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ElliotV5HOMod3 - Strategy Analysis

I. Strategy Overview​

ElliotV5HOMod3 is an Elliott Wave-based trend-following strategy refined for the Freqtrade framework. Its core design: "enter on pullbacks, exit with discipline." The strategy waits for price to retreat to reasonable levels in confirmed uptrends, then enters with multi-layer risk protection.

Core Philosophy​

"Wait for the discount, then sell when risen." Not chasing rallies, not panic-selling dumps. Key principles:

  • Trend confirmation first
  • Pullback entries for better risk/reward
  • Multi-indicator filtering to reduce false signals
  • Dynamic risk management adapting to market conditions

II. Technical Indicators​

EWO (Core)​

  • Formula: (EMA(50) - EMA(200)) / Close × 100
  • ewo_high: 3.34 (strong uptrend signal)
  • ewo_low: -17.457 (extreme oversold signal)

EMA System​

  • Buy EMA: 17-period, offset 0.978
  • Sell EMA: 39-period, offset 1.011

RSI​

  • Period: 14
  • Buy threshold: 60 (RSI < 60 required)

III. Entry Signals​

Condition 1: Trend Pullback (Primary)​

close < ma_buy × 0.978 AND EWO > 3.34 AND RSI < 60 AND volume > 0

Condition 2: Extreme Oversold​

close < ma_buy × 0.978 AND EWO < -17.457 AND volume > 0

No RSI filter in Condition 2.

IV. Exit Signals​

Basic Exit​

close > ma_sell × 1.011 AND volume > 0

Note: use_sell_signal = False — exits primarily via ROI and stop-loss.

ROI​

minimal_roi = {"0": 0.07}  # 7% immediate target

Trailing Stop​

  • Activates at 3% profit
  • 0.5% below highest price

Custom Stop-Loss​

profit > 3%:  stop at 1%
profit 1.8-3%: stop at 0.5%
else:           -99% (let fixed stop handle)

V. Risk Management​

  • Fixed Stop-Loss: -6% (tightest among ElliotV5 variants)
  • Minimal ROI: 7% (single aggressive target)
  • Trailing: Activates 3%, tracks 0.5% below peak
  • Custom Stop-Loss: Dynamically tightens as profit grows

VI. Parameter Optimization Space​

ParameterDefaultRange
base_nb_candles_buy175-80
low_offset0.9780.9-0.99
ewo_high3.342.0-12.0
ewo_low-17.457-20.0--8.0
rsi_buy6030-70
base_nb_candles_sell395-80
high_offset1.0110.99-1.1

VII. Strategy Advantages​

  • Tightest stop-loss (-6%) among V5 variants — better capital protection
  • 7% single ROI target — clear profit goal
  • Custom stop-loss dynamically tightens on profitable trades
  • Multi-indicator confirmation reduces false signals

VIII. Strategy Limitations​

  • Single ROI target (not tiered) — less adaptive to varying market speeds
  • May exit too early in slow but steady trends
  • 1-hour informative timeframe not fully utilized

IX. Summary​

ElliotV5HOMod3 is the most capital-preservation focused variant in the V5 series. Its -6% stop-loss and 7% ROI target provide tighter control compared to siblings. Best suited for traders prioritizing capital protection over maximizing trend rides.

Disclaimer: For learning reference only, not investment advice.