Home tradingview A Beginner’s Guide To Trading Strategies On Tradingview

A Beginner’s Guide To Trading Strategies On Tradingview

TradingView is one of the most popular platforms nowadays for the analysis and execution of trading strategies. We will see what TradingView offers us and if it is good to start trading, and we will develop a trading strategy.

TradingView is a powerful and versatile platform providing traders with a wide range of tools and features to conduct technical analysis and develop trading strategies.

quantitative trading strategy

Related reading: Searching for Tradingview trading strategies? (We have plenty)

Introduction to Tradingview

TradingView is a web-based platform that allows traders to access a wide range of real-time interactive charts with numerous technical analysis tools. It offers a variety of technical trading indicators, many of which were created by the incredible community of analysts and programmers on the platform, as well as drawing tools that allow users to perform detailed market analysis.

TradingView also has mobile applications for iOS and Android devices. This allows users to access their charts and analysis anytime and from anywhere. It offers a free version with limited functionality and different subscription plans that unlock additional features and real-time data.

Is TradingView good for beginners?

TradingView is perhaps the best platform today to get started in the world of trading.

Although TradingView can be used by both beginners and more experienced traders, its intuitive interface and numerous tools make it especially useful for those who are just starting in the trading world. It’s easy to use for new traders who are learning about different indicators, trading strategies, and developing their own unique style, while also being exceptionally powerful for traders with decades of experience and their own custom scripts.

Tradingview Social Network

TradingView has an online community of traders who can interact and share ideas. Users can post and comment on trading ideas, follow other traders, and receive notifications when updates are published.

TradingView offers Instagram-like features for sharing and showcasing trading strategies. The website’s Ideas and Streams pages allow picking up tips or receiving feedback. If you visit the Ideas page, you will find charts, videos, and commentaries from other users. Community members can also participate in discussions and chat rooms.

Tradingview Social Network

How do I get the most out of TradingView?

If TradingView is your choice for developing trading strategies, then you should dedicate time to getting to know its interface, learn its tools, and above all, its limitations. For beginners to the platform, here’s a small list of things that will make your life easier during your time in front of the screen.

1. Customise Your Chart

To customise your chart, click on the settings button on the upper right-hand side.

2. Watchlists

The watchlist summarizes the markets you are interested in and actively trade. You can also list assets in a particular order.

3. Magnet Mode

Magnet mode makes drawing support/resistance, trend lines, and so on much easier and quicker. Once you enable magnet mode, any line you draw on the chart will automatically connect to the Open-High-Low-Close of the nearest candle

4. Shortcuts

The same shortcuts used to cut, copy and paste in word processing applications such as Google Docs can also be used in TradingView.

5. Save Chart Layouts

You can save your chart layout using the cloud button on the toolbar at the top. This saves you from putting all your indicators on the chart every time you go onto TradingView.

6. Multiple Timeframes on One Chart

Instead of different indicators on the same chart using the saved layouts, day traders and scalpers may also want to monitor multiple timeframes at once.

7. Make Lines Visible Only on Certain Timeframes

Suppose you draw important levels on the 4-hour timeframe but don’t want them to clutter your daily, weekly, or monthly charts. To do this, click on the object, and go to the Visibility settings. Uncheck the boxes for the timeframes you do not want the lines to appear on.

8. Use Alerts

Never miss your trading opportunity because of a distraction. Alerts can be used for price level or complex indicators conjunctions. They are easy to create and manage.

9. Customize your Toolbar

Activate that little star in your favorite tool to have it added to your personal toolbar. Drag your toolbar anywhere you want in your screen.

10. Save your Favorites Indicators

Make sure to save your most used indicators by selecting the star next to it. This means less time typing and searching the same indicators repeatedly.

11. Learn Pine Script

Once you are familiar with Tradingview and its interface, you should start learning Pine Script to customize indicators and code your strategies. It’s easy to learn, and it has a big community behind it.

What is the difference between discretionary and systematic trading?

There are many ways to approach trading, and each person must decide which identifies with them the most and suits their profile. Let’s look at the main differences!

Discretionary Trading: Discretionary trading is based on subjective decision-making by the trader. The trader uses their experience, knowledge, and personal judgment to analyze the markets and execute trades. They make decisions based on their own interpretation of information and personal judgment.

Discretionary traders have flexibility in adapting their strategy as market conditions change. Discretionary trading can be influenced by the trader’s emotions, such as fear, greed, or euphoria. Decisions can be subject to emotional biases and subjective interpretations of information.

Quantitative or Algorithmic Trading

Quantitative trading is based on the use of algorithms and mathematical models to make trading decisions.

