This strategy is based on the popular Bollinger Bands indicator. It buys when the current price is below the lower band and sells when either the profit target or stop-loss level has been reached or when the current price is above the upper band.

Bollinger Bands is a technical indicator used to measure a market’s volatility and identify “overbought” or “oversold” conditions. It is composed of two standard deviations placed around a Simple Moving Average.

Once the price of an asset gets closer to the upper bands it tends to be considered as overbought, while if it reaches the lower band, it will be considered as oversold. On Quadency, you can configure the moving Average period as well as the Standard Deviation.

You can learn more about the Bollinger Bands indicator here.


General Settings:

  • Exchange: The exchange to run this bot on.

  • Market: The pair (symbol) to trade. Quadency's standard convention is Base/Quote. For example, in BTC/USD, BTC is base, and USD is quote.

  • Starting Capital: The maximum amount of Quote currency available to the bot for trading. When backtesting, this value can be any amount. However, in live trading mode, the bot will stop trading if funds available in the Quote currency wallet become insufficient. Click here to view the minimum order size guide.

Strategy settings:

  • Candle Timeframe: select the chart time frame for this strategy. The timeframe can go from 1 minute up to daily. Lower time frames result in more trades than higher, and vice versa.

  • Moving Average Period: this is the number of candles to lookback to calculate the moving average (the average price at the end of the selected candle timeframe)

    • if you select 20, the moving average will be the average price over the last 20 candlesticks.

  • Band Std Dev Multiplier: This setting will help adjust the upper-lower band by narrowing it using multipliers smaller than one or to widen it using a multiplier >1.

  • Exit Condition: Select the exit condition for the current position (more details below)

Strategy Description

  • Buy Condition: Price is below the lower band - buy using 100% of available capital

  • Sell Condition: Profit Target or Stop-Loss (option 1), or Indicator Confirmation (option 2)

  1. Close the position when Profit Target or Stop-Loss is reached.

  2. Close when price crosses above the upper band (stop-loss and profit target will be ignored).

Order Types

  • This strategy sends all orders as Market orders. It is advisable to trade pairs with sufficient liquidity to avoid slippage. Thinly traded markets can result in worse than ideal fills, causing the profits to be smaller than expected.

Tips:

  • Shorter candle intervals result in more frequent trades than longer ones

  • Tighter profit target and wider stop-loss will result in smaller but frequent profits

  • The bot evaluates the position at the end of each candle interval, it is possible for the bot to not place any order if the conditions are met within the candle timeframe but not at the end.

  • Be sure to back-test your settings before starting live to make sure the strategy performs well on the market and the timeframe selected

  • Any profits from trades are automatically reinvested in subsequent trades. For example, if you start the bot with $100, and the first trade results in a $2 profit, the next trade will use $102, and so on.

Did this answer your question?