Development of the Ultimate Crypto Trading Strategy: The MATRIX

Buy and Sell signals generated by the trading strategy

Our Story

We are cryptocurrency miners and ‘hodlers’ since 2013, with unwavering confidence in the technology behind it. We’d always thought that it would be a life-changing event. And we were right. We went from “broke” to making shit loads of money and all the way back to bitter nothing. If you are lucky, you probably haven’t experienced what if feels to be high on cash and then fall very deep low, but let me reassure you, it is a nasty feeling. Then we wondered, what the hell did we do wrong? Or better say, what didn’t we do right! The answer was dead simple: We had no experience in trading, we were overwhelmed by emotions and we didn’t use any trading strategy. Hence, we were doomed to fail from the beginning.

In order to build an all-in-one profitable trading strategy, we had to start from zero. The one thing we learned is that your goal for financial gain cannot be achieved without discipline and consistency. Our prime focus was to absorb as much info as possible regarding trading and coding by doing an extensive self-study, which consequentially took us to the next level.

One of the secrets to being successful from a trading perspective is to have an indefatigable and undying thirst for information and knowledge. As Bruce Lee once said: “Learning is never cumulative; it is a movement of knowing which has no beginning nor end”. So, we adapted what was useful, rejected what was useless, and added our own preferences based on our mindset. We were totally committed to be the best. Our goal was never to lose money again! Of course, this is an illusion, as no single strategy is correct all the time.

Therefore, the final trading strategy was based on the following key elements:

• The avoidance of risk is more important than absolute profit. Do not anticipate and do not move without market confirmation. Being a little late in your trade is your indication if you are right or wrong.
• Offering simplicity and practicality, for those that do not have the time to trade 24/7.
• Believe in analysis and not in forecasting. Trading is a skill for those who are smart and gambling for those who are not.

In conclusion, we are absolutely thrilled to finally release this trading strategy after one year of extensive back testing and optimization. The script was supposed to be for personal use only, but because Tradingview has helped us a lot in this process, we want to share it with all of you and give something back to this amazing community.

User Guidelines

The MATRIX Ultimate Crypto Position Strategy should be used as follows.

• The trading strategy was designed and optimized for trading cryptocurrencies only; furthermore it works best on established high market cap cryptocurrencies that have a clear trend such as:
  BTCUSD
  ETHUSD
  LTCUSD
  XRMUSD
  EOSUSD
  ADAUSD
  DASHUSD
  ETCUSD
• The trading strategy is based on swing/position methodology. The script must therefore be used on daily timeframe candles only (1D).
• Use USD trading pairs only (e.g. use ETHUSD instead of the ETHBTC) since the individual trend is captured more effectively and therefore gives better results.

Indicators

The MATRIX:Ultimate Crypto Position Strategy is based on the following indicators:

• Ichimoku Cloud; acts as the leading indicator.
• Volume; without strong volume , a market move is not valid.
• MACD and Vortex; both being used as confirmation indicators.
• Choppiness index; avoids trading in choppy markets.
• Bullish/ Bearish Regular Divergences in combination with RSI to spot tops and bottoms.
• Simple and Exponential Moving Averages; prevents trading against the trend.

The trading strategy is easy to use, trend based and without repainting, meaning once a signal has been made it is permanent and that no future data is used in the decision making. It detects the trend and filters out market noise based on more than 10 technical indicators. ONLY when all indicators align with each other the algorithm prints a BUY or SELL signal. The trading strategy provides high probability trading signals and minimizes risk! This script aims to capture the profit from longer term trending moves and by doing so filters out non-substantial trends and avoids the associated risks with these trades.

Features

• Automatically generated Buy / Sell alerts in the form of a label.
• NO Repaint once candle is closed.
• SAFEGUARD; custom built-in security prevents trading when the price is out of equilibrium.
• Customizable Display for the Ichimoku cloud indicator display.
• Position Finder Tool: Visual representation of the strategy.

Position Finder Tool

The Position Finder Tool

The Position Finder is a visual representation and additional feature of the “MATRIX Ultimate Crypto Position Strategy” and it should therefore be used alongside this script.

The Position Finder is a tool that allows the user to see multiple triggers at the same time on a single chart of the “MATRIX Ultimate Crypto Position Strategy”.The Position Finder consists of 3 parts, namely an entry, a re-entry and an exit part (from top to bottom). Each of these three fields is made up of several green, black or red horizontal lines in which each line corresponds to a specific trigger.

