crypto_trader/docs/user_manual/strategies.md

Strategy Guide

Learn how to create, configure, and manage trading strategies in Crypto Trader.

What is a Strategy?

A trading strategy is a set of rules that determine when to buy and sell cryptocurrencies. Strategies analyze market data and generate trading signals.

Pre-built Strategies

Crypto Trader includes several pre-built strategies:

RSI Strategy

Uses the Relative Strength Index to identify overbought and oversold conditions.

• Buy Signal: RSI below 30 (oversold)
• Sell Signal: RSI above 70 (overbought)
• Parameters: RSI period (default: 14)

MACD Strategy

Uses Moving Average Convergence Divergence for trend following.

• Buy Signal: MACD crosses above signal line
• Sell Signal: MACD crosses below signal line
• Parameters: Fast period, slow period, signal period

Moving Average Crossover

Uses two moving averages to identify trend changes.

• Buy Signal: Short MA crosses above long MA
• Sell Signal: Short MA crosses below long MA
• Parameters: Short MA period, long MA period

Confirmed Strategy (Multi-Indicator)

Requires multiple indicators (RSI, MACD, Moving Average) to align before generating signals. This significantly reduces false signals by requiring confirmation from 2-3 indicators.

• Buy Signal: When majority of indicators agree on buy signal
• Sell Signal: When majority of indicators agree on sell signal
• Parameters:
  • RSI period, oversold, overbought thresholds
  • MACD fast, slow, signal periods
  • MA fast, slow periods, MA type (SMA/EMA)
  • Minimum confirmations required (default: 2)
  • Which indicators to require (RSI, MACD, MA)

Divergence Strategy

Detects price vs. indicator divergences which are powerful reversal signals. Works exceptionally well in ranging markets.

• Buy Signal: Bullish divergence (price makes lower low, indicator makes higher low)
• Sell Signal: Bearish divergence (price makes higher high, indicator makes lower high)
• Parameters:
  • Indicator type: RSI or MACD (default: RSI)
  • Lookback period for swing detection (default: 20)
  • Minimum swings required (default: 2)
  • Minimum confidence threshold (default: 0.5)

Bollinger Bands Mean Reversion

Trades mean reversion using Bollinger Bands. Buys at lower band in uptrends, exits at middle band. Works well in ranging markets.

• Buy Signal: Price touches lower Bollinger Band in uptrend
• Sell Signal: Price reaches middle band (profit target) or touches upper band (stop loss)
• Parameters:
  • Bollinger Bands period (default: 20)
  • Standard deviation multiplier (default: 2.0)
  • Trend filter enabled (default: True)
  • Trend MA period (default: 50)
  • Entry threshold (how close to band, default: 0.95)
  • Exit threshold (when to take profit, default: 0.5)

Consensus Strategy (Ensemble)

Combines signals from multiple strategies with voting mechanism. Only executes when multiple strategies agree, improving signal quality through ensemble methods.

• Buy Signal: When minimum number of strategies agree on buy
• Sell Signal: When minimum number of strategies agree on sell
• Parameters:
  • Strategy names to include (None = all available)
  • Minimum consensus count (default: 2)
  • Use performance-based weights (default: True)
  • Minimum weight threshold (default: 0.3)
  • Strategies to exclude

Strategy Management Page

The Strategy Management page provides a comprehensive interface for creating, editing, and managing all your trading strategies.

Accessing Strategy Management

1. Click on Strategies in the navigation menu
2. You'll see a table listing all your strategies with:
   • Strategy name and description
   • Strategy type
   • Trading symbol
   • Timeframes
   • Status (Enabled/Disabled)
   • Paper Trading mode
   • Action buttons (Start, Stop, Edit, Delete)

Creating a Strategy

1. Navigate to the Strategies page

2. Click Create Strategy button

3. The strategy dialog has three tabs:

   Basic Settings Tab:

   • Name: Give your strategy a descriptive name (required)
   • Description: Optional description
   • Strategy Type: Select from RSI, MACD, Moving Average, Confirmed, Divergence, Bollinger Mean Reversion, Consensus, DCA, Grid, or Momentum
   • Symbol: Trading pair (e.g., BTC/USD)
   • Exchange: Select the exchange (required)
   • Timeframes: Select one or more timeframes (1m, 5m, 15m, 30m, 1h, 4h, 1d)
   • Paper Trading Mode: Toggle for paper trading (recommended for testing)

   Parameters Tab:

   • Configure strategy-specific parameters
   • Parameters vary by strategy type
   • Default values are provided for all parameters
   • See strategy-specific sections below for parameter details

   Risk Settings Tab:

   • Position Size (%): Percentage of capital to use per trade
   • Stop Loss (%): Maximum loss percentage before exit
   • Take Profit (%): Profit target percentage
   • Max Position Size: Optional maximum position size limit

4. Click Create to save the strategy

The strategy will appear in the strategies table. New strategies start as Disabled - you must enable and start them manually.

