For the past couple of days, I've been testing Gekko BTC trading bot, executing a few trades running the bot on my laptop, ending to build a VPS to run Gekko trading bot on a cloud. As you can see for right now - I'm fully determined to master this trading bot.

To master trading like a pro some should learn basic technical analytics, in today's article, I will speak about using Relative Strength Index (RSI) for crypto trades. I believe RSI is one of the easiest ways to trade cryptos. 

Disclosure: I'm not a financial advisor and I don't give you any advice, I'm just sharing my own experience. Investments in stocks, funds, bonds or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset. 

RSI (Relative Strength Index)

The relative strength index (RSI) is a momentum indicator developed by noted technical analyst Welles Wilder, that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. It is primarily used to attempt to identify overbought or oversold conditions in the trading of an asset.

Backtest

For following backtests I will use data for BTC/EXP on Poloniex.com exchange for a time period (2018-02-01 00:00 - 2018-02-19 16:59)

Importing data for backtesting on Gekko

Importing data for backtesting on Gekko

Once the import is done, we are ready to start backtesting. I will start with a default RSI backtest offered out of the box:

  • Candle size:1 hour
  • Warmup period: 10 hours
  • Interval: 14
  • Persistence: 1

 

Backtest BTC/EXP 1 hour candle

Backtest BTC/EXP 1 hour candle

Nice, with failing market by -13% and with just 4 trades our simulated profit would increase by 7.7% in just 19 days. Results are pretty impressive. I mean +7.7% in a falling market. Awesome. 

I like the above chart for 75%, let me explain - those 2 red dots means bot have sold EXP back to BTC, while 2 green dots means bot have bought EXP. I don't like the first green dot, when bot has bought just shortly before the dip. I can explain this simple, probably the warm-up period of 10 hours wasn't enough. Not sure. What I really like - bot have sold at the peak twice.

Well, as we can see from the graph above there are more ups and downs in the chart, let's see if more trades would happen if we would adjust Gekko trading bot

  • Candle size:30 minutes
  • Warmup period: 5 hours
  • Interval: 14
  • Persistence: 1

Backtest BTC/EXP 30 minutes candles

Backtest BTC/EXP 30 minutes candles

Wow, in the same 13% falling market bot have made simulated profit +17% with just 8 trades

Using 30 minutes candle size Gekko trading bot has noticed 2 more large ups and downs.

17% gains in just 19 days is Awesome, but let's try push harder and see what could we get from 15 minutes candle size

  • Candle size: 15 minutes
  • Warmup period: 2 hours 30 minutes
  • Interval: 14
  • Persistence: 1

Backtest BTC/EXP 15 minutes candles

Backtest BTC/EXP 15 minutes candles

Still good, better than 1-hour candles, but worse than 30-minute candles, let's see what will happen with 5-minute candle sizes:

  • Candle size: 5 minutes
  • Warmup period: 50 minutes
  • Interval: 14
  • Persistence: 1

Backtest BTC/EXP 5 minutes candles

Backtest BTC/EXP 5 minutes candles

Trying to scalp more would give a negative -2.32% growth. last but not least, let's try 1-minute candle sizes:

  • Candle size: 1 minute
  • Warmup period: 10 minutes
  • Interval: 14
  • Persistence: 1

Backtest BTC/EXP 1 minute candles

Backtest BTC/EXP 1 minute candles

Surprisingly but trying to scalp each movement might work, and actually gives a simulated profit of almost 8% in the same falling market. Amazing.

Now, you have some basic idea how to trade with RSI method in Gekko trading bot, also now we know that changing candle sizes can change the total profit drastically.

Do your backtesting for each coin, before you are planning to execute live trades. In fact, I would recommend backtesting at least 3 months of data. Also, I wouldn't encourage to trade with all of your capital. Play with some play money you are comfortable to lose.

Disclosure: I'm not a financial advisor and I don't give you any advice, I'm just sharing my own experience. Investments in stocks, funds, bonds or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset. 

Speaking of me, I'm planning to put on the experiment the live trade 30-minute candle size, sure I'm not planning to trade with 100 BTC (wish I had so much, hopefully, someday), for now, I'm planning to experiment with 0.0035 BTC/EXP trades until March 10. Let's see will it help in my goal to trade up to 0.05 BTC

Make sure to subscribe to web push notifications or subscribe below with your e-mail address to find out more.

Get the latest investment article in your inbox

Join more than 160 subscribers and get notified once the newest article is is out. Topics covered: dividend income, peer to peer lending, crypto currencies and more
* indicates required

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit Privacy policy