Sample Strategy: Catching Trends

The basic tenant of making money while trading is to 'buy low' and 'sell high'. However, what becomes difficult is that you don't know when are you at a low and when the tide is going to change. Trying to catch an upward or downward trend is close to the best way to make money here.

Hypothesis

Try and catch trends when they are beginning to make effective trades. Buy when the trend is moving up and sell when the trend is falling.

We will use the MACD indicator and the RSI indicator to capture trends here.

Strategy

  • Buy when: The MACD 'diff' line when >0.0 gives a buy signal. This signal is confirmed when the RSI < 35

MACD Diff >0.0 and RSI <30

  • Sell when: The MACD 'diff' line when <0.0 gives a sell signal. This signal is confirmed when the RSI > 65

MACD Diff <0.0 and RSI >70

 

Creating the strategy on Mudrex

  • Components: To make this strategy all we need is 4 indicator blocks, two for MACD and RSI each, and 2 'AND blocks, one each to buy and sell.
    • This is how the MACD blocks would look like: 
    • This is how the RSI blocks would look like:

 

  • Final strategy visual: We would then go out and connect the Indicator blocks to the AND blocks and those to the buy and sell blocks to complete our strategy.

  • Adding a stop loss helps us improve the strategy

Testing the strategy

  • Running on ETH/BTC -30 min period from 1st Jan to 1st June gives a -27.89% ROI

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