BTC 101 Michaels Bands Back to Basics

//@version=6
strategy('BTC 101 Michaels Bands Back to Basics', overlay=true)

// Averages
ema3 = ta.ema(close, 3)
ema6 = ta.ema(close, 6)
ema200 = ta.ema(close, 200)

// Declare bandColor variable
var color bandColor = na

// Entry conditions
longCondition = ema3 > ema6 and ema6 > ema200
shortCondition = ema3 < ema6 and ema6 < ema200

// Confirmed break away from EMA 200 by 1%
breakAwayThreshold = 0.01
confirmedBreakAway = math.abs(close - ema200) / ema200 > breakAwayThreshold

// Variables to track stop loss levels
var float highestPrice = na
var float lowestPrice = na
var float stopLossLevel = na

// Trailing stop percentage input
trailingStopPercent = input.float(2, title="Trailing Stop (in %)", minval=0.1) / 100

// Entry logic with stop loss tracking
if longCondition and confirmedBreakAway
    bandColor := color.green
    strategy.entry('Long', strategy.long)
    highestPrice := high
    highestPrice == stopLossLevel

if shortCondition and confirmedBreakAway
    bandColor := color.red
    strategy.entry('Short', strategy.short)
    lowestPrice := low
    lowestPrice == stopLossLevel

// Update trailing stop for long positions
if (strategy.position_size > 0)
    highestPrice := na(highestPrice) ? high : math.max(highestPrice, high)
    stopLossLevel := highestPrice * (1 - trailingStopPercent)
    strategy.exit('Trailing Stop', 'Long', stop=stopLossLevel)

// Update trailing stop for short positions
if (strategy.position_size < 0)
    lowestPrice := na(lowestPrice) ? low : math.min(lowestPrice, low)
    stopLossLevel := lowestPrice * (1 + trailingStopPercent)
    strategy.exit('Trailing Stop', 'Short', stop=stopLossLevel)

// Plot stop loss level
plot(stopLossLevel, title="Stop Loss Level", color=color.red, linewidth=2, style=plot.style_line)

// Plots
plot(ema3, color=bandColor, linewidth=1)
plot(ema6, color=bandColor, linewidth=3)
plot(ema200, color=color.blue, linewidth=2)