automated strategy. It calculates the Laguerre RSI using a four-element filter bank (L0-L3) and a damping factor (gamma), which provides a smoother alternative to traditional RSI with less lag. The ADX component ensures that the strategy avoids "choppy" or sideways markets where moving average crossovers often fail. The strategy also includes robust backtesting features such as specific trading sessions, reinvestment logic, and margin requirements.

Settings

Backtesting window

• Start/Finish Year/Month/Day: Defines the specific date range for the strategy backtest.

Trading Session

• Use Entry Session Window: When enabled, signals are only generated during the specified time range.
• Entry Session: Defines the active hours for signal generation (e.g., New York session).

Trading Options

• Margin Requirement / Leverage: Sets the leverage factor for position sizing.
• % of initial capital per trade: Determines the base size of each position.
• Reinvest profit: If enabled, cumulative profits are added to the next trade's position size.
• Close EOD: Automatically closes all open positions at the end of the trading window.

Moving Average Ribbon

• Fast EMA Length: Period for the fastest moving average (default 16).
• Slow EMA Length: Period for the secondary moving average (default 48).
• Slow SMA Length: Period for the long-term trend filter (default 200).

Laguerre RSI

• Alpha: The damping factor for the Laguerre calculation.
• Long/Short Thresholds: The RSI levels required to trigger a trade.

ADX

• ADX Smoothing/DI Length: Parameters for calculating trend strength.

Stop Loss / Profit Target

• Use Fixed SL / PT: Toggles between indicator-based exits and fixed tick-based exits.
• Stop loss/Profit target in ticks: Specific price distances for exit orders.

FAQ

How do I use the moving average ribbon?

The ribbon serves as your primary trend filter. Ensure all three averages are stacked in the correct order before looking for momentum entries.

Can I use this for swing trading?

While designed for 5-minute scalping, the parameters are fully configurable, allowing you to adapt the lengths for higher timeframes.

How can I access 3MA + Laguerre RSI + ADX [Pt]?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.