trader-mcp/strategies/trend_follower.md

Trend Follower

Directional strategy for confirmed momentum.

Best used when

• trend is strong and persistent
• structure supports continuation
• liquidity is normal
• Hermes wants to follow momentum instead of fading it

Avoid when

• price is range-bound
• trend strength is weak or noisy
• event risk is high
• the market is too chaotic for clean continuation

Core parameters

• trade_side: buy, sell, or both
• balance_target: stop once the wallet reaches the target balance for the active side
• order_notional_quote: quote-currency notional per order
• max_order_notional_quote: optional quote notional cap per order
• dust_collect: allow the last order on the funding side to consume leftover size when it would otherwise be stranded below the venue minimum
• entry_offset_pct: offset from market for entries
• exit_offset_pct: offset for exits or reversals
• cooldown_ticks: pause between actions

Hermes policy mapping

• Hermes controls whether the side is active.
• Hermes may set balance_target to define how far the wallet should rotate.
• Hermes may set the quote notional and offsets.

Notes

• Hermes decides when trend following is allowed.
• Trader maps policy to concrete order behavior.
• The strategy reports side, quote notional, and policy-derived settings.
• trade_side lets Hermes or the operator run a long-only, short-only, or symmetric directional instance.
• balance_target=1.0 means keep trading until no more usable size remains on the funding side.
• In buy mode, values below 1.0 target the base share of wallet value. Example: 0.5 stops near a 50/50 base-quote split.
• In sell mode, values below 1.0 target the quote share of wallet value. Example: 0.5 stops near a 50/50 quote-base split.
• When an order would overshoot a sub-1.0 balance_target, the final order is clamped to the remaining target gap instead of sending the full configured notional.
• live fee rates are used directly, so the strategy does not need a configured fee fallback.