I want to start a thread dedicated to using Shark Indicators' BloodHound software to create trading strategies. I will describe how I use BloodHound in testing indicators and developing trading strategies that I can use in Ninja Trader to generate signals and discretionary trade around them. I have been back testing strategies and indicators for about six months, and started an elite journal 3 or so months ago to track my progress. I have had a lot of success doing this, so I was curious if any other nexusfi.com (formerly BMT) users have tried this, and/or would like to and join a post about it.
Creating an automated trading strategy doesn't mean you have to trade it on auto-pilot. I have learned that I can create strategies, back test them and forward test the signals in current market conditions on a sim account in Ninja Trader while trading in my live account. I am actually going to start a new Top Step Combine in January using Ninja Trader and use a BloodHound strategy that I have been developing for crude which I am very excited about. So, I will have lots to post about going forward, both here and in my trading journal.
In the example for this first post for the introduction to BloodHound, I have built a simple trend following trading strategy that creates entry orders when price is trading above both the 20 moving average on the 60 minute chart and the 10 moving average on the 5 minute chart. This would provide the trend filters. I would only want to use this strategy in markets that have a proven new trend or in a market that has an well established trend.
I have not included any exit strategies in the first post. I am just using the Ninja strategy platform template to use a 30 tick stop loss and test this strategy on a 2 minute chart. Exit strategies are one of the most critical elements to a successful trading strategy, and I will explore these in much further detail in later posts. But for today, a simple 30 tick stop will suffice.
The Shark Indicators’ BloodHound platform helps me determine higher-probability intraday entries by allowing me to use strategies I have tested on the markets I trade. And, I don’t have to auto trade when using them. I just use the auto trade features in a simulator and trade from my live account around the signals that are generated.
BloodHound is very easy to use and doesn't require any coding. I am a firm believer in KISS - Keep It Simple Stupid. You basically just setup the indicators you want to test out, or setup your trading strategy with any combination of indicators and price, and then connect everything up using relational logic nodes. There are other sophisticated features to choose from like signal blockers, among others. Here I have setup a few moving average indicators and will join them with the ADD logic node to create a simple multi-time frame trend following strategy. But this is very sophisticated software and you will spend hours testing your strategies with it.
I have set out the steps below to use to create a strategy for identifying when price is trading above the 20 and 10 SMAs on the 60 minute and 5 minute charts to signal trades on the 2 minute chart.
1. Create new BloodHound template.
• Add a 60 Minute Chart
• Put an indicator comparison solver on the 60 min chart
a. Set the Indicator A type to Closing Price
b. Set the Indicator B type to SMA 20
c. Change the name display to “Price to SMA 20 Comparison”
• Add a 5 Minute Chart
• Copy the previous indicator comparison solver and move it down to the 5 minute chart
o Change the Indicator B type to SMA 10
o Change the name display to “Price to SMA 10 Comparison”
2. Go to the BH Logic tab and make the following settings:
• Create a New Logic
• Name this Entry
• Add the following Existing solver nodes: