Cryptohopper shows multiple Technical Analysis every week, click here to read them and get inspired by our analysts! Do you want to play frist with technical indicators in a chart to check when a buy signal will be given? We explain how charting works here. Cryptohopper also sends technical analyses by mail, so don't forget to subscribe to our newletter.
Let's start by designing our own strategy. Click on "New Strategy" on the top right corner to get started.
Naming: On the left-hand side, you have the possibility of giving your strategy a name and description. We have named our strategy: "Cryptohopper Example Strategy" and wrote in the description: "An example strategy". After this step has been completed, click "save". If you click on the little green arrow just right of the button Save, two options will popup:
Save & close: use this if you would like to save the strategy and close it to continue working on it another time. Save as copy: use this if you would like to create a copy of your current strategy.
Image: You can now choose an image for your strategy by clicking on the "select image" button. You can either choose a default image or upload your own. To upload your own image, you have to select "upload image" and then "upload logo". Please make sure that your image has the following size: "600px X 430px".
Indicators: It is now time to choose the right indicators for your strategy. Technical indicators are chart analysis tools that can help traders enter a position. At Cryptohpper, we offer more than 36 customizable indicators. To select an indicator, click on Indicators and search for the indicator you desire. If you would like to use an indicator to enter a position, make sure the signal is set to "buy". If you would like to use the indicator to exit a position, make sure to set the signal to "sell". The Strategy Designer supports up to 16 Technical Indicators and/or Candle Patterns.
Candlestick Patterns: Aside from "indicators", Cryptohopper also offers 91 Candlestick patterns. These are technical analysis tools that are used to predict price direction. Unlike the indicators, the candlestick patterns cannot be changed from buy to sell and vice versa. They are either a position entry pattern or a position exit pattern.
Building a strategy: When you wish to build a strategy, it is vital to have a clear picture in mind of what you would like to build. Let's create a strategy that buys the dips of an uptrending market.
To identify a bullish market, we can use the MESA on the daily chart.
This is how the MESA looks like on a chart when using the "Charts" tab:
The MESA will indicate a bullish market as long as the cloud is green.
This is how it looks like on when using Cryptohopper's "Charts" tab:
This is the timeframe the indicator operates on (in our case, 1 day). You can choose any timeframe between 1 day and 1 minute.
If you would like to use the indicator for an entry point, make sure it is set to "buy". If you would like to use the indicator as an exit point, make sure to set it to "sell".
OHLCV Value, Fast Limit, Slow Limit:
are unique settings that you can set for this indicator (each indicator has specific editable settings).
Keep signal for:
This option is used if you would like to keep a signal for a specific number of candles. Imagine you selected multiple indicators and 2 of them have to give a buy signal. Since not all indicators will signal a buy simultaneously, the buy (or sell) signal will remain for X candles. The time the signal will be shown depends on your candle size and the number of candles chosen. In our case, it is not necessary for the MESA.
We have marked the signal as necessary because we want this indicator to indicate a buy each time we enter a position. This option is useful, for example, when you have a strategy made up of 6 indicators, but you only need to use 4 signaling a buy simultaneously to enter a trade. If you would like to have one out the 4 indicators active at all times just tick the option "necessary signal".
Let's now add an indicator that can find the bottoms of this uptrend. William's %R is an oscillator that can find overbought or oversold zones. We will add this indicator on the 1-hour chart to find the oversold zones of the uptrend.
This is how William's % R looks like on a chart under "Charts":
The indicator will identify a bottom each time the black line falls below the lower band at -80. The green circles indicate the bottom on the graph. Williams %R can find some great buy points in a bullish market. However, it has some significant drawbacks. In the case of a market crash, the indicator would indicate a buy continuously. As a result, you may enter a position, only to have the market continue falling a lot further. Therefore, we will have to combine it with yet another indicator.
This is how the Indicator looks like on our platform under "Charts":
Let's now add an indicator that can complement the major flaws found in William's %R. A crossover of the 1 and 15 EMA can work well in identifying when the trend is bullish again. This indicator produces "buy signals" each time the fast EMA crosses over the slow EMA, as it can be seen on the chart.
This is how the EMA crossover looks like on the chart when configured under "Charts":
This is how the EMA crossover looks like on Cryptohopper's "Charts" tab:
This is how the strategy currently looks like on the chart on the "Charts" tab:
We have chosen to keep William's %R signal for 10 candles, as it is very rare for Williams %R to be oversold while at the same time, the EMA crossover indicates a bullish signal. The vertical green line at the left represents the moment the MESA turned bullish on the daily chart.
We have set the minimum "buy" signals to 3 out of 3. This means that all of the indicators are necessary for your hopper to make a trade.
This feature is useful if you have many indicators, but not all are essential to the strategy, and some are substitutes. For example, you consider the MACD as a substitute for the EMA and not essential to the strategy, then you will have 3 out 4 minimum buy signals. You will also still have the MESA and Williams %R set as necessary, while the EMA will no longer be necessary. In the end, you will need the MESA and Williams %R to indicate a buy signal, and then you need either the MACD or the EMA to indicate a buy for your hopper to open up a position.
Lets now also add a sell indicator to this strategy to close out positions with it. The MACD on the hourly chart should work well here. To create a sell indicator instead of a buy one, simply click on the green "buy" button in the menu of the particular indicator, this will change your signal to "sell".
This is how the indicator should look on Cyptohopper's "Charts" tab.
This is how the final version of the strategy should look on Cryptohopper's "Charts" tab:
This is how the final version of the strategy looks like on the "Charts" tab:
Buttons and Symbols
Let's now look at the symbols on the right-hand side of each indicator:
Their meaning in order from left to right:
The "!". This is the symbol of a necessary signal. As long as this is green, a signal from this indicator is required to open up a position. You can use this if you have a strategy comprising multiple signals, with some being essential and others not. You can thus mark the essential signals as necessary.
The gears symbol. This opens up the menu for a specific indicator. You can also open up this menu by clicking on the title of the indicator.
This duplicates an indicator, with the specific settings that you have customized. For example, this feature is useful if you want to have the same version of the MACD as both a buy signal and a sell signal.
You can use th "X" to remove an indicator/candlestick pattern.
The hamburger button on the left of an indicator can be used to drag strategies higher or lower. This will not have any effect on the strategy's performance. It is just for aesthetics and to help you order your strategies however you see fit.
You can select an indicator by ticking the empty box to the left of its signal type. When ticked, this box should become blue. You can then use the buttons at the top to either duplicate the indicator or remove it.
Test: You can use the Test Button to quickly backtest your strategy. Please note that this testing feature is not as in-depth and customizable as the one from the backtesting page. You have the possibility of choosing your exchange, market (coin pair, for example, USDT - BTC). After choosing your exchange and market, click "Test" to get started! On the bottom left, you can see the total number of both Buy and Sell signals generated by the strategy. On the bottom right, you can see each individual signal given. And if you click on TA, you can see the values of all of the indicators.
To get back to the "designer" menu where we see an overview of all of our indicators and candlestick patterns, simply click on "Designer".
Code: You can use the Code feature to edit your indicators using the JSON code. Please be careful when using this feature, as you may disrupt your strategy if you make a mistake while coding.
To get back to the designer, simply click the button designer again.
Delete: You can use the "Delete" button to delete your strategy if you no longer needed. Please bear in mind that this action cannot be undone, and you will need to create it again.
Close: Finally, when you are satisfied with your strategy, you can click the "close" button to get back to the designer. Make sure you save before closing!