The "TechnicalExampleStrategy" is a backtesting strategy implemented in Python using the Freqtrade library. This strategy aims to generate buy and sell signals based on the Chaikin Money Flow (CMF) indicator. Here's a breakdown of the important parts of the strategy:
The strategy uses a minimal return on investment (ROI) of 0.01, which means it aims to make a profit of at least 1% on each trade.
The stop loss is set at -0.05, indicating a maximum acceptable loss of 5% before selling.
The strategy is designed to work with ticker data at a 5-minute interval, meaning it operates on short-term price movements.
The "populate_indicators" function calculates the CMF indicator using a period of 21 and adds it as a new column called 'cmf' to the input dataframe. The "populate_buy_trend" function identifies buy signals when the CMF value is less than 0 (indicating selling pressure). The "populate_sell_trend" function identifies sell signals when the CMF value is greater than 0 (indicating buying pressure). Overall, this strategy attempts to capture potential buying opportunities when there is selling pressure (negative CMF) and selling opportunities when there is buying pressure (positive CMF) based on the chosen parameters.