Quantitative traders develop strategies based on predefined rules and use software or automated/semi-automated systems to execute trades. In quantitative trading, trading decisions are based on objective rules and predefined algorithms. Quantitative traders use historical data, technical indicators, and other parameters to create mathematical models that generate buy or sell signals.

Since trading decisions are based on predefined rules, quantitative trading tends to reduce the influence of emotions on trades. Decisions are made objectively and systematically.

Trading strategies in Tradinview

A trading strategy is a detailed plan that a trader follows to make buying or selling decisions on financial assets such as stocks, currencies, or cryptocurrencies. These strategies are based on data analysis, price patterns, technical indicators, and economic fundamentals to identify profitable investment opportunities.

All the aforementioned aspects can be directly performed on Tradingview. We have access to the assets, can identify patterns, and access historical data of the assets we want to analyze. We can develop a trading strategy by establishing its rules, backtesting it on the platform, and assessing its past performance.

In addition to this, there are different types of trading:

Scalping: Involves profiting from small price movements in a security. Scalpers generally hold a trading position for a very short period of time, ranging from a few seconds to a few minutes, and they aim to generate gains from small price fluctuations.

However, scalping is very hard and few make any money.

Day Trading: This is a short-term trading strategy whereby assets are bought and sold within the same trading day. Day traders aim to profit from price movements in security and typically close all of their positions by the close of the market trading day.

Swing Trading: This approach involves holding positions for a short period, usually from a few days to a few months.

How do you create a strategy on TradingView?

With all the information presented, we can begin developing a trading strategy and see how we can leverage Tradingview tools for this task.

We will utilize the concept of trend following, which involves following the market trend. Trend following is when you try to capture extended moves in the financial markets, either up or down, mostly for long-term gains. Once in a while, prices tend to keep on going (enduring), and these are the moves trend followers like. The aim is to capture most of such moves, not all, but most of them.

We can use a moving average crossover system of X periods to define a trend. If the close was above the moving average, the trend was up until the close was below the X-day average of lows (the trend reversed). Tradingview has all sorts of moving averages in its indicator library.

Next, we define the market entry conditions (the trading rules). We buy (Long) when the asset’s price closes above the moving average, and we sell (Short) when it closes below. Here, we determine if one operation cancels the previous one, meaning a Long trade closes when a Short trade opens, or if each operation has a defined Stop Loss and Take Profit. In Tradingview, we can draw trading boxes with this data.

With our conditions and our assets in a Watchlist, we can review in which timeframe our strategy performs best. In general, in smaller timeframes, we will have more signals for our system, but we increase the number of trading signals, and thus increase the risk of whipsaws and losses. In higher timeframes, we will have a lower number of trades and exposure, but this may affect the strategy’s performance.

Can I backtest on TradingView?

You can backtest your trading strategies in TradingView manually or automatically.

You can navigate through your chart, looking for setups, marking them, and then retrieving the data for later analysis. However, you can also code your logic in Pine Script and run it on your chart. TradingView will provide a report on the strategy’s performance, a list of trades, and the option to export all the information.

TradingView’s Performance Summary provides valuable information with metrics about its performance, such as Winrate, Profit Factor, Drawdown, Net Profit, Sharpe Ratio, etc.

Remember! Deep Backtesting in currently in Beta. The main difference between Deep Backtesting and the regular Strategy Tester backtesting is the ability to select a specific date range for strategy calculation.

Can I backtest on TradingView?

Programming with Pinescript in Tradingview

Tradingview has a native scripting language called Pine Script, which is much more accessible than a high-level programming language. It provides many native functions and adds more with each revision.

Pine Script allows us to build indicators, strategies, and libraries, making our lives much easier from the conception of an idea to its implementation.

PineScript has extensive documentation with examples of its implementation and the differences between script types- an indicator, a strategy, or a library. If we program a strategy, we can test it on any asset and any timeframe, saving hours of screen time and making data analysis much smoother.

Pincescript programming

Here’s an example of a trend-following strategy programmed with Pine Script and its performance curve:

Pinescript example of a trading strategy

Conclusions

TradingView is a powerful and versatile platform that provides traders with a wide range of tools and features to perform technical analysis, develop trading strategies, execute trades, and integrate with various brokers for different financial assets. It is an excellent choice for those interested in taking their first steps in trading and developing strategies, analyzing them, and executing them in real-time.

Previous articlePost Holiday Seasonal Effect On Stock Market (Strategy, Examples, And Backtests)
Next articleUlcer Index — What Is It?