Good day, dear readers of ForTrader.org. Today I would like to analyze with you one of the most famous among traders Deep Profit Labs strategy. This system in circles traders It is called a channel strategy, because we will be trading inside the price channel. While searching for information on this strategy, I came across only foreign resources where the strategy was mentioned only in passing, and I came across it only on one Russian-language website. But in view of the poor presentation of this system, I decided to analyze it in more detail with you. Everyone can share his experience in the comments, since I have encountered many modifications and interpretations of signals from this system, so I describe how I personally would use it.
- Currency pair - any
- Timeframe - M15-H4, recommended - H1.
- Trading hours - 24 hours a day
- Type of strategy: channel, indicator
Installing the Deep Profit Labs strategy
The Deep Profit Labs strategy is installed, like all systems, in a standard way. The desktop of the terminal should look something like this:
The Deep Profit Labs strategy has eight indicators that influence the decision to enter a position, as well as several informers. Given that the files have the same name, while the names of the indicators on your terminal desktop look completely different, I will describe each of them by the visual name on your terminal desktop, not by the name of the file (indicator).
- Tma Bands (Price border) - this indicator draws a channel with solid and dashed black lines above and below the price. The indicator is based on the ATR indicator with a period of 110.
- Fibo level - the indicator is displayed on the terminal screen as green dotted lines with the inscription Resistens. This indicator draws important support and resistance, pivot levels. With its help we can set our goals and stop losses.
- Candle Shadow - the indicator is displayed as bars below and above the price in black and white. It is the usual modification of moving average with a graphical change. In the settings you can specify the sliding period, by default it is 10.
- Arrow Bands - author's indicator, displayed in the form of arrows up and down. It is a signal indicator. The code is closed, so on the basis of what indicator it was created, I can not say. The only parameter Lengt is understandable when setting it visually. This parameter can be optimized for yourself, the smaller the value, the more often there is a signal (but also more noise) and vice versa.
- Super trend - the indicator is displayed as a red and white histogram in the first additional window. The author of the strategy has closed the settings of the indicator, so the setting of parameters is not available to us. The indicator acts as a filter.
- Laguerre indicator is an oscillator developed based on the price movement that determines the weighted trend line. The main difference of the Laguerre indicator is its construction based on historical data without the use of other indicators in the algorithm. – parameter of Laguerre indicator line smoothing. CountBars - the number of bars used to calculate the indicator readings. The more this parameter is, the more accurate Laguerre readings are.
- Bar Bands - author's indicator, located in the second additional window. It is displayed in the form of bars of red and white color. The settings of this indicator could not be found. It acts as a filter.
Signals to open a buy position according to Deep Profit Labs strategy
We enter the buy when these conditions are met at the same time:
- The price must be near the lower boundary of the price channel (allowed from both the dotted line and the solid line).
- The Arrow Bands indicator draws a green arrow upwards.
- The price should either be near levels of support (draws an indicator Fibo level), or build on it (stronger signal).
- The Candle Shadow indicator bar should be colored white (the indicator is overdrawing, and if you see a strong signal, you can ignore the indicator).
- The Laguerre indicator should break the level of 0.15 from the bottom to the top.
- The histogram of the Super trend indicator should be white.
- The Bar Bands indicator bar should be colored white.
Some indicators are overdrawing, so enter only on the closed bar.
Signals to open a sell position according to Deep Profit Labs strategy
The price must be near the upper boundary of the price channel (it is allowed to be from the dotted line as well as from the solid line).
- The Arrow Bands indicator draws a purple down arrow.
- The price should be either near the support level (drawn by the Fibo level indicator), or pushing away from it (a stronger signal).
- The Candle Shadow indicator bar should be colored black (the indicator redraws, and if you see a strong signal, you can ignore the indicator).
- The Laguerre indicator should break the level of 0.85 from the top down.
- The histogram of the Super trend indicator should be red.
- The Bar Bands indicator bar should be colored red.
- Some indicators are overdrawing, so enter only on the closed bar.
Setting stop orders, exiting a position
The Deep Profit Labs strategy has several options for placing stop orders, as well as options for exiting a position (your profit).The first way, it is a classic - put stop losses on the local minimums and maximums. For this TS, this is a less appropriate way to place a stop order, since when trading in the channel, you catch the beginning of the trend movement in the opposite direction, being already on top of the end of the current trend (counter-trend strategy - we catch reversals, not enter the main trend). The second way is to place a stop loss 20 pips away from the closest boundary of the channel from which we are moving away. This method is universal, but sometimes this distance is not enough, and stops are pulled off by price. You can also place stop orders at support and resistance levels. In general, everyone will choose a convenient way to set stop orders. I recommend to leave a position when there is a opposite signal, in this system, it helps to take the maximum out of the market.
Like all the classics of stock trading, I recommend not to exceed the risk per position of more than 3%. Strict observance of all trading rules of the system will allow you to work according to this principle: "Maximum profits, minimum losses". If for some reason you are not familiar with Manimanagement and do not know how to correctly calculate the lot, I advise to read training articles on our website. And remember, money management is the 50% key to your success, no matter what system you trade with.
Author's personal opinion
Deep Profit Labs strategy interested me a long time ago because it allows to catch the trend at its base, the lag is almost minimal. Also, judging by the reviews of my colleagues, I can confidently give an "A" to the author of the strategy because all the indicators are well chosen and complement each other. The system clearly describes the rules for entry and exit, setting stop orders, which is a very important argument for this system. The clarity of all of the rules will help both beginners and professionals to cope with the system. Thank you for reading to the end, and good luck with the trend, gentlemen traders)