Backtesting is a great system that allows users to create their strategies without putting their own crypto at risk. Earlier, we went over all of the features of the backtesting bot. Now let’s come up with a strategy.
Creating a Strategy
Currently, BravoBot only supports RSI as an entry rule. You can learn more about the RSI indicator here. However, more rules are being tested as of writing this.
We’re going to give you a simple strategy that uses RSI as an entry rule and a grid trading strategy as an exit. You can learn more about the grid trading strategy here.
This strategy should not be used with real BUSD unless you’re confident. This is just an example, test it, change it, adapt it, and think of this strategy as a starting point.
The way RSI trading often works is that if the RSI is below 25, then the asset is oversold, and a price reversal should come. We will be using this knowledge in setting up our entry strategy.
Head over to the backtest bot creation screen to begin.
Making the Backtesting Bot
- Name the bot.
- Set the imaginary wallet balance to be 1000 BUSD. Theoretically, you can set this to whatever you want it to be, but since this is an example, you can adjust it after.
- Set the fixed buy order size % to be “3.2”. Since we’re going to be using the grid strategy, it will use 3.2% of your imaginary wallet per grid level. Later on, we’re going to use 30 grid levels. 3.2% wallet of wallet X 30 grid levels = 96% of virtual wallet utilized.
- Set up the backtesting length. BravoBot has around 365 days’ worth of data to backtest with. However, the longer the backtest, the longer it will take for the results to come back to you. This part is up to you. The fewer days the bot has to fake trade, the less time it will take to finish.
- Select the coins you wish to trade. You can use the quick-select buttons to pick which coins you want to trade or manually pick. This part is up to you.
- Create an entry strategy where the indicator is RSI with the settings: condition “<“ (less than), value 25, timeframe 1min, candles 14. The bot will scan your whole coin list for coins with less than 25 RSI on the 1-minute timeframe using the 14 candles to calculate the RSI (default RSI settings also use 14 candles).
- Set the exit strategy to be “Grid Placement.” Leave the placement method as linear. The target profit percentage is 1 (%), the number of re-buy grid levels is 30, the percentage difference between each level in terms of price is 1.5 (%), the percentage spending difference per level is 0, and lastly leave the last option as linear.
- Press on the “Inspect Gridlines” to preview how the grid levels are going to be structured. If you see any red that means the grid exceeds the wallet amount or the order sizes are too small, and you have to adjust either the grid or the buy order size at the top. This grid is set up so that the coin will have to drop 46.5% to reach the bottom of the grid.
Now you just run the bot and wait until it finishes trading. Once the backtest is complete, you want to view the report. You want to analyze how it performed. After that, duplicate the bot, play around with the settings, and see if you can make it perform better.
After you find bot settings that you feel confident in using with your own funds the next step is to set up your API key.