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Optimize Your Trading Strategy With The Right Timeframe

 

 

 

 

One of the most critical aspects of building a successful trading strategy is to optimize the timeframe of your trading strategy to fit the market conditions. The logic of a strategy could be correct, and it could produce good results, but optimizing the setup allows you to achieve much better performances. 

Coinrule allows a wide range of options so you can catch all the opportunities that the market offers. 

How to optimize the timeframe of your trading strategy?

The trading bot will send an order every time a condition is met on the market. One of the most tricky parts of setting up a trading strategy is the choice of the price percentage and the timeframe of the triggers.

Coinrule allows different options to cover all traders’ needs.

 

Static Reference

If you select “from current live price” we use the market price at the moment of launching the rule. The bot uses that price to calculate the price that will trigger the order based on the percentage set.

 

coinrule price condition from current price

 

When the price target calculated is reached on the market, the condition is met and the bot sends the order to the market.

 

bitcoin price increase 10%

 

If the rule has multiple executions, that market price is updated with new market conditions when the rule starts from the beginning.

 

bitcoin new price increase 10%

 

It’s important to underline that the price reference updates only when execution happens, which means that if the price never reaches the first price target, the strategy will not start. You will need to edit the parameters or relaunch it in that case.

When you relaunch the strategy, that will create a new rule with an updated starting price based on the new market conditions.

 

Dynamic Reference – Trading Strategy Time Frame

When you select a specific timeframe, for example, within 1 hour, the rule checks the price changes according to the candlesticks provided by the exchange.

 

coinrule dynamic price reference
Coinrule dynamic price reference

 

In this case, the reference updates every hour to follow the price trend dynamically. Depending on the time frame you selected, the frequency of the update changes accordingly. Of course, if the condition is met during that period, the bot sends out the order to the market.

It’s very easy to verify how it works, and if a condition is met. The price increase or decrease set in the condition must happen within the “candle” related to the time frame chosen.

 

Bitcoin price condition met on a 1-hour time frame
Bitcoin price condition met on a 1-hour time frame

 

As soon as the candle presents the desired price change, the condition is met and the bot fires an order to the market.

to verify if a condition has been met, you can check the chart of the trading pair the rule traded against, and select the timeframe of the chart according to your rule’s setup

In the example below, the rule is set to trigger when ETHBTC has price increase by 2%

 

ETH Rule with price increase

Looking at the price chart you can verify when the rule should trigger.

 

ETHBTC price chart 1 hour
ETHBTC price chart 1 hour

 

Selecting a specific timeframe allows your strategy to follow the trend of the price dynamically.

 

Timeframes of Technical Indicators

In the case of Moving Averages and the RSI, the timeframe is used to define how to aggregate data for calculation. For example a MA(9) in a timeframe of one day stands for the average of 9 daily prices.

 

bitcoin three Moving averages

 

The selection of the timeframe has a direct impact on the frequency of the executions. In general, select 15 min or 1 hour for short term strategies and higher timeframes for long term trading systems.

 

How do we calculate prices?

We use real-time data coming directly from the exchanges. We use prices of specific trading pairs to increase the preciseness of the triggers and the executions. For example, if you set a condition as the following

 

trading pair selected on condition

 

the bot will use prices of the BTCUSDC trading pair on the exchange to verify if a condition is met or not. Using this method allows the trading bot to align the prices in the condition with the price that will be traded when the order reaches the market.

In case you create a trading strategy like the following

 

trading strategy with USDC

 

the trading bot will only check prices of coins that have a trading pair with USDC on the exchange, we will filter out all the others. If you want to increase the possible coins that the rule will trade, you may want to select a wallet related to a currency that offers more trading pairs on the exchange.

Now that you know how to optimize the timeframe of your trading strategy according to your preferences, you are ready to define the orders of your strategy! 

Trade safely!

 

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