Pine Script v6 introduced cleaner syntax and performance improvements that make systematic iteration faster. For retail traders, the real edge comes from discipline: hypothesis → transparent rules → out‑of‑sample evaluation → risk management.
Example concept: 21/50 “reclaim.”
Narrative: After a pullback, a trend resumes when price closes back above the 21‑day and then the 50‑day moving average, while drawdown is contained.
Test blueprint
- Define rules: Entry when close crosses above MA21 and MA50 within N bars; confirm with rising volume or RSI improving from oversold.
- Filters: Avoid earnings gaps; exclude micro‑caps; require average daily value traded > €5M.
- Exit: Stop under recent swing‑low or ATR‑based; profit‑taking at R‑multiple or trailing stop.
- Risk: Fixed fractional position sizing; portfolio heat cap (e.g., max 25% of equity at risk).
- Validation: Walk‑forward optimization; test across sectors and bull/bear regimes; hold‑out symbols.
AI assist ideas
- Generate Pine snippets (e.g., ATR trailing stops, earnings‑date filters).
- Create synthetic negative tests (deliberately bad parameter combos) to check if results are fragile.
- Summarize backtest logs into a human‑readable memo with key metrics and caveats.
Reporting checklist
- Annualized return, volatility, max DD, Sharpe/Sortino, win‑rate, profit factor, exposure, average trade, tail risk.
- Stability over rolling 3‑year windows.
- Liquidity screens to avoid slippage blow‑ups.
Affiliate hooks (placeholders)
- Charting/backtests: {{aff_tradingview}}
- Pattern/automation suite: {{aff_trendspider}}
- Data APIs for external research: {{aff_alpha_vantage}}
Bottom line: Use AI to build faster and test harder—but let risk constraints and transparent rules decide what ships to live trading.
