I’m building a cryptocurrency trading bot that you can follow live on Telegram

The basics

The bot uses a trend-following strategy which consists of entering long positions when two conditions are met:

  1. we are in an uptrend;
  2. the price is temporarily decreasing (i.e. there’s a “dip”).

Enhanced Supertrend Strategy

What I just mentioned is just the most basic usage of the Supertrend that I’ve found online. After experimenting with it for a while, I realized it generated a lot of false positives so I looked for possible improvements.

Meet Traderino

Traderino is running 24/7 trying to apply this Supertrend strategy to Binance futures pairs.

  1. When the price is close to the Supertrend, Traderino also looks at the RSI in order to decide whether to actually open a position;
  2. Take profit and stop loss levels are set according to the timeframe. When a take profit is hit, Traderino can decide to either close the position and take the profits, or activate a trailing stoploss and extend the take profit. This decision is made based on how fast the price has moved in our direction;
  3. While doing all this, he will also keep an eye on the volatility of the BTCUSDT price. Cryptocurrency prices are known to be highly correlated with Bitcoin, and if a sudden drop/spike happens there, Traderino will enter “panic mode”. In this mode, he can suddenly close positions to avoid extreme losses and can stop trading on a given timeframe until volatility levels return to normal.
  1. The side: LONG or SHORT
  2. The leverage (15x, 29x, etc…)
  3. The timeframe where the signal originated, plus the number of candles that this position has been open. For example (4h-3) means that the position has been open for approximately 12 hours
  4. The pair and the entry price
  1. The current profit, in USD and %
  2. The current take profit and stop loss values
  3. The “velocity”: a measure of how fast the price is moving in order to decide whether to close the position or activate the trailing stop loss and extend the take profit

First results

Traderino has been running for several days now, but only doing simulated trades. Some more testing will be needed before he’ll be ready to trade with real money.

Final thoughts

For sure it’s been very fun to develop Traderino and follow his adventures on the markets. It’s clear that this strategy might work well only in strongly trending markets, which probably is not the case with cryptocurrencies right now, and especially this last week.

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