All the best trading strategies involve multiple indicators and leverage the benefit of each of them. The following is an optimised strategy based on and the indicator.
The are among the most famous and widely used indicators. They can suggest when an asset is oversold or overbought in the short term, thus provide the best time for buying and selling it.
A strategy buying dips can work well during times of uptrend. Downtrends will result in a drawdown for the P&L of the strategy. The suggested approach minimises the drawdowns, ensuring that the system trades only when it's more likely to close the trade in profit.
The Indicator plays a key role in this strategy. It acts as a confirmation that the asset is currently in an uptrend. On the other hand, it acts as a stop if market conditions deteriorate. The strategy uses an Indicator set to 288 periods to provide a longer-term view on market conditions, not being heavily dependent on short-term .
The best time frame for this strategy based on our backtest is the 4-hr. The 1-hr can work well with three times more trades, on average. As trades increase, the profitability decreases. Yet again, this is the confirmation that trading more does not mean gaining more.
To make the results more realistic, the strategy assumes each order to trade 30% of the available capital. A trading fee of 0.1% is taken into account. The fee is aligned to the base fee applied on Binance, which is the largest cryptocurrency exchange.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.