Spanish Cross

Strategy Intent

Trading Criteria Details
Market Suitability Bull market when volatility is at its highest
Difficulty Advanced
Strategy Type Trend trading
Take Profit
DCA
Positive DCA
Pending Orders
Trailing Stop Loss
Published
Demo Server

Note:

  1. Click the cloud icon to view the demo server for this strategy;
  2. Note if the cloud icon is showing in red it means the demo server is not available right now;

Strategy Overview

  • Slow and Steady, Wins the Race. The intent of these settings is to create a set and forget closed loop system that buys trading pairs on an upward trend and takes them through a trading workflow designed to maximise profits throughout the entire trade cycle. The idea being to back the winners and toss the losers quickly.
  • It is not that quick though, it does take time depending on market conditions at the time, but it has proven a profitable strategy during testing.
  • “Spanish Cross” is an advanced strategy and as such you are best to run it in a test bot and understand it fully before enabling it in a live trading bot.
  • The Spanish Cross strategy is a long term, low risk trading strategy designed to scalp profits from small upward trends. So even though you may be in a Bear market and there are long term downward trends this strategy picks up profits from the small upward trends that occur as the trading pairs retrace upward and then drop again.
  • This strategy can also be used to clear long term deep DCA logs via a dilution method it introduces that is described below.

Entry Criteria

  • The strategy entry criteria is part of a defined workflow as follows:
    • Stage 1 Pairs Log
    • Stage 2 DCA log
    • Stage 3 Pending Log
  • Stage 1 of the workflow is the Pairs Log:
    • The buy strategy purchases trading pairs on a bullish upward trend so these pairs typically start out negative usually like -1 to -2 dollars or less and then start to go into profit.
  • Stage 2 of the workflow is the DCA log:
    • DCA in this strategy is used primarily to do Positive DCA.
    • If you are lucky some of these trading pairs in the Pairs Log will exceed the Pairs profit target and at 4% profit will go into Positive DCA (Anti-DCA or Anti-Martingale) and attempts to improve profits by backing the winners and increasing our position size on the trade.
    • Those pairs that do go into Positive DCA and do a DCA buy will initially show as a loss in the DCA log as DCA is buying into an uptrend, so the average cost increases, but these pairs will go green and sell off if the bullish uptrend continues.
    • It is also using Purchase same number of coins per level for the DCA buys.
  • Stage 3 of the workflow is the Pending Orders loop:
    • If the trading pairs fail to sell off out of the Pairs log, Stage 3 of the workflow, outlined in the exit criteria below, will pick them up and deal with them.
  • It uses trailing buy to ensure we buy as close to the bottom of the trade cycle as possible.

Trade Management

  • The strategy applies the 2% and 10% rules of trading.
  • Position size is limited to 2% of risk capital per trade.
  • Only 5 trading pairs are active at any time to ensure no more than 10% of total risk capital is employed in trading at any time.
  • A trailing stop loss is employed rather than a fixed stop loss.
  • Take profit is employed to prevent loss of profits.

