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Understanding Strategy Presets

Kelor provides 50+ pre-built trading strategies that you can use immediately. Each strategy has been carefully designed with sound trading principles and comes with customizable parameters to fit your trading style.

What Are Strategy Presets?​

Strategy presets are ready-to-use trading algorithms that automatically execute buy and sell orders based on technical analysis. Instead of building strategies from scratch, you can:

  1. Choose a preset that matches your trading goals
  2. Customize the parameters to optimize performance
  3. Backtest against historical data
  4. Deploy with paper or real money

Think of presets as "trading recipes" — proven formulas that work, which you can adjust to taste.

Strategy Categories​

Kelor organizes strategies into five main categories based on how they approach the market:

1. Mean Reversion Strategies​

Philosophy: "What goes up must come down (and vice versa)"

These strategies profit when prices return to their average after extreme movements.

  • When they work best: Ranging, sideways markets
  • Key principle: Buy oversold, sell overbought
  • Risk: Can struggle in strong trending markets
  • Examples: Bollinger Bands, RSI, Stochastic Oscillator

Best for: Traders who believe markets overreact and eventually correct.

2. Trend Following Strategies​

Philosophy: "The trend is your friend"

These strategies identify and ride existing trends until they show signs of ending.

  • When they work best: Strong trending markets (bull or bear)
  • Key principle: Buy when uptrend confirmed, sell when downtrend confirmed
  • Risk: Can lose money during choppy, directionless markets
  • Examples: EMA Crossover, MACD, Supertrend

Best for: Traders who want to capture large moves and are okay with some false starts.

3. Breakout Strategies​

Philosophy: "Big moves follow consolidation"

These strategies enter trades when price breaks through key support or resistance levels.

  • When they work best: After periods of low volatility (consolidation)
  • Key principle: Enter on breakout, ride the momentum
  • Risk: False breakouts can trigger losses
  • Examples: High/Low Breakout, Donchian Breakout, Triangle Breakout

Best for: Traders who want to catch the beginning of strong moves.

4. Volatility-Based Strategies​

Philosophy: "Trade based on market energy levels"

These strategies adjust their behavior based on how much prices are moving (volatility).

  • When they work best: All market conditions (they adapt)
  • Key principle: Trade more aggressively in high volatility, conservatively in low volatility
  • Risk: Requires more sophisticated risk management
  • Examples: ATR Bands, Bollinger Band Squeeze, Keltner Channels

Best for: Traders who want strategies that adapt to changing market conditions.

5. Volume-Based Strategies​

Philosophy: "Volume confirms price movements"

These strategies use trading volume to confirm the strength of price movements.

  • When they work best: When volume patterns are clear and consistent
  • Key principle: High volume confirms trends, low volume warns of weakness
  • Risk: Not all markets have reliable volume data
  • Examples: Volume Breakout, OBV Divergence, Accumulation/Distribution

Best for: Traders who believe volume tells the truth about market conviction.

How to Choose the Right Strategy​

Step 1: Identify Your Trading Style​

Day Trader (hold minutes to hours)

  • Recommended: Breakout strategies, short-period mean reversion
  • Avoid: Long-term trend following
  • Best presets: High/Low Breakout, RSI (with shorter periods)

Swing Trader (hold days to weeks)

  • Recommended: Trend following, medium-term mean reversion
  • Works well with: Most strategy types
  • Best presets: EMA Crossover, Bollinger Bands, MACD

Position Trader (hold weeks to months)

  • Recommended: Long-term trend following
  • Avoid: Short-term mean reversion
  • Best presets: SMA Crossover, ADX Trend Filter, Turtle Trading

Step 2: Assess Current Market Conditions​

Trending Market (clear direction)

  • Use: Trend Following or Breakout strategies
  • Avoid: Mean Reversion strategies
  • Check: ADX indicator (above 25 = trending)

Ranging Market (sideways movement)

  • Use: Mean Reversion strategies
  • Avoid: Trend Following strategies
  • Check: ADX indicator (below 20 = ranging)

High Volatility (large price swings)

  • Use: Volatility-Based strategies
  • Adjust: Wider stops, smaller position sizes
  • Check: ATR or Bollinger Band width

Low Volatility (quiet markets)

  • Use: Breakout strategies (anticipating next big move)
  • Avoid: Strategies requiring clear trends
  • Check: Bollinger Band squeeze signals

Step 3: Consider Your Risk Tolerance​

Conservative (capital preservation)

  • Look for: Strategies with high win rates (60%+)
  • Accept: Smaller profits per trade
  • Best: Mean reversion with tight stops
  • Examples: RSI, Stochastic, Bollinger Bands

Moderate (balanced approach)

  • Look for: Strategies with good risk/reward ratio (1:2 or better)
  • Accept: Moderate drawdowns (10-20%)
  • Best: Trend following with filters
  • Examples: EMA Crossover, MACD, ADX Trend Filter

Aggressive (maximize returns)

  • Look for: Strategies with high profit potential
  • Accept: Larger drawdowns (20-30%+)
  • Best: Breakout and momentum strategies
  • Examples: Donchian Breakout, Turtle Trading, Supertrend

