Volatility Stop Strategy (by Coinrule) by Coinrule
By Coinrule
Performance Metrics
- Author: Coinrule
- Symbol: BINANCE:ETHUSDT
- Timeframe: 2 hours
- Net P&L: +91.30 NONE (+87.23%)
- Win Rate: 48.9%
- Profit Factor: 1.344
- Max Drawdown: 111.56 NONE (45.76%)
- Total Trades: 45
- Sharpe Ratio: 0.51
Description
Traders often use the volatility stop to protect trades dynamically, adjusting the stop price gradually based on the asset's volatility.Just like the volatility stop is a great way to capture trend reversals on the downside, the opposite applies as well. Therefore, another useful application of the volatility stop is to add it to a trading system to signal potential trend reversals to catch a good buy opportunity. ENTRY- When the price crosses above the Volatility StopEXIT- When the price crosses below the Volatility StopFor this strategy, the Volatility stop's multiplier is set to 3 to allow more flexibility to the trade. The strategy is designed for medium-term trades.Based on the backtest result from a sample of crypto trading pairs, the most profitable time frame is the 2-hr. The strategy works well with both crypto-to-crypto and crypto-to-fiat pairs. To make results more realistic, a trading fee of 0.1% is added to the script. The fee is aligned to the base fee applied on Binance.