This strategy is a trend trading system. The code published here is ONLY a BACKTEST VERSION that allows people to test the strategy to see that it is legitimate. Contact me if you want access to the full version.
It is designed and optimised for BTC and ETH USD pairs. (I am working on code for alts, but the parameters need to be altered to accommodate for higher ).
*NOTE: This strategy includes a date time-frame selection feature. It's set from 01/03/2017 by default to test on Bitmex since it launched and warmed up the indicators. If you want to include trading periods prior to this period when testing on exchnages who have been around for longer you need to extend the dates back to the dates you want to include
- 5,807% over the last 2 years (from 01/03/2017) on XBTUSD (Over 2,700% over the same period on other exchanges)
18,150% over the lifetime of trading BTCUSD on Coinbase
215,546% over the lifetime of trading BTCUSD on Bitstamp
55,000% over the last 3 years on ETHUSD (Coinbase etc)
This is a basic pictorial illustration of how to use the full version of the strategy:
You can verify these images with the trades made on the chart using the backtesting feature
Explanation and Intuition behind the strategy:
I used a combination of trend indicators/filters to automatically interpret the trend and, especially the momentum of the price action.
This plays into the lesson I have learnt from both professional traders, and through personal experience. Which is, “The trend is your friend”. Trading is made so much easier, with considerably less risk when you are trading with momentum and direction.
Because of this, I have designed the system to only go long when the trend indicators/filters have determined that an uptrend has been established and/or the momentum has shifted to the upside. The opposite is also true. If the momentum and/or trend has manifested in a downward direction, the system will only look for shorting opportunities.
It then uses a combination of , , open/high/low/close data and a sequential system to pinpoint significant price-levels with which it determines entries, take-profit and stop-loss levels.
Even though the code on the backend may get a little hairy, the interface with which it shows you, the user, where to enter, where to take profit and where to put in a stop-loss, is very very very simple, but highly effective, especially in the crypto space where things move a little faster than usual. The only thing you need to look at is two simple horizontal lines. No seriously, I have spent a lot of time trying to simplify the actual user method to be as basic and as easy to use as it possibly can be without having to interact with the nitty gritty in the background. Often I see charts that are just wayyyyy too messy and can really mess with your perceptions and readings. This takes away the clutter, but still works like it should. The levels for each line are updated with every new candle.. The strategies were designed with specific timeframes in mind, since trends change in different speeds across different timeframes. These timeframes are specified in the strategies name and will be clear where to use it. Let’s have a deeper look at this Two-Line System (Refer to the images above to see the visuals):
First up is the Trend-Horizontal. This line is designed to be a single-glance trend direction/momentum indicator. If price is above the line, and the line is green, it means that the system has determined the price to be in an uptrend and/or possesses upward momentum. During sideways action on the price this line will flick back and forth, but, the way the system is designed it usually stops entries during these times, and even when it enters during sideways chop, it automatically sets up tight stops to mitigate risk.
So when it is green, you are looking for a long entry, and when it is red you are looking for a short setup. How do you know when you enter? That is where the second line comes in, the Execution-Horizontal. This one is black and will always be black. This line reacts when you break above or below it. It represents significant points in a sequential manner and given the right circumstances will provide you with entries, exits and take-profits. It works similar to the traditional SAR (Stop and Reverse) in that manner. It has 2 simple rules depending on where the price is relative to the EH and TH lines. Trades are only possible at the time the Execution-Horizontal is broken through by the price either upward or downward:
1. When the TH is Green and:
a. The EH is broken upward, you enter Long
b. The EH is broken downward, you close your Long trade if entered in accordance with Rule 1.a.
c. Otherwise, do nothing and wait for a setup.
2. When the TH is Red and:
a. The EH is broken downward, you enter short
b. The EH is broken upward, you close your short trade if you entered in accordance to Rule 2.a.
c. Otherwise, do nothing and wait for setup.
You can trade this more conservatively and wait for the candle close when you get the stop-loss/take profit hit. Sometimes big wicks can stop you out early, and waiting for the candle close can increase your effectiveness though it carries its own risks.
If you are interested in the full version that displays the two-line interface so you can place your trades in advanced , and also includes an alert system that can send you notifications on Trading View when the longs, short and stop-loss/take-profit conditions are met, contact me on TradingView or any of the other platforms below
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Thanks for listening, happy trading and go out there and crush it ;)
PS: You need to add the script to your favourites using the button on the bottom right of the page to be able to have access to it. You will then see the strategy apear in the favourites section of your indicator window
0.01 BTC per month
0.1 BTC for a year
0.2 BTC for 3 years
All of these include continual support and development on this strategy. I personally use this strategy for my own trades so I am always working to make improvements and any future releases of the same strategy will be made available to those already subscribed.