TDO and PSP setups

By the AKQX QuantumTrade team · Educational content, not investment advice. This describes a strategy family as a set of rules. It is not a recommendation, makes no claim that it is profitable, and its example numbers are made up.

What is the idea?

Two terms here have no single public definition, so the definitions are AKQX's own. A PSP is a divergence between two correlated pairs where their candles for the same period close in opposite directions. The True Day Open, or TDO, is the opening price of the 00:00 UTC candle for that day.

The strategy combines them. A PSP candle is marked on a slower timeframe. A faster timeframe is then watched for a candle that closes beyond the PSP candle's high or low, which is the entry. The TDO acts as a directional filter: it allows only trades on the permitted side of that single, unambiguous daily price.

Its appeal as a testing subject is that every part is mechanical. The PSP candle, the breakout close and the TDO are all numbers. Nothing in the setup needs a person to decide what a pattern looks like.

The rules, in order

1. On a slower timeframe, such as 30 minutes, mark a PSP candle: the two pairs close in opposite directions over the same period.
2. Record that candle's high and low, and let the marking expire after a set number of candles.
3. On a faster timeframe, such as 3 minutes, wait for a candle to close beyond the PSP high for a buy or the PSP low for a sell.
4. Apply the TDO filter: only allow the trade if price is on the permitted side of the 00:00 UTC open. A whole-candle version requires the entire setup candle to sit on the right side.
5. Choose whether to trade both pairs independently or one of them.
6. Apply a day limit, for example allowing a new trade only after the previous one hit its stop, up to a maximum count.

The settings the rules hide

Every setting below is a choice, and each one changes which trades the strategy takes. They have to be fixed before a test, and the more of them there are, the more room there is to fit the past.

What AKQX provides for this

Both ideas are AKQX's own working definitions, taken from its strategy documents, and they are described on the ICT and SMC builder page.

AKQX has a ready PSP breakout template with no filters, using a 1-hour PSP candle and a 5-minute body-close breakout, which is the plain version of the idea.

It also has a ready TDO-PSP template, using a 30-minute PSP candle, a 3-minute breakout entry on both pairs, a whole-candle TDO filter and a loss-chain day limit. It is part of the live paper-trading set. Run your own backtest: results depend on the cost model, and fees are estimates.

How to backtest it honestly

1. Start with the plain PSP breakout and no filter, and record the count and the result. Then add the TDO filter and compare, so you can see what the filter changed.
2. Test the filter on its own by running the same entry with and without it over identical data. Because the TDO is one fixed price, any effect is measurable.
3. Be consistent about the day boundary, here 00:00 UTC, and about daylight saving. It is a convention of this platform, not a universal standard.
4. Vary the PSP expiry and the entry timeframe and check the result degrades gradually.
5. Count trades per month before looking at profit. A setup that fires a handful of times a year cannot support a conclusion.
6. Include fees and slippage, then paper trade. On a 3-minute entry the spread is a real fraction of the stop.

The full method is in how to backtest a crypto strategy, and the way results are scored is on the methodology page.

A worked example, with made-up numbers

Illustrative only: on a 30-minute chart, pair A closes up and pair B closes down, so the candle is marked as a PSP, with a high of 2,015 and a low of 2,000. The 00:00 UTC open for the day was 2,008. A buy needs a 3-minute candle to close above 2,015 with the setup candle on the correct side of 2,008. A sell needs a close below 2,000. If neither happens within the expiry, the marking lapses and nothing is traded.

Where it goes wrong

• Assuming TDO and PSP mean the same thing elsewhere. Confirm the definition before comparing any result with someone else's.
• Trading both pairs and counting the results as two independent samples.
• Tight stops on a fast timeframe, where costs dominate.
• Stacking filters until the backtest looks good, then reading the result as an edge.

Questions about tdo and psp setups

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