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Buyer/Seller indicator trade idea and Back Test Results

Writer's picture: JohnQJohnQ

Updated: Jan 25

As many of you are aware, my current work commitments have kept me occupied, preventing me from trading during the New York session. Consequently, I have decided to develop an automated strategy utilizing the Buyer/Seller indicator to execute trades on my behalf. Please note that as of January 31, 2025, the Buyer/Seller bar is included in the P-Zone indicator, so if you have already purchased the P-Zone indicator, you will have access to it. The strategy is still being developed and currently relies solely on the Buyer/Seller indicator's long and short signals. There is no additional logic, such as ensuring a long signal is above the EMA or within a P-zone demand zone. Keeping it simple avoids complicating results and potential curve fitting. As shown below, the results are promising.


Below is the current trade setup for the Buyer/Seller trade strategy.

  • All trades are done during the New York session (8:30 AM CST - 3:00 PM CST).

  • The Buyer/Seller bars are determined at the conclusion of the bar close, meaning all transactions are executed at the end of the bar close period (Calculate on Bar Close).

  • When a signal is generated from the Buyer/Seller bar the following things happen:

    • For a buy bar, the strategy places a buy stop limit order one tick above the high of the trigger bar.

      • If the buy stop limit order is not hit before the price breaks the low of the bar, then the order is cancelled.

      • If the buy stop limit is triggered, the strategy places a stop and a target order. The Stop order is set at one tick below the bar.

      • The strategy has an option to trail the stop as the trade occurs. If the trial stop is selected, the stop will move to the low of the next up bar (open > close).  If the next bar is down bar (close < open), the stop order does not move.

      • The Target order has a 1:1 risk-reward ratio. So, if the stop is 10 ticks, the target is set to 10 ticks from entry.

      • The strategy will ignore short signals during a long trade.

 

  • For a sell bar, the strategy places a sell stop limit order one tick below the low of the trigger bar.

    • If the sell stop limit order is not hit before the price breaks the high of the bar, then the order is cancelled.

    • If the sell stop limit is triggered, the strategy places a sell stop and a limit target order. The sell Stop order is set at one tick above the bar.

    • The strategy has an option to trail the stop as the trade occurs. If the trial stop is selected, the stop will move to the low of the next down bar (close < open).  If the next bar is up bar (open > close), the stop order does not move.

    • The Target order has a 1:1 risk-reward ratio. So, if the stop is 10 ticks, the target is set to 10 ticks from entry.

    • The strategy will ignore long signals during a short trade.


Below are the two months of back testing statistics for a 5-minute NQ chart. Note, no tuning has been done


December 2024 - January 20, 2025 - 5 minute NQ

Summary
Summary
Analysis - Daily
Analysis - Daily
Analysis - Weekly
Analysis - Weekly
Analysis - Monthly
Analysis - Monthly

If you have purchased the P-Zone and would like a copy of the strategy to use in the Strategy Analyzer for analysis with different instruments and time frames, please contact me via email at john@johnqtrading.com. Once it is ready, I will provide you with a copy for your use. Please note that this version of the strategy is intended solely for use in the NinjaTrader Strategy Analyzer and is not executable for real-time trading.


The plan is to collect data over a period of three months, concluding at the end of February 2025. If the results are favorable, the subsequent step will involve testing the strategy with a live account.


Presented below are two examples, long and one short, illustrating the/Seller Strategy in a live market.




Long and short trade in the first 30 minutes of market open: https://youtube.com/shorts/qsWCsq6dFCk


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