BacktestRookies

Average Down

This strategy has been published for a Pyramiding tutorial on the Backtest Rookies website.

For a full overview of the code and an introduction to Pyramiding check out our site.

Summary
The code example will create a simple script that allows us to average down whenever our portfolio is down x%. The idea will be to bring our average cost down so that we can still exit with a profit when conditions improve. With this in mind, the strategy shall also have a simple take profit exit at x% above our average price.

Inputs

  • Target Loss to Average Down (%): This is the target percentage level will trigger us to average down. In other words, if we have a close below this level from our average buying price, we will average down.
  • Target Take Profit: A standard take profit percentage level. Use this to set how much profit you will target.
  • % Of Current Holdings to Buy: Is the number of shares/contracts we will aim to buy when we average down. 50 will mean we buy 50% of our current holdings. So if we have 100 shares, then we buy 50 when we average down.
  • SMA Period: Defines our SMA lookback period. Our strategy will enter the first/initial position when we have a close above our SMA level.


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Comments

Hi I am trying to develop this for bitcoin. I am having some trouble to make more entries every lets say 200 dollars. Could you help ?
Many thanks
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swing_sailor Minimal_Est
@Minimal_Est, I'm trying pretty the same thing... and it sucks. I'm trying to get the average price -2% of the old avg and not just the next entry -2% from avg(how it is at the moment)
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