Managing Strategies

Starting a Strategy

1. Find the strategy in the table
2. Click the Start button (green play icon)
3. The strategy status will change to Enabled and it will begin generating signals

Stopping a Strategy

1. Find the running strategy in the table
2. Click the Stop button (red stop icon)
3. The strategy will stop generating new signals

Editing a Strategy

1. Click the Edit button (pencil icon) for the strategy
2. Modify any settings in the dialog
3. Click Update to save changes

Note: Strategy type cannot be changed after creation. You must create a new strategy with a different type.

Deleting a Strategy

1. Click the Delete button (red trash icon)
2. Confirm the deletion in the dialog
3. The strategy and all its configuration will be permanently deleted

Strategy Types

DCA (Dollar Cost Averaging)

Invests a fixed amount at regular intervals (daily, weekly, or monthly). Ideal for long-term accumulation.

Parameters:

• Amount: Fixed investment amount per interval
• Interval: Daily, weekly, or monthly
• Target Allocation: Target portfolio allocation percentage

Grid Trading

Places buy orders at lower price levels and sell orders at higher levels. Profits from price oscillations.

Parameters:

• Grid Spacing: Percentage between grid levels
• Number of Levels: Grid levels above and below center price
• Profit Target: Profit percentage to take

Momentum

Trades based on price momentum with volume confirmation. Enters on strong upward momentum, exits on reversal.

Parameters:

• Lookback Period: Period for momentum calculation
• Momentum Threshold: Minimum momentum to enter
• Volume Threshold: Volume increase multiplier for confirmation
• Exit Threshold: Momentum reversal threshold

Strategy Configuration

Basic Settings

• Name: Descriptive name for your strategy
• Symbol: Trading pair (e.g., BTC/USD)
• Timeframe: Data timeframe (1m, 5m, 15m, 1h, 4h, 1d)
• Enabled: Turn strategy on/off

Parameters

Each strategy has specific parameters:

• RSI Strategy: RSI period, overbought threshold, oversold threshold
• MACD Strategy: Fast period, slow period, signal period
• Moving Average: Short period, long period, MA type (SMA/EMA)
• Confirmed Strategy: RSI, MACD, and MA parameters, minimum confirmations
• Divergence Strategy: Indicator type, lookback period, confidence threshold
• Bollinger Mean Reversion: Period, std dev, trend filter settings
• Consensus Strategy: Strategy selection, consensus threshold, weighting options

Risk Settings

• Position Size: Amount to trade per signal
• Max Position: Maximum position size
• Stop Loss: Percentage, price level, or ATR-based dynamic stop
  • ATR-based stops: Automatically adjust stop distance based on market volatility
  • ATR Multiplier: Multiplier for ATR calculation (default: 2.0)
  • ATR Period: Period for ATR calculation (default: 14)
• Take Profit: Profit target
• Trend Filter: Optional ADX-based trend filter to avoid trading in choppy markets

Multi-Timeframe Strategies

Strategies can use multiple timeframes:

1. Primary timeframe for signal generation
2. Higher timeframes for trend confirmation
3. Lower timeframes for entry timing

Strategy Scheduling

Strategies can be scheduled to run:

• Continuous: Runs on every new candle
• Time-based: Runs at specific times
• Condition-based: Runs when conditions are met

Managing Strategies

Enabling/Disabling

• Toggle strategy on/off without deleting
• Disabled strategies don't generate signals
• Useful for testing multiple strategies

Editing Strategies

1. Select the strategy
2. Click "Edit"
3. Modify parameters
4. Save changes

Deleting Strategies

1. Select the strategy
2. Click "Delete"
3. Confirm deletion

Strategy Performance

Monitor strategy performance:

• Win Rate: Percentage of profitable trades
• Total Return: Overall return
• Sharpe Ratio: Risk-adjusted return
• Max Drawdown: Largest peak-to-trough decline
• Number of Trades: Total trades executed

Best Practices

1. Backtest First: Always backtest strategies before live trading
2. Start Small: Use small position sizes initially
3. Monitor Performance: Regularly review strategy results
4. Adjust Parameters: Optimize based on performance
5. Use Paper Trading: Test changes in paper trading first

Creating Custom Strategies

For advanced users, you can create custom strategies:

1. See Developer Guide
2. Extend the BaseStrategy class
3. Implement signal generation logic
4. Register your strategy