Bitcoin - MA Crossover Strategy

14 בספט׳ 2020

Before You Begin:
Please read these warnings carefully before using this script, you will bear all fiscal responsibility for your own trades.

• Trading Strategy Warning - Past performance of this strategy may not equal future performance, due to macro-environment changes, etc.
  
• Account Size Warning - Performance based upon default 10% risk per trade, of account size $100,000. Adjust BEFORE you trade to see your own drawdown.
  
• Time Frame - D1 and H4. H4 has a lower profit factor (more fake-outs, and account drawdown), D1 recommended.
  
• Trend Following System - Profitability of this system is dependent on STRONG future trends in Bitcoin (BTCUSD).
  

Default Settings:
This script was tested on Daily and 4 Hourly charts using the following default settings. Note that 4 Hourly exhibits higher drawdowns and lower profit factor, whilst Daily appears more stable.

• Account Size ($): 100,000 (please adjust to simulate your own risk)
  
• Equity Risk (%): 10 (please adjust to simulate your own risk)
  
• Fast Moving Average (Period): 20
  
• Slow Moving Average (Period): 40
  
• Relative Strength Index (Period): 14
  

Trading Mechanism:
Trend following strategies work well for assets that display the tendency of long-trends. Please do not use this script on financial assets that have a historical tendency for mean reversion. Bitcoin has historically exhibited strong trends, and thus this script is designed to capitalise on that behaviour. It is hoped (but we cannot predict), that Bitcoin will strongly trend in the coming days.

LONG:

• Enter Long - When fast moving average (20) crosses ABOVE slow moving average (40)
  
• Exit Long - When fast moving average (20) crosses BELOW slow moving average (40)
  

SHORT:

• Enter Short - When fast moving average (20) crosses BELOW slow moving average (40)
  
• Exit Short - When fast moving average (20) crosses ABOVE slow moving average (40)
  

Risk Warnings:
Do note that "moving averages" are a lagging indicator, and as such heavy drawdowns could occur when a trade is open. If you are trading this system manually, it is best to avoid emotions and let the system tell you when to enter and exit. Do not panic and exit manually when under heavy drawdown, always follow the system. Do not be emotional. If possible, connect this to your broker for auto-trading. Ensure that your risk per trade (Equity Risk) is SMALL enough that it does not result in a margin-call on your trading account. Equity risk must always be considered relative to your total account size.

Remember: You bear all financial responsibility for your trades, best of luck.