Buy The Dips in Bull Market (by Coinrule)During a Bull market, beating the market, it's challenging. Trading strategies that buy the dips represent one of the best approaches to surf the trend and optimize the returns.
The main obstacle is to gauge the dip's magnitude properly and set up the take profit level accordingly. The RSI is an excellent tool to catch price drops as it adjusts the entry to the asset's current volatility. Nevertheless, using the RSI as an indicator for exit is not an optimal solution in trending markets as it may end up with two scenarios:
The price reverts before reaching overbought conditions. That is the case when the trend is not that strong at that moment. Leaving the position open could result in missed profit opportunities.
The price rebounds strongly, leading the RSI quickly in overbought conditions too soon so that the strategy sells too early.
One interesting option is to combine a trigger based on the RSI to catch the dip and then use two moving averages to spot the right time to seel when the price is entirely back on-trend.
The Setup
The entry-signal comes when the RSI is lower than 35 and the MA9 is above the MA200, indicating that the asset is currently in an uptrend.
The sell-signal comes when at the same time, the price is above the MA9, and the MA9 is above the MA50.
This setup was optimized on the 15-min time frame after over 150 backtests.
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.
Buythedips
Multi Time Frame Buy the Dips (by Coinrule)Buying the dips is a relatively easy automated trading strategy that can return impressive profits, especially during uptrend times. Not all price drops are for buying, though. This trading system is based on a multi time frame buy-the-dip approach to optimize each trade.
The strategy catches sudden price drops on a 1-hr time frame when the price increases significantly in the last 12 hours. During steep uptrends, profit-taking price actions result in flash crashes that provide great opportunity to enter at convenient prices.
Buy Condition
The setup of the script is optimized on a 30 min time frame. You can adjust the parameters to fit different time frames.
The system gets a buy signal when
- the price drops 1% from the two previous candles (1 hour time frame = two 30-min candles)
- the price is up 3% from the last 12 hours (twenty-four 30-min candles equal the desired time frame)
Sell Condition
Each trade comes with a stop loss of 3% and a take profit of 4%.
This setup has been optimized, running over 150 backtests on more than 20 different crypto trading pairs.
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.
Buy the Dips (by Coinrule)Taking your first steps into automated trading may be challenging. Coinrule's mission is to make it as easy as possible, also for beginners.
Here follows the best trading strategy to get started with Coinrule. This strategy doesn't involve complex indicators, yet was proved to be effective in the long term for many coins. Results seem to be improved when trading a coin vs Bitcoin.
The strategy buys the dips of a coin to sell with a profit. A stop-loss protects every trade.
Crypto markets offer high volatility and, thus, excellent opportunities for trading. Excluding times of severe downtrend, buying the dip is a simple and effective long-term trading strategy. The buy-signal is set to a 2% drop in a 30-minutes time frame.
Each trade comes with a take profit and a stop loss. Both set at 2%.
You can adjust these percentages to the market volatility as an advanced setup. You can backtest the outcomes using the backtesting tool from Tradingview
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.
BuyTheDipWell, I often had arguments in online forum with a guy who claimed to time the market perfectly without any technical analysis or prior experience. He often claimed that technical analysis does not work and it only works when you trade on other's emotions. He also argued that algorithmic trading isn't profitable - if so, everyone would do that. Hence, I thought I will convert his idea to algorithm.
In his own words, the strategy is as below:
Chose an instrument which is in full uptrend.
Wait for the panic sell and buy the dip
Once market recovers back exit immediately
It seems to do just fine with indexes. But, not so good when it comes to stocks.
