LTDP: Long Trade on Drop Price (ETH/USDT, Timeframe 4H)
How it works
The script analyses drawdown periods and negative price variation in order to search for ideal entry points for long positions.
"Has 'buy the dip' really produced profitable results so far?" "How do you define a buy the dip entry?" "What are the best setups to take advantage of a strong market drop?"
Many investors ask themselves these questions when they are buying during a strong drop price. Having an analysis tool that allows you to analyse the profitability of buying during a market drop is indispensable for dealing with it like a pro. We have decided to develop a script that gives you the ability to analyse this market condition in depth.
LTDP is a very light script created with Pine V.5 that has about 50 strings of code. We have developed a user interface capable of adjusting the analysis period from a few days to several years. We have chosen the Rate Of Change indicator to implement the function to analyse the period and the price variation. Finally, we have set the condition with which the script simulates a long entry with the intention of exploiting the volatility and the bearish moment. The trade is closed by stop losses and take profits which can be adjusted by the user interface.
What can you do with LTDP ?
1) Understand if a Buy The Dip approach can be profitable .
Using the interface you can adjust the periods and variations and analyse whether there is a possibility to use this strategy on that market. Understand if in the past this approach has produced positive results on the market under analysis.
2) Understand the best setup to approach a "Buy The Dip" strategy.
Once you understand and set up the best period and variation you can research which take profit and stop loss has worked best so far.
In this test
We used LTDP to answer this question on the ETH/USDT pair with 4H timeframe.
Buying after a drop of -17.5% over 28 hours, is it possible to achieve profitable conditions by opening only long positions with a 3% take profit and a 4% stop loss?
In this study case the result was that offered by the backtest. In this market using this simple strategy, positive results have been produced over the last 4 years.
The initial capital set is €10,000 (You can change this from the "Properties" section of the user interface).
Each individual trade uses 100% of the set capital, in this case €10,000.
The default commission per trade is 0.03% (You can change this in the "Properties" section of the user interface).
User Interface
1) General backtest time settings: Set the history period to be analysed
StartDate: backtest start date
StartMonth: backtest start month
StartYear: backtest start year
EndDate: backtest end day
EndMonth: backtest end month
EndYear: backtest end year
2) Buy The Dip analysis settings: Set the drawdown period and the variation to be taken into account
Period_on_analysis: Drawdown bars analysis
Source: Open, Close, High, Low
PercentDrawDown: The percentage of decline to be observed in Period_on_analysis
3) Money Management Settings: Set Take Profit and Stop Loss
TakeProfit: % Profit
StopLoss: % Loss
Please do not hesitate to contact us for any questions or information.
Disclaimer
Be careful, the past is not a guarantee of future performance, so remember to use the script as a pure analysis tool that cannot be intended as the sole reference in making and implementing financial investment strategies. The developer takes no responsibility for any use other than research and analysis and can in no way be held liable for damages resulting from misuse of this code.
The script analyses drawdown periods and negative price variation in order to search for ideal entry points for long positions.
"Has 'buy the dip' really produced profitable results so far?" "How do you define a buy the dip entry?" "What are the best setups to take advantage of a strong market drop?"
Many investors ask themselves these questions when they are buying during a strong drop price. Having an analysis tool that allows you to analyse the profitability of buying during a market drop is indispensable for dealing with it like a pro. We have decided to develop a script that gives you the ability to analyse this market condition in depth.
LTDP is a very light script created with Pine V.5 that has about 50 strings of code. We have developed a user interface capable of adjusting the analysis period from a few days to several years. We have chosen the Rate Of Change indicator to implement the function to analyse the period and the price variation. Finally, we have set the condition with which the script simulates a long entry with the intention of exploiting the volatility and the bearish moment. The trade is closed by stop losses and take profits which can be adjusted by the user interface.
What can you do with LTDP ?
1) Understand if a Buy The Dip approach can be profitable .
Using the interface you can adjust the periods and variations and analyse whether there is a possibility to use this strategy on that market. Understand if in the past this approach has produced positive results on the market under analysis.
2) Understand the best setup to approach a "Buy The Dip" strategy.
Once you understand and set up the best period and variation you can research which take profit and stop loss has worked best so far.
In this test
We used LTDP to answer this question on the ETH/USDT pair with 4H timeframe.
Buying after a drop of -17.5% over 28 hours, is it possible to achieve profitable conditions by opening only long positions with a 3% take profit and a 4% stop loss?
In this study case the result was that offered by the backtest. In this market using this simple strategy, positive results have been produced over the last 4 years.
The initial capital set is €10,000 (You can change this from the "Properties" section of the user interface).
Each individual trade uses 100% of the set capital, in this case €10,000.
The default commission per trade is 0.03% (You can change this in the "Properties" section of the user interface).
User Interface
1) General backtest time settings: Set the history period to be analysed
StartDate: backtest start date
StartMonth: backtest start month
StartYear: backtest start year
EndDate: backtest end day
EndMonth: backtest end month
EndYear: backtest end year
2) Buy The Dip analysis settings: Set the drawdown period and the variation to be taken into account
Period_on_analysis: Drawdown bars analysis
Source: Open, Close, High, Low
PercentDrawDown: The percentage of decline to be observed in Period_on_analysis
3) Money Management Settings: Set Take Profit and Stop Loss
TakeProfit: % Profit
StopLoss: % Loss
Please do not hesitate to contact us for any questions or information.
Disclaimer
Be careful, the past is not a guarantee of future performance, so remember to use the script as a pure analysis tool that cannot be intended as the sole reference in making and implementing financial investment strategies. The developer takes no responsibility for any use other than research and analysis and can in no way be held liable for damages resulting from misuse of this code.