This is a basic trading strategy using Stop-Limit orders placed on Fibonacci retrace on price action taking place in given "phases" Phases are named "Buy" or "Sell" based on the RSI/Stochastic Oscillators in the chart. On overbought conditions we sell, and on oversold conditions we buy. These conditions trigger "buy" or "sell" phases and we react with stop limits placed from the previous cycles price extreme to the new cycles current price - at the Fibonacci retrace level of 23%. Further I recommend pyramiding your orders on the 38% fib as well. Leaving only 15-20% of the equity on the 23% retrace and 35-40% on the 38% retrace.
I am attempting to form a trading strategy which can be automated.
This is not a finished product, and I do not recommend trading on this basis blindly.
Thanks for looking!
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Update with the new long based on current state:
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Keep an eye on the cycle -- we're a ways off for now though -- :)
@Bart196, It sounds like blue might not be a good color for this then eh? hehe
Acel
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@Bart196 @nukenowakowski same here, wow. Even with a filter, the pink and cyan pops out.
blessmywork
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@Acel, lol... Sorry for killing retinas.. I just wanted to make this thread clearly "different" from any of my other content.
Delusory
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looks like it is gearing for a new cycle up.
I've been looking through btc using bollinger bands, and it seems when ever a 4h candle closes above/below the MA20 it displays a change in trend, after RSI and stochRSI where at the top/bottom. But there are some fake brake outs. What setting are you using on RSI? Using length of 10, it looks like it more often goes to oversold/overbought according to the dips/tops.
Dradian
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also the last buy zone wasn't in the under 20 oversold zone. Is there wiggle room there? What would an oversold or overbought condition be considered? And is it just when the K crosses the oversold or overbought zone? or do both the K and D have to cross? I have all these questions because I really like this strategy.
I backtested this with DMI (14,14), only buying when the DMI was near crossover to help w fals triggers. Interesting result. It seemed to have prevented fake outs some.
blessmywork
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@ebobryan, I run 30 rather than 20. However, both the RSI and Stochastic oscillators in this tool need to be below, else no trigger for the new cycle/end of cycle event. That condition creates a new cycle, and ends the current cycle. This is when we create the stop-limit which is trailing the current price at the 23% retrace point from the previous price extreme.
I'm glad you're backtesting it! I'd be interested to see your results, so please do share!
Dradian
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It looks like this should have triggered a buy both at 3/26 10pm UTC and 3/27 4pm UTC. Is that so?
The price had jumped to the .236 line, and it was oversold on the 4 HR Stoch RSI using your settings. Also your Fib doesn't go from tip to tip. Is that on purpose, and if so, how are you calculating where to place the top and bottom of the Fib? Thanks!
blessmywork
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@ebobryan, My fib goes from the extreme of the bar, to the extreme of the bar. I don't hunt wicks. I try to make my moves where there is more volume. This helps solve the size problem.
The oversold/overbought conditions are what trigger a new "cycle" a buy is created after oversold, and a sell is created after overbought. the principle is to move a stop-limit order @ the 23% retrace of the current price, to the last cycle's extreme (high or low depending on if its a buy or sell cycle)