Investing in the cryptocurrency market can be complicated and requires well-conceived strategies to maximize income and limit risk. One of the most popular platforms for automated buying and selling of cryptocurrencies is Cryptohopper, which allows customers to create and optimize customized buying and selling techniques. The only technical analysis strategies used on Cryptohopper include the MACD (Moving Average Convergence Divergence) indicator and the Strategia MACD e Stocastico con Cryptohopper. In this guide, we will explore how to integrate these indicators to create a predominant method of buying and selling with Cryptohopper.
What is Cryptohopper?
Cryptohopper is an automated trading platform that allows customers to create their own cryptocurrency buying and selling bots. Founded in 2017, the platform offers a wide range of technical analysis tools, indicators and market signals that allow customers to execute trades primarily based on pre-defined or customized strategies. Cryptohopper is ideal for every amateur and experienced investor due to its intuitive interface and excellent features.
Introduction to MACD and Stochastic Indicators
MACD Indicator
Moving Average Convergence Divergence (MACD) is a trend momentum indicator that shows the relationship between two protection price moving averages. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. The result is the MACD line. The nine-day MACD EMA, called the “signal line”, is then plotted on top of the MACD line, which could act as a trigger for buy and sell indicators.
Stochastic Oscillator
The Stochastic Oscillator is a momentum indicator that compares a particular security’s remaining charge to a relatively large number of its positive duration charges. The sensitivity of the oscillator to market actions can be reduced by adjusting the time period or by converting the average of the result. The indicator ranges from zero to 100 and is used to detect overbought or oversold situations.
Advantages of Combining MACD and Stochastic Indicators
A combination of MACD and Stochastic indicators can offer a more comprehensive view of the market and allow investors to make more informed decisions. The MACD can help to recognize the trend and strength of the trend, while the Stochastic Oscillator can indicate potential reversal points. When used together, these indicators can verify each other’s indicators, increasing the accuracy of change inputs and outputs.
Cryptohopper Account Setup
Before you can start using the Strategia MACD e Stocastico con Cryptohopper, you need to create an account and configure your trading robot. Here’s a step-by-step guide:
- Sign up: Visit the Cryptohopper website and sign up for an account.
- Connect your exchange: Connect your Cryptohopper account with your chosen cryptocurrency store.
- Create a new bot: Once your store is connected, create a brand new trading bot and configure the primary settings.
- Select Indicators: Go to the “Indicators” stage and upload the MACD and Stochastic Oscillator for your approach.
- Configure indicator settings: Adjust MACD and Stochastic sign settings according to your buying and selling preferences.
Creation of MACD and Stochastic strategies
Step 1: Configuring the MACD indicator
- Fast EMA Setup: Typically, a 12-period EMA is used as a common fast-shift rate.
- Set a slow EMA: A 26-period EMA is usually used because slow shifting is common.
- Set the signal line: The signal line is often the nine-period EMA MACD.
Step 2: Configure the Stochastic Oscillator
- Set %K Period: The default location is 14 durations.
- Set %D Period: The default location is three durations (common offset %K).
- Set smoothing: Default is 3 duration (%K line smoothing).
Step 3: Combination of Indicators
To create a mixed approach using MACD and Stochastic on Cryptohopper, follow these steps:
Define the terms of purchase:
- The MACD Line crosses above the Signal Line.
- The Stochastic Oscillator is below 20 (indicating an oversold condition).
Define the terms of sale:
- The MACD Line crosses below the Signal Line.
- The Stochastic Oscillator is above 80 (indicating an overbought situation).
Back Testing the Strategy
Before deploying your stay marketplace strategy, it’s important to test it using old listings. Cryptohopper provides a backtesting feature that allows you to check your method against market conditions. Here’s how to do it:
- Go to Backtesting: Go to the backtesting section of your Cryptohopper dashboard.
- Select Your Bot: Select the bot you have configured with the Strategia MACD e Stocastico con Cryptohopper.
- Set a time period: Choose a historical date on which you want to test your approach.
- Run Backtest: Run a backtest and view the results.
Analysis of Backtest Results
Once the backtest is complete, Cryptohopper will provide significant results, including:
- Profit and loss: Average profitability of the method.
- Win Rate: Percentage of successful trades.
- Drawdown: Maximum loss qualified during the backtest.
- Trade history: An accurate record of all trades made during the duration of the backtest.
Use these implications to improve your method. If the backtest shows promising effects, you can continue buying and selling.
Strategy Deployment in Live Trading
After back-testing and refining your approach, it’s time to set it up in the live market. Here are the stairs:
- Activate your bot: Go to your bot settings and activate it to continue buying and selling.
- Monitor Performance: Regularly monitor the overall performance of your bot and make changes as necessary.
- Risk Management: Ensure you have proper threat control in the region, along with loss prevention orders and role sizing.
Tips for Successful Trading
- Stay Informed: Monitor news and updates from the market as outside elements can affect your trades.
- Regular reviews: Regularly evaluate and regulate your method primarily based on overall performance and market conditions.
- Diversification: Don’t put your entire price range into one approach or asset; diversify to develop danger.
FAQs
1. What are the MACD and Stochastic indicators?
MACD (Moving Average Convergence Divergence): The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. It is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. The result is the MACD line, which is then compared to the signal line—a 9-period EMA of the MACD.
Stochastic Oscillator: The Stochastic Oscillator is a momentum indicator that compares a security’s closing price to its price range over a specified period. It ranges from 0 to 100 and helps identify overbought or oversold conditions.
2. How does the MACD indicator work?
The MACD indicator works by highlighting changes in the strength, direction, momentum, and duration of a trend. When the MACD line crosses above the signal line, it generates a buy signal, suggesting that the momentum is turning bullish. Conversely, when the MACD line crosses below the signal line, it generates a sell signal, indicating a bearish trend.
3. How does the Stochastic Oscillator work?
The Stochastic Oscillator compares the closing price of a security to its price range over a specific period. A reading above 80 indicates that the security may be overbought, while a reading below 20 suggests that it may be oversold. Traders use these readings to anticipate potential price reversals.
4. Why combine MACD and Stochastic indicators in a strategy?
Combining the MACD and Stochastic indicators provides a more comprehensive view of market conditions. The MACD helps identify the direction and strength of a trend, while the Stochastic Oscillator helps pinpoint potential reversal points. When used together, these indicators can confirm each other’s signals, improving the accuracy of trading decisions.
5. How do I configure MACD and Stochastic indicators on Cryptohopper?
To configure the MACD and Stochastic indicators on Cryptohopper:
- MACD Configuration:
- Set the Fast EMA to 12 periods.
- Set the Slow EMA to 26 periods.
- Set the Signal Line to 9 periods.
- Stochastic Oscillator Configuration:
- Set the %K Period to 14 periods.
- Set the %D Period to 3 periods.
- Set the Smoothing to 3 periods.
Conclusion
The combination of Strategia MACD e Stocastico con Cryptohopper can create a powerful buying and selling method that utilizes the strengths of both indicators. By following this complete manual, you can install, backtest and install an effective buying and selling bot on Cryptohopper, which can potentially increase your profitability in the volatile cryptocurrency market. Remember to constantly display and refine your method to adapt to changing market conditions and maintain a competitive edge.
