Unveiling the Obelisk Ichimoku ZEMA Strategy with Backtesting and Hyperoptimization

The Obelisk Ichimoku ZEMA strategy combines four key elements for identifying potential trading opportunities:

  • Ichimoku Cloud: This is a technical indicator that combines multiple moving averages to assess momentum and potential support and resistance levels.
  • Standard Stochastic Lines (SSL): This indicator measures the price of a security relative to its price range over a certain period. It can be used to identify overbought and oversold conditions.
  • Average True Range (ATR): This indicator helps assess the market’s volatility by measuring the difference between the high, low, and previous close price.
  • Zero Lag Exponential Moving Average (ZEMA): This is a type of moving average that aims to reduce the lag associated with traditional exponential moving averages. It can be used to smooth out price data and identify trends.

The strategy appears to analyze two timeframes:

  1. Short Timeframe: This timeframe is likely used to generate buy and sell signals based on the current price action and indicator values.
  2. Informative Timeframe: This timeframe provides additional data points to the analysis, possibly on a larger scale, to complement the signals from the shorter timeframe.

Trend Identification:

  • The Ichimoku Cloud is formed by several moving averages: Tenkan-sen (conversion line), Kijun-sen (base line), Chikou Span (leading span), and Senkou Span A & B (leading cloud).
  • The relative positions of these lines and the cloud’s direction (upward for bullish, downward for bearish) can indicate the prevailing trend.

Entry and Exit Signals:

  • The strategy might use a combination of Ichimoku cloud elements and ZEMA to generate entry and exit signals.
  • For example, a buy signal could be triggered when the price crosses above the Ichimoku cloud and the ZEMA slopes upwards, suggesting a potential uptrend.
  • Conversely, a sell signal could be triggered when the price falls below the cloud and the ZEMA slopes downwards, indicating a potential downtrend.

Additional Filters (Potential):

  • The specific strategy implementation might incorporate additional filters to refine the signals and potentially reduce false positives. These filters could include:
  • Volume Filters: Ensuring sufficient trading activity (liquidity) in the market.
  • Volatility Filters: Considering the asset’s recent price volatility.
  • Other Technical Indicators: Employing additional indicators for confirmation or to identify potential divergences.

Github Link for the “Obelisk_Ichimoku_ZEMA_v1” strategy