A unique feature on Cryptohopper and essential for algorithmic traders is the Strategy Designer. This is the heart of what algo-traders are looking to automate, technical analysis.
Traders scan the markets with indicators that look at the trends, volume, momentum, and volatility. This can indicate how the markets will move.
Traders usually use tools like TradingView to analyze the markets. They select their favorite indicators to see what they predict. This is a very time-consuming process and something you should want to automate!
To access the Strategy Designer, go to “Strategies” in your dashboard. You will see your own made strategies and the ones you’ve downloaded from the marketplace. Some, not all, strategies that you’ve downloaded are even editable. This allows you to test and tweak them. It’s something you could learn a lot from! Let’s assess the Strategy Designer and run through it. If you’re searching for an in-depth explanation, please check the full documentation about the Strategy Designer.
The idea of the Strategy Designer is that you choose indicators and candlestick patterns, which your Hopper will use to scan the markets to determine if it's time to buy/sell or not. After you've created a strategy, you can test them to see if it needs any tweaks.
Your strategy's success will be determined by the combination of indicators and candlestick patterns, the chart period (candle size) your analyzing, and how "tight" you set it.
The more indicators that need to be met at the same time, the fewer signals your strategy will give. After all, how often does it happen that e.g., six indicators are met at the same time? You can play around with the tightness by configuring a "keep signal for" when configuring your indicator, so it has some more time to overlap with other indicators, or by playing around with the minimum buy/sell signals.
When you’ve selected your first combination of indicators and candlestick patterns, it’s time to put it to the test! After all, finding a good strategy means that you’ll have to test and tweak very often.
Save your strategy and go to “Test”. Please select the right exchange and pair and fire it up!
When your strategy signals too much, it’s time to make it tighter. Do that by choosing more indicators, raising the minimum buy/sell, or setting a lower “Keep signal”. If you don’t have enough buy signals, do the exact opposite.
If your signals are in weird places, for example, right on the top of a price instead of the bottom, it’s time to choose different indicators or patterns. Altering the settings of your indicators could help as well.
For those who use TradingView, watch out with blindly following copying indicator settings from TradingView. If you want to determine a suitable oversold threshold for your RSI, make sure that TradingView uses the same settings as your Strategy Designer. The results will not match otherwise. We receive a lot of questions that EMAs & RSIs do not match TradingView. That always has to do with not copying the settings correctly. In some cases, either the Strategy Designer or TradingView does not offer all matching configurations, making it impossible to complete them completely.
Read more about the Strategy Designer here, and remember: use the Strategy Designer like the professionals do: keep testing and tweaking!