The MACDStrategy is a trading strategy that uses the Moving Average Convergence Divergence (MACD) indicator and the Exponential Moving Average (EMA) indicator to generate buy and sell signals. Here's a breakdown of what the strategy does:
The strategy defines a minimal return on investment (ROI) for the trades. This means that the strategy aims to achieve a certain level of profit for each trade.
It also sets an optimal stop loss value.
If the price of an asset drops below this value, the strategy will sell the asset to limit potential losses.
The strategy uses three parameters to configure the MACD indicator: fast period, slow period, and signal period. These parameters determine the sensitivity and smoothness of the indicator's lines. It also uses the EMA indicator with a slow period parameter. The EMA is used as a trend confirmation tool. The populate_indicators function calculates the MACD and EMA values based on the provided parameters and adds them to the dataframe. The populate_buy_trend function generates buy signals based on specific conditions. It checks if the MACD is positive, the closing price is above the EMA, and the MACD line is above the signal line. The populate_sell_trend function generates sell signals based on specific conditions. It checks if the MACD line is below the signal line and the closing price is below the EMA. Overall, the strategy aims to identify potential buying opportunities when the MACD is positive, the price is above the EMA, and the MACD line is above the signal line. It aims to sell when the MACD line crosses below the signal line and the price is below the EMA.