Understanding Strategy Parameters​

Every strategy preset comes with configurable parameters. Here's what they typically control:

Common Parameters​

Period (e.g., 14, 20, 50)

  • What it controls: How much historical data is used
  • Shorter period (5-14): More responsive, more signals, more false signals
  • Medium period (15-30): Balanced
  • Longer period (50-200): Slower, fewer signals, more reliable

Threshold Levels (e.g., oversold 30, overbought 70)

  • What it controls: When the strategy triggers trades
  • Lower thresholds: More aggressive, more trades
  • Higher thresholds: More conservative, fewer trades

Multipliers (e.g., 2.0, 3.0)

  • What it controls: Width of bands or stop distance
  • Lower multiplier: Tighter bands, more signals, more whipsaws
  • Higher multiplier: Wider bands, fewer signals, more reliable

Confirmation Settings (true/false)

  • What it controls: Whether additional filters are applied
  • Enabled: Fewer trades, higher quality
  • Disabled: More trades, more false signals

Strategy Performance Metrics​

When evaluating strategies, pay attention to these metrics:

Win Rate​

What it means: Percentage of profitable trades

  • Above 60% = Very good for mean reversion
  • Above 40% = Good for trend following
  • Below 40% = Strategy may need adjustment or isn't suited for current market

Important: High win rate doesn't guarantee profitability! A strategy with 40% win rate but 1:3 risk/reward can be very profitable.

Profit Factor​

What it means: Total profits / Total losses

  • Above 2.0 = Excellent
  • 1.5-2.0 = Good
  • 1.2-1.5 = Acceptable
  • Below 1.2 = Poor, needs optimization or different strategy

Maximum Drawdown​

What it means: Largest peak-to-valley decline

  • Below 15% = Conservative
  • 15-25% = Moderate
  • 25-40% = Aggressive
  • Above 40% = Very risky, consider reducing position size

Important: Can you emotionally handle this drawdown? If not, choose a different strategy.

Sharpe Ratio​

What it means: Risk-adjusted returns (higher is better)

  • Above 2.0 = Excellent
  • 1.0-2.0 = Good
  • 0.5-1.0 = Acceptable
  • Below 0.5 = Poor risk/reward balance

Number of Trades​

What it means: How often the strategy trades

  • High frequency (100+ trades): Good for statistics, requires low fees
  • Medium frequency (20-100 trades): Balanced
  • Low frequency (less than 20 trades): Fewer fees, but limited statistical significance

The Kelor Advantage​

Pre-Tested Strategies​

Each preset has been:

  • Tested across multiple market conditions
  • Optimized for common timeframes
  • Documented with clear rationale

Customizable Parameters​

Every strategy allows you to:

  • Adjust indicator periods
  • Fine-tune thresholds
  • Enable/disable filters
  • Optimize for your trading style

Continuous Improvement​

The Kelor team:

  • Regularly adds new strategy presets
  • Tests strategies across different markets
  • Updates documentation with best practices
  • Shares community insights on what's working

Note: The number and variety of strategies will grow over time. Check back regularly for new additions!

Getting Started​

Ready to choose your first strategy? Here's the process:

  1. Browse the categories in this section
  2. Read about 3-5 strategies that sound interesting
  3. Pick one strategy to start with
  4. Backtest it with default parameters first
  5. Adjust parameters based on results
  6. Paper trade for at least 2-4 weeks
  7. Go live when consistently profitable

Important Tips:

  • Start with one strategy — don't try multiple at once
  • Use default parameters initially — they're set for good reason
  • Backtest thoroughly — test on at least 6-12 months of data
  • Paper trade first — verify backtest results in real-time
  • Be patient — no strategy wins every trade
  • Keep learning — understand why your strategy wins and loses

Common Mistakes to Avoid​

1. Strategy Hopping​

Mistake: Switching strategies after a few losing trades

Reality: All strategies have losing periods

Solution: Commit to a strategy for at least 100 trades before evaluating

2. Over-Optimization​

Mistake: Tweaking parameters until backtest looks perfect

Reality: Over-optimized strategies fail in live trading

Solution: Use standard parameters, make small adjustments only

3. Ignoring Market Conditions​

Mistake: Using trend-following in ranging markets (or vice versa)

Reality: Strategies perform differently in different conditions

Solution: Match strategy type to current market conditions

4. Unrealistic Expectations​

Mistake: Expecting 90% win rates or doubling account monthly

Reality: Professional traders aim for 20-40% annual returns

Solution: Focus on consistency, not home runs

5. Not Using Stop-Losses​

Mistake: Disabling stop-losses to avoid "getting stopped out"

Reality: One bad trade can wipe out months of profits

Solution: Always use stop-losses, adjust size if needed

What's Next?​

In the following pages, you'll find:

  • Detailed strategy guides for popular presets
  • Real examples showing when strategies work (and when they don't)
  • Parameter optimization tips for different market conditions
  • Combination strategies using multiple presets

Remember: The best strategy is one you understand, can execute consistently, and matches your risk tolerance.

Let's explore the strategies!