Macro strategy based on RSI and Alt Dominance on BTCUSDT
Hi traders,
There's been a lot of discussion about RSI and overbought/oversold levels. Very little testing and data though. Though it might be interesting to show this strategy that runs on high timeframes, has as much profit as buy-&-hold at half the drawdown. It's on
BTCUSDT
This experiment started when we started testing clasic RSI strategies: buy when it's below 30 and sell when it's above 70. It was a profitable strategy but could not touch buy-&-hold in the past year with +330%. In fact the classic RSI strategy on the daily would have brought you "only" +74.1% on the 1D chart.
The reason? In an ascending market high RSI is a measure of intesity of the move rather than the deliminator of a level. So high RSI is good. Remember in 2017 RSI topped out at 95+ only. Selling at 70 would have been a mistake.
So the idea was to take RSI as a measure of intensity and try and come up with a strategy that:
- has us in a position most of the time
- when the top nears it takes us out & quickly catches the dip
- has a limited dropdown, up to 10%
- as always is simple to extecute
- can compete with buy-&-hold in results
The strategy: for the past year the experiment lead to this strategy that yields close to what buy-&-hold does and we noticed it warning of topping out before 11.1. It returned +334.55% in the last year.
We open a position when: RSI is above 50
We close a position when: RSI is above 85 AND Alts Dominance is up by 3% in the last day
No stop loss or take profit - only market based conditions
Why does this strategy work? It seeks out a bull market and is looking to be in a positon as much as possible. By using Alts Dominance in the close condition we see that we are in the last phase of the Money Flow Cycle and altcoins might be outperforming Bitcoin in the next period. Should the bounce for Bitcoin be fast we are at ready to jump back into the market.
Currently we are in a position that oppened on the 11th at the dip. I will update here on how it progresses. This is all on spot.
There's been a lot of discussion about RSI and overbought/oversold levels. Very little testing and data though. Though it might be interesting to show this strategy that runs on high timeframes, has as much profit as buy-&-hold at half the drawdown. It's on
BTCUSDT
This experiment started when we started testing clasic RSI strategies: buy when it's below 30 and sell when it's above 70. It was a profitable strategy but could not touch buy-&-hold in the past year with +330%. In fact the classic RSI strategy on the daily would have brought you "only" +74.1% on the 1D chart.
The reason? In an ascending market high RSI is a measure of intesity of the move rather than the deliminator of a level. So high RSI is good. Remember in 2017 RSI topped out at 95+ only. Selling at 70 would have been a mistake.
So the idea was to take RSI as a measure of intensity and try and come up with a strategy that:
- has us in a position most of the time
- when the top nears it takes us out & quickly catches the dip
- has a limited dropdown, up to 10%
- as always is simple to extecute
- can compete with buy-&-hold in results
The strategy: for the past year the experiment lead to this strategy that yields close to what buy-&-hold does and we noticed it warning of topping out before 11.1. It returned +334.55% in the last year.
We open a position when: RSI is above 50
We close a position when: RSI is above 85 AND Alts Dominance is up by 3% in the last day
No stop loss or take profit - only market based conditions
Why does this strategy work? It seeks out a bull market and is looking to be in a positon as much as possible. By using Alts Dominance in the close condition we see that we are in the last phase of the Money Flow Cycle and altcoins might be outperforming Bitcoin in the next period. Should the bounce for Bitcoin be fast we are at ready to jump back into the market.
Currently we are in a position that oppened on the 11th at the dip. I will update here on how it progresses. This is all on spot.
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cleo.finance
Test trading strategies on crypto, stocks, indices, forex with decades of 1-min data.