- Trading Strategies
- Get Started
- Exchanges Guidelines
- Trading Tips
Multi Time Frame Dip Scalping On Reversals
A multi time frame dip scalping seeks to catch a short term rebound of coins during a downtrend on a medium-term time frame. Short-term momentum is used to catch the buy signal for the strategy.
First Condition, The Buy-Signal
The rule buys the coin that meets the following condition.
- RSI lower than 35. The time frame selected is the 4 hours to catch coins that are in a medium-term downtrend.
- Price above the MA(100). The price above the MA(100) in a short-term time frame provides the buy-signal.
Second Condition, The Sell-Signal
The bot presents two options for selling the coin bought, in profit or alternatively in loss.
- Take Profit. The take profit is set to 5%. Buying a coin in oversold conditions is very risky. Setting up a larger take profit helps compensate that risk.
- Stop-loss. The percentage of the stop loss is set to 3%. A tighter stop loss in percentage terms compared to the take profit allows increasing the reward/risk profile of the strategy.
How It Works
The example above shows a live trade that the rule performed on August 24th. The shaded area in the chart indicates RSI lower than 35 on the 4 hours time frame. When the price breaches the moving average, it accelerates immediately on the upside. The rule takes profit at 5%, that is arbitrary, you can set it as you prefer according to your preferences.
We suggest keeping a ratio of 1.5 between the take profit and stop loss to improve the strategy’s overall return.
How To Build This Strategy With Coinrule
You can select the wallet of your convenience as the quote currency of the multi time frame dip scalping strategy, depending on the allocation of your portfolio.
Do you want to learn more about how Coinrule works? Have a read here.
Create your own rule with technical indicators now!
All information contained in this post should be independently verified and confirmed. I can’t be found accountable for any loss or damage whatsoever caused in reliance upon such information. Please be aware of the risks involved with trading cryptocurrencies.