Alpha Bot
What is Alpha Bot?
The Alpha Strategy is an automated trading system that combines momentum analysis, trend filtering, and dynamic risk management to identify high-probability trade setups.
Core Concept
The strategy operates on a simple principle: trade with momentum, but only when the higher timeframe trend agrees. It uses a multi-layered filtering system to avoid taking trades against the prevailing market direction.
How It Works
Trend Detection
The strategy establishes the overall market bias using a dual moving average system. When the faster average is above the slower one, the market is considered bullish. When it crosses below, the bias flips bearish.
This trend state acts as a directional filter - in strong uptrends, the strategy automatically disables short entries to avoid fighting the tape.
Momentum Signals
Entry signals are generated using a momentum oscillator system that measures the strength and direction of price movement. The strategy looks for moments when momentum shifts decisively in one direction, confirmed by additional filters to reduce false signals.
EMA Retest Entries
Beyond momentum signals, the strategy also watches for retest entries - situations where price pulls back to key moving averages during an established trend. These retests provide lower-risk entry points with tighter stops.
Time-Based Position Sizing
The strategy dynamically adjusts position size based on the hour of the day. This isn't arbitrary - it's based on backtesting data that revealed certain hours consistently underperform while others produce stronger results.
Each hour is assigned a contract size tier:
10:00 AM
5
Historically the strongest entry hour - post-open momentum
11:00 AM - 3:00 PM
4
Peak trading hours with reliable follow-through
Other hours
2
Standard baseline sizing
4:00 AM, 9:00 AM, 4:00 PM, 8:00 PM, 12:00 AM
1
Statistically weakest hours - minimal exposure
The hours assigned the lowest contract size (1) are what we call "bad hours" - periods where backtesting showed entries had lower win rates or worse risk/reward outcomes. Rather than avoid these times entirely (which could mean missing occasional good setups), the strategy simply reduces exposure during these windows.
Conversely, the 10 AM hour gets maximum sizing because data showed entries shortly after market open, when volume and volatility spike, tend to produce the most reliable moves.
This approach lets the strategy stay active around the clock while concentrating capital during the hours most likely to produce winners.
Dynamic Risk Management
Every trade is protected with both a stop loss and take profit target. These levels are calculated dynamically using ATR (Average True Range), which means they automatically adapt to current market volatility - tighter in calm markets, wider when things get choppy.
The stop loss trails as the trade moves in your favor, locking in profits while giving the position room to breathe.
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