FREMA Levels for StrategyFREMA facts:
Upper hot color bands are based on Buying Pressure
Lower cold color bands are based on Selling Pressure
This makes the levels of bands be more relevant to the candle metrics. The regular ATR bands the upper and lower levels expand equally with ATR change. Whereas FREMA levels expand and shrink by the change of 2 factors: Buying and Selling Pressure.
In a nutshell, it's the bullish and bearish parts of the candle measured with separate variables that govern the upper and lower bands independently. Therefore we can agree that out of all volatility bands, the FREMA is more native to the nature of ongoing price fluctuations.
The volatility levels can be implemented in strategy for trading the range of probabilistic prices. Combination with trend-following indicators can determine the condition of multiple buying orders at different cold color levels.
To be able to catch the very bottoms, the condition of bullish entry series should be set with 0 open trades unless the price or any other price-following substituting components are equal or lower than one of the lowest bands . This filters the entries from risks of buying as soon as price falls below middle deviation line.
For filtering with "Buying and Selling Pressure" use open source code below:
Buyingsellingpressure
$BTC: FREMA Trend CaptureDefault settings would look like:
To increase responsiveness to risks and close positions with slightest trend change incentive, it's best to check the following:
Invert BSP
Dynamic Factor
It is adjusted to the market incentive because the SuperTrend governing bands have carry ratios of bulls and bears. It causes bands to fuse with ongoing candle emerging proportions.
Observing different trend phases deeper in history:
For bullish strategy (Open Long / Close Long):
It's better to have multiplier of uptrend band less than downtrend band:
Having uptrend multiplier less than multiplier of second raw will enhance responsiveness of closing bullish positions and lower reaction to creating new bullish positions.
When it's set vice versa - having1st raw factor bigger than the argument of 2nd raw factor, will lower the responsiveness of Opening Short but higher the responsiveness of Closing Shorts.
The bottom like is I'd use this combination of inputs to secure the average trade as Position Entry and Position Close are timed by the proportions between Buying and Selling Pressure.