Strategy Description
The "Smash Day" Trading pattern is a candlestick pattern that identifies price action where market participants may have gotten caught offsides. It is effectively a two day pattern, which means that buy setups occur the previous day, and are triggered on the following day if price exceeds (or declines) beyond an extreme of the prior day. In this pattern, the market is caught offsides directionally as the market reverses an outside move from the previous day. It may be possible to enhance this signal using other filters on setups like volatility.
Strategy Rules and Conditions
Buy setups occur when todays' close is lower than the Low from the previous day.
Buy signals occur on the following day if price trades' above the High from yesterday
Sell setups occur when todays' close is higher than the High from the previous day.
Sell signals occur on the following day if price trades' below the Low from yesterday
The Code
The code leverages many of the functions that preload data from CryptoDataDownload and are found in other examples. We add 4 columns to the OHLCV Pandas DataFrame: "buy_setup", "sell_setup", "buy_signal" and "sell_signal". All logic and code is commented so you know exactly what each line is doing. Please feel free to modify to fit your purpose. The script will save a file called "smashDay_strategy.csv" on completion with all data, columns and signals included.
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THE PERFORMANCE OF TRADING SYSTEMS IS BASED ON THE USE OF COMPUTERIZED SYSTEM LOGIC. IT IS HYPOTHETICAL.
PLEASE NOTE THE FOLLOWING DISCLAIMER.
CFTC RULE 4.41: HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL
PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN
EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS,
SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE
DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY
TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. U.S. GOVERNMENT REQUIRED DISCLAIMER: COMMODITY FUTURES
TRADING COMMISSION. FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK.
YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS.
DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES
OR OPTIONS. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES
SIMILAR TO THOSE DISCUSSED ON THIS WEBSITE. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS.