The DoubleEMACrossoverWithTrend strategy is designed to backtest a trading strategy based on a double exponential moving average (EMA) crossover with a trend filter. Here's a breakdown of how the strategy works:
The strategy uses the freqtrade.strategy.IStrategy class as its base class, indicating that it's compatible with the Freqtrade platform. The populate_indicators method is responsible for populating the required indicators on the input dataframe.
In this case, it calculates three EMAs: a 9-period EMA (ema9), a 21-period EMA (ema21), and a 200-period EMA (ema200).
The populate_buy_trend method determines the conditions for entering a buy trade.
It checks if the fast EMA (ema9) crosses above the slow EMA (ema21), the candle's low price is above the 200-period EMA (ema200), and the candle has volume greater than zero. If all conditions are met, a buy signal is generated. The populate_sell_trend method determines the conditions for exiting a buy trade and entering a sell trade. It checks if the fast EMA (ema9) crosses below the slow EMA (ema21) or if the candle's low price is below the 200-period EMA (ema200). If either of these conditions is true, a sell signal is generated. The strategy also defines some additional parameters:
stoploss: Specifies the stop loss value for the strategy (-0.2 indicates a 20% loss). timeframe: Specifies the optimal timeframe for the strategy (1 hour). trailing_stop: Indicates whether to use a trailing stop loss or not. trailing_stop_positive and trailing_stop_positive_offset: Parameters related to the trailing stop loss functionality. To use this strategy, you would download the necessary historical data, specify the desired time range, and run the backtesting command using Freqtrade. You can also plot the strategy's indicators on the data to visualize its performance.