The "EMA_Trailing_Stoploss" strategy is an implementation of a trading strategy for backtesting purposes. It is designed to generate buy and sell signals based on exponential moving averages (EMAs) and trailing stop loss. Here's a breakdown of the important parts of the strategy:
The strategy uses the "freqtrade.strategy.IStrategy" class as a base for implementation.
The "minimal_roi" variable defines the minimum return on investment (ROI) required for a trade to be considered profitable.
In this case, it is set to 0.01, which means a trade should have a minimum ROI of 1% to be considered profitable.
The "stoploss" variable sets the maximum acceptable loss for a trade. If the trade reaches a loss of 1%, it will be automatically stopped and closed. The "trailing_stop" variable is set to True, enabling a trailing stop mechanism. This means that as the trade becomes profitable, the stop loss level will be adjusted to lock in profits. The "trailing_stop_positive" variable sets the trailing stop distance. In this case, it is set to 0.001, which means the stop loss will be adjusted to lock in profits once the trade reaches a 0.1% profit. The "timeframe" variable sets the timeframe for the data used in the strategy. In this case, it is set to '1h', indicating that the strategy operates on hourly data. The "populate_indicators" function is responsible for calculating the necessary indicators for the strategy. It calculates the EMA with a time period of 3 and 5, and creates a signal called "go_long" which is 1 when the EMA with a time period of 3 crosses above the EMA with a time period of 5. The "populate_buy_trend" function generates buy signals. It sets the "buy" column to 1 when the "go_long" signal crosses above 0. The "populate_sell_trend" function generates sell signals. It sets the "sell" column to 0, indicating that no sell signals are generated by this strategy. Overall, this strategy uses EMAs and a trailing stop mechanism to generate buy signals when the shorter EMA crosses above the longer EMA, and it applies a trailing stop to protect profits as the trade progresses.