WAMI Strategy is a trading strategy based on Fourier analysis that uses an iterative optimization process to find a trading strategy that can consistently obtain stable returns from historical market data. It combines the Exponential Moving Average (EMA), Weighted Moving Average (WMA) and Momentum Indicator (MOM) to form a composite trading indicator – WAMI. When WIS Mil* is above or below a threshold, the strategy sends a ** or sell signal.
First, the principle of strategy
The core indicator of this strategy is Wami**. It is calculated by first calculating the momentum of **, then calculating the n-day weighted moving average, and then performing two exponential moving average calculations to obtain the final Weimei**. Among them, the momentum indicator reflects the **speed of change, the WMA filters out the short-term noise, and the EMA is smooth**. The source code is as follows:
wami: ema(ema(ema2((close-ref(close,1)),n1),n2),n2);
mawami:ma(wami,m);
When WIM rises above the specified threshold, it means that the market is forming a trendA sell signal is generated when the decline crosses the threshold, representing the entry of a ** trend.
When the WAMI of the WAMI indicator breaks through MAWAMI upwards and generates a ** signal, it means that the market is forming a **trend;When the WAMI of the WAMI indicator breaks down to MAWAMI, a sell signal is generated, which represents the entry of the trend.
Traders can adjust the parameters and thresholds on their own based on the backtest results to achieve better strategy optimization results.
2. Advantage analysis
This strategy combines trend following and overbought and oversold judgments, and can catch the medium to long-term trend while avoiding it. Compared with ordinary moving flat strategies, WS improves the quality and stability of trading signals.
The main advantages are:
Fourier optimization improves parameter configurability.
Dual EMA filtering reduces false signals.
The combination of WMA+MOM improves sensitivity.
It can be long or short, and it is adaptable.
3. Risk analysis
There are also some risks associated with this strategy:
The optimization process is complex, and improper settings may fail.
Significant reduction in the rate of the market.
Performance is highly dependent on parameter settings.
There is no way to switch quickly when the trend reverses.
These risks can be mitigated by adjusting the combination of parameters, setting a stop loss, and reasonably expecting a return. When the market enters violently**, it should be suspended or reduced**.
Fourth, optimize the direction
The strategy can also be optimized in the following aspects:
Test more combinations of parameters to find the optimal one.
Add auxiliary conditions such as volume filtering.
Add take-profit and stop-loss mechanisms.
Combine with other indicators to determine large-level trends.
Dynamically adjust parameters to adapt to market conditions.
5. Summary
To sum up, the WIS ** strategy is a recommended medium to long-term trend following strategy. It forms high-quality trading signals through in-depth analysis of momentum changes. Under the premise of parameter optimization and risk control in place, the strategy can obtain stable returns.