Displaced Donchian Decycler | Trend Breakout Strategy with MFI
Overview
Displaced Donchian Decycler (DDDS) is a trend-following breakout strategy that combines a delayed Donchian channel with a cycle-removing trend filter, a money-flow check, and volatility-based risk management. It aims to enter when price breaks out of an older range, and only when trend and volume flow agree.
How it works
Displaced Donchian trigger: The highest high and lowest low are measured from a window that sits well in the past (bars 31 to 36 back by default), not the most recent bars. Price breaking above that old high flips the state bullish; breaking below the old low flips it bearish. Using an older window means the strategy reacts to a break of a mature range instead of short-term noise.
Decycler trend filter: A two-pole Ehlers-style decycler removes short cycles from price and leaves a smooth trend line. Longs require price above the line and the line rising. Shorts require the opposite.
Money Flow filter: A smoothed MFI must be above 50 for longs and below 50 for shorts, so breakouts need volume-weighted momentum behind them.
ATR risk management: On entry, the strategy locks in the ATR at the signal bar and sets a stop (2 ATR by default) and a take profit (3 ATR by default). A Donchian flip against an open trade closes it.
Features
Tips
Warnings
This script is for educational purposes only and is not financial advice. Do your own research and manage risk.
Displaced Donchian Decycler (DDDS) is a trend-following breakout strategy that combines a delayed Donchian channel with a cycle-removing trend filter, a money-flow check, and volatility-based risk management. It aims to enter when price breaks out of an older range, and only when trend and volume flow agree.
How it works
Displaced Donchian trigger: The highest high and lowest low are measured from a window that sits well in the past (bars 31 to 36 back by default), not the most recent bars. Price breaking above that old high flips the state bullish; breaking below the old low flips it bearish. Using an older window means the strategy reacts to a break of a mature range instead of short-term noise.
Decycler trend filter: A two-pole Ehlers-style decycler removes short cycles from price and leaves a smooth trend line. Longs require price above the line and the line rising. Shorts require the opposite.
Money Flow filter: A smoothed MFI must be above 50 for longs and below 50 for shorts, so breakouts need volume-weighted momentum behind them.
ATR risk management: On entry, the strategy locks in the ATR at the signal bar and sets a stop (2 ATR by default) and a take profit (3 ATR by default). A Donchian flip against an open trade closes it.
Features
- Trend-coloured candles and decycler line (bullish or bearish)
- Gradient fill between price and the decycler
- Flip band showing the level that would reverse the trend
- Live stop and target lines while in a trade
- Entry triangles and alerts for long and short signals
- Toggles to disable longs, shorts, the decycler filter, or the MFI filter
- Adjustable displacement window, decycler period, MFI length, and ATR multiples
Tips
- Start on higher timeframes (1H to Daily). Breakout systems tend to behave better with fewer, larger moves.
- Trending markets suit this strategy. Choppy, range-bound markets will produce whipsaws.
- Widen the displacement window for fewer, slower signals, or narrow it for more trades.
- Raise the decycler period for a smoother filter, lower it to react faster.
- If the win rate is low, try a wider stop or a lower take-profit multiple, and compare results across several symbols rather than tuning to one chart.
- Test long-only or short-only on assets with a clear directional bias.
Warnings
- Backtests are not predictions. Past results do not guarantee future performance.
- Avoid overfitting. Tuning every input to one symbol and period usually produces results that won’t hold up.
- Default sizing is aggressive. The strategy uses 100% of equity per trade. Lower this before drawing any conclusions about risk and drawdown.
- Costs matter. Commission is set to 0.05% by default and no slippage is modeled. Adjust both to match your broker and market.
This script is for educational purposes only and is not financial advice. Do your own research and manage risk.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.
Wyłączenie odpowiedzialności
Informacje i publikacje nie stanowią i nie powinny być traktowane jako porady finansowe, inwestycyjne, tradingowe ani jakiekolwiek inne rekomendacje dostarczane lub zatwierdzone przez TradingView. Więcej informacji znajduje się w Warunkach użytkowania.