Exit Criteria

  • This strategy exit criteria is part of a defined workflow as follows:
    • Stage 1 Pairs Log
    • Stage 2 DCA log
    • Stage 3 Pending Log
  • Stage 1 of the workflow is the Pairs Log:
    • Once in the pairs log the trading pairs tend to start to go into positive territory as they were purchased in a bullish upward trend.
    • If bullish market conditions prevail you wind up with a screen of all green trading pairs. This potentially gives you more capital to trade with as they sell off out of the Pairs log.
    • If they fail to sell off out of the Pairs log, Stage 3 of the workflow will pick them up and deal with them.
  • Stage 2 of the workflow is the DCA log:
    • Note Positive DCA may put the pair at a temporary loss as it increases your average cost.
    • If the upward trend continues the trading pair should quickly recover from this loss or it will attempt to DCA in the normal manner to reduce its average cost and hopefully bring it back into profit.
    • Any trading pair that doesn't sell or can't be recovered will be picked up by Stage 3 of the workflow which tosses the losing trades using Pending Orders.
  • Stage 3 of the workflow is the Pending Orders loop:
    • Any pairs that do not sell at any stage of the trade workflow will get picked up every 4 hours by the Pending Orders loop.
    • The Pending Orders settings create pending Limit Orders on the exchange at a target price equal to the GAIN percentage you set.
    • Because the pending orders are sitting on the exchange they will start to be picked up and sold clearing them over time and thus providing a dilution of the pairs that haven't previously sold. This automated dilution method is unlike other dilution methods where pairs get broken down into tiny portions, i.e. 1/25th, and those tiny portions are manually sold off individually.
    • As a result of these exchange sales of the pending orders you will start to see your Trading Balance get increased at random intervals as these sales occur.
    • Alternatively the bot continues to buy pairs, some of which are the same trading pairs that are sitting on the exchange as pending orders.
    • The bot will look at the combined profit of both the recently purchased pair and the pending order and if this exceeds 0.25% these trading pairs pending orders will be canceled and the pairs combined to sell off at a profit in the Pairs Log. This allows those trading pairs to be recorded in the Sales Log.
    • This dilution method relies on having sufficient capital to keep purchasing pairs so that the Pending pairs will clear over time as more of that pair are purchased and sold. So stage 1 combined with stages 2 and 3 provide this working capital over time without the need to inject fresh funding to keep this closed loop system working.
    • It stops the trading pairs sitting around in the DCA log doing nothing and stopping you from trading by tying up all your funds.
  • Following this the trade workflow completes and the closed loop repeats.

Strategy Tips

  • The trick to using Spanish Cross effectively is a whitelist, only you can decide what goes into your whitelist of trading pairs. Only trade coins that you don't mind holding - because they will accumulate over time.
  • One tweak you can do to the Spanish Cross settings is to set the pending to trigger at a loss amount, rather than a time setting. A suggested option would be to set the loss amount to -4.
  • The key to this strategy is to ensure you do not overextend yourself by getting your max trading pairs and initial cost right to suit your trading budget.
  • Use the DCA calculator we provide to work these values out covering at least 4 levels of DCA for all your pairs. Once you have those values enter them into this strategy. The DCA calculator also ensures you have a 50/50 split on your trading budget to ensure you have sufficient budget for the sell side of this strategy.
  • Spanish Cross makes use of Pending Orders. A Pair in the Pending Orders exists solely on the exchange you are trading on. The bot has nothing to do with it. You can no longer count the trading pairs as part of your holdings as you have created a Limit Sell Order at your GAIN price and have in effect given them to the exchange to sell them for you on your behalf. If you check your funds on the exchange you will see that the exchange considers them as “In Order” until they are either cancelled or sold off. If sold off you will be given the proceeds of the sale in the base currency you are trading in less the exchange fees. The bot will however monitor any Pending Order it creates. We have the DEFAULT_combined_cancel_pending_trigger in the pairs config and its equivalent in the DCA config set in order to attempt to cancel the pending orders and return them to the pairs/dca log if combined profit of current trades for the same trading pairs reaching 0.25%.
  • Spanish Cross makes use of the DEFAULT_combined_cancel_pending_trigger to attempt to cancel pending sales and return them to the pairs/dca log if combined profit reaches the set level. In our case 0.25% If the Pending Order didn't cancel and the coin sold off from Pairs or DCA then it is likely that the combined profit didn't reach that trigger point. Alternatively the Coin may have sold off before the Pending Order got cancelled in which case the Pending Order would have been recreated.
  • If you are trading on the Bittrex exchange, please note that Bittrex has a policy of canceling any orders older than 28 days.
  • As this strategy uses Pending Orders you need to upgrade ProfitTrailer to 2.1.8 or beyond. We recommend you always upgrade to the latest version in any case.


TOP


  • spanishcross.txt
  • Last modified: 14 days ago
  • by cryptocoyn