Investing & Trading

Onset Trend Strategy

By Samantha Baltodano


TL;DR:

The Onset Trend strategy is a zero-lag trend analyzing oscillator that uses the Super Smoother Filter and the Roofing Filter to detect trends in the market and generate buy and sell signals by crossing above or below zero. It also uses the quotient transform and the K coefficient to ensure more precise trend detection.


What Is the Onset Trend Strategy?

The Onset Trend strategy is based on the Onset Trend Detector study, a zero-lag trend analyzing oscillator. This oscillator incorporates two filters, the Super Smoother Filter and the Roofing Filter, both developed by John F. Ehlers. 


Data derived from these two filters is processed by an automatic gain control algorithm and then subjected to the quotient transform. The quotient transform, controlled by the K coefficient, collapses small oscillator values while keeping higher values high.


The strategy uses the oscillator twice, with different values of K coefficient. This ensures more precise trend detection. 


Suggested values for the coefficient are 0.8 and 0.4, though these can be customized based on your trading needs. 


Trade Signals

The buy signal is given when the first oscillator crosses above zero (which corresponds to uptrend detection) and a sell signal is given when the second oscillator crosses below zero (which signifies that the uptrend is over).


Test The Onset Trend Detector

Great news! 


You can back test this exact strategy on historical data for any of your favorite symbols using TradingView. 


This strategy has already been built and all you have to do is log in and take it for a spin. You can access this indicator here.


If you’re new to back testing and to TradingView, don’t worry. I created a step-by-step guide you can follow to begin testing the Onset Trend Detector.


Summary

  • The Onset Trend strategy is a zero-lag trend analyzing oscillator that uses the Super Smoother Filter and the Roofing Filter to detect trends in the market.
  • It uses the quotient transform and the K coefficient to ensure more precise trend detection.
  • It generates buy signals when the first oscillator crosses above zero, and sell signals when the second oscillator crosses below zero.


Onset Trend is just one of many strategies that Archaide automates. For a full list of strategies and studies available click here.


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