An entry or re-entry signal is valid once all individual triggers turn dark GREEN at the same time (for the top and middle matrix fields respectively). When this happens a bright GREEN vertical line is formed. The main trading strategy script will also print “Long Entry” label. While BLACK color indicates that a certain trigger is not valid. Yes, we know. It sounds very complicated, but once you understood it, we promise it will be the simplest and dare we say, an interesting tool to use.

An exit signal is made once a single trigger turns RED. The main trading strategy script will also print a RED colored “Long Exit” label. While BLACK color indicates that the exit signal is not triggered.

For those who are interested in the rationale of why a certain entry or exit signal was made a list with triggers can be found below. It contains the complete set of triggers for the entry, re-entry and exit signals from top to bottom.

Entry Trigger List:

1. Evaluation of short term trend: Ichimoku kinko hyo indicator, conversion line related to base line.
2. Evaluation of longer term trend: Ichimoku kinko hyo indicator, price related to the ichimoku cloud.
3. Confirmation of the longer term upward trend: Ichimoku kinko hyo indicator, lagging span related to ichimoku cloud.
4. Confirmation of short term upward trend: Ichimoku kinko hyo indicator, price related to conversion line and base line.
5. Evaluation of longer term trend projection: Ichimoku kinko hyo indicator, projected ichimoku cloud shape.
6. Confirmation of short term trend: Ichimoku kinko hyo indicator, lagging span related to the price.
7. Confirmation of short term trend: Ichimoku kinko hyo indicator, lagging span related to the price (alternative method).
8. Confirmation of the longer term trend: Ichimoku kinko hyo indicator, lagging span related to ichimoku cloud (alternative method).
9. Confirmation of the longer term trend: Moving averages.
10. Confirmation of sufficient momentum: Macd indicator.
11. Evaluation of overbought or oversold conditions in the price: RSI indicator.
12. Evaluation of price equilibrium: Ichimoku kinko hyo indicator, price related to ichimoku cloud , conversion line, base line.
13. Confirmation of general trend: Vortex indicator.
14. Evaluation of price equilibrium: Ichimoku kinko hyo indicator, price related to ichimoku cloud , conversion line, base line (alternative method).
15. Evaluation of volatility: Choppiness index indicator.
16. Evaluation of volume: Volume indicator.

Re-Entry Trigger List:

1. Confirmation of short term upward trend: Ichimoku kinko hyo indicator, price related to conversion line and base line.
2. Evaluation of short term trend: Ichimoku kinko hyo indicator, conversion line related to base line.
3. Confirmation of the longer term upward trend: Ichimoku kinko hyo indicator, conversion line and base line related to the ichimoku cloud.
4. Confirmation of sufficient momentum: Macd indicator.
5. Confirmation of sufficient momentum: Macd indicator (alternative method).
6. Evaluation of overbought or oversold conditions in the price: RSI indicator.
7. Confirmation of sufficient momentum: Macd indicator (alternative method).
8. Confirmation of general trend: Vortex indicator.
9. Confirmation of the longer term upward trend: Ichimoku kinko hyo indicator, price related to the ichimoku cloud.
10. Evaluation of bullish / bearish territory.

Exit Trigger List:

1. Confirmation of short term trend reversal: Ichimoku kinko hyo indicator, conversion line related to base line.
2. Confirmation of neutral territory: Ichimoku kinko hyo indicator, price related to the ichimoku cloud.
3. Confirmation of bearish territory: Ichimoku kinko hyo indicator, price related to the ichimoku cloud.
4. Evaluation of extremely overbought conditions in the price: RSI indicator.
5. Confirmation of bearish divergence signals.

Backtest results

Below are the back test results. Keep in mind that this strategy is quite conservative resulting in few long positions. These results are therefore no guarantee for the future.

Back test results: (Long trades only, signal to signal, order size: 100% of equity, commission fee 0.1%, period: start of chart)

Contact

If you learned something new today and found value, please give us a like to show your support! We’d really appreciate it. This script is invite-only, message us on tradingview for instant access.

https://www.tradingview.com/u/Cryptonerds/#published-scripts

Reminder: Use this trading strategy at your own risk and trade responsibly. We are not responsible for any financial loss using this strategy.