The MA (Moving Average) strategy is a trading strategy that uses two exponential moving averages (EMA) to generate buy and sell signals. The strategy aims to capture trends in the market by identifying crossovers between the shorter-term EMA (ema8) and the longer-term EMA (ema21). Here's a breakdown of how the strategy works:
The strategy calculates the 8-period and 21-period exponential moving averages using the TA-Lib library.
The "populate_indicators" function adds the calculated EMAs to the dataframe.
The "populate_entry_trend" function identifies the points where the ema8 crosses above the ema21, indicating a potential buying opportunity.
It marks these points with a value of 1 in the "enter_long" column of the dataframe. The "populate_exit_trend" function identifies the points where the ema8 crosses below the ema21, indicating a potential selling opportunity. It marks these points with a value of 1 in the "exit_long" column of the dataframe. Additionally, the strategy includes the following parameters and settings:
Minimal ROI: The strategy aims for a minimal return on investment (ROI) of 0.15 (15%) for the entire trading period. Stoploss: The strategy has a fixed stop loss of -0.025 (-2.5%) to limit potential losses. Trailing Stop: The strategy uses a trailing stop, which means that the stop loss level adjusts dynamically as the price moves in the desired direction. Timeframe: The strategy is designed to work on 1-hour candlestick data. Overall, the MA strategy uses the crossover of two EMAs to generate buy and sell signals, aiming to capture trends in the market while managing risk through the use of a stop loss.