The DIV_v2 strategy is a trading strategy implemented in Python using the Freqtrade library. Here is a short description of what the strategy does:
It uses the RSI (Relative Strength Index) indicator with a time period of 14 to determine overbought and oversold conditions in the market. The strategy detects bullish divergence between the closing price and RSI.
Bullish divergence occurs when the price makes a lower low while the RSI makes a higher low.
This indicates a potential trend reversal.
The strategy also detects hidden bearish divergence, which occurs when the price makes a higher high while the RSI makes a lower high. This indicates a potential continuation of a downtrend. When a bullish divergence is detected and the RSI is below 30 (indicating oversold conditions), and the volume is positive, the strategy generates a "buy" signal. The strategy has a minimum return on investment (ROI) target of 0.05 (5%). It includes a trailing stop feature that dynamically adjusts the stop-loss level as the price moves in favor of the trade. The strategy plots the RSI values on a separate subplot and marks the divergences with scatter points. Overall, the DIV_v2 strategy aims to identify potential buying opportunities based on bullish divergences and oversold conditions indicated by the RSI indicator. However, it doesn't define specific conditions for selling, so the sell signals are not implemented in this strategy.