Triple EMA + QQE Trend Following Strategy

The Triple EMA + QQE Trend Following Strategy indicator is a comprehensive trading tool designed to identify high-probability trend reversals and momentum shifts by combining multiple smoothing techniques.

Usage

The strategy utilizes a combination of moving average alignment and momentum oscillators to generate entry signals. Users can monitor the following conditions for potential trades:

• Long Entry: Occurs when the price is above the 20-period TEMA, the 20-period TEMA is above the 40-period TEMA, the 40-period TEMA is rising, and the QQE RSI MA crosses over the slow trailing line.
• Short Entry: Occurs when the price is below the 20-period TEMA, the 20-period TEMA is below the 40-period TEMA, the 40-period TEMA is falling, and the QQE RSI MA crosses under the slow trailing line.
• Trailing Stop: The script manages risk by employing a pip-based trailing stop loss, allowing the strategy to capture extended trends while protecting equity.
• Time Filtering: The script includes a filter that prevents entries on Mondays, aiming to avoid the often volatile or indecisive price action at the start of the trading week.

Details

The script integrates two primary technical components:

1. Triple Exponential Moving Average (TEMA): This indicator provides a smoother and faster alternative to standard EMAs. By applying the EMA formula three times and using a specific calculation method ($3ema1 - 3ema2 + ema3$), it significantly reduces lag, allowing for quicker responses to trend changes.
2. Qualitative Quantitative Estimation (QQE): This is an enhanced version of the Relative Strength Index (RSI). It applies additional smoothing (5-period and 27-period EMAs) to a standard RSI and calculates a trailing line using a factor-based volatility adjustment. This results in a less "noisy" signal than traditional oscillators.

Settings

QQE

• RSI Length: Determines the lookback period for the base RSI calculation.
• RSI Smoothing Period: Sets the length for the initial EMA smoothing of the RSI.
• QQE Factor: A multiplier applied to the volatility-adjusted trailing line.

TEMA

• TEMA Source: The price source (e.g., Close, Open) used for TEMA calculations.
• TEMA #1 Length: The period for the faster TEMA (default is 20).
• TEMA #2 Length: The period for the slower TEMA (default is 40).

Strategy

• Stop Loss (pip): Sets the distance for the trailing stop loss in pips.

FAQ

How do I use the Triple EMA + QQE Trend Following Strategy?

Wait for the TEMA lines to align (fast above slow for longs, below for shorts) while the price is trending, then enter when the QQE RSI MA crosses the trailing line.

Can I change the sensitivity of the signals?

Yes, you can adjust the TEMA lengths for trend sensitivity or the QQE Factor to make the oscillator signals more or less reactive to price volatility.

How can I access this indicator?

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