Disclaimer: I’m not a financial advisor or technical analysis expert. This post is purely for educational purpose. I do not recommend the use of technical analysis as a sole means of trading decisions.
- One of the essential skills I had learned in a recent time is technical analysis, where we predict the price movements using historical price charts and market statistics trends.
- So, I decided to spend the weekend automating the technical analysis on cryptocurrencies trading and applying it to the trading strategy.
- Some indicators are focused primarily on identifying the current market trend, including support and resistance areas. In contrast, others are focused on determining the strength of a trend and the likelihood of its continuation. Commonly used technical indicators and charting patterns include trendlines, channels, moving averages, and momentum indicators.
- Three essential indicators I personally use for trading are:
- So I decided to automate the technical analysis using the above three indicators to identify a decision-making trend using the Python language.
- I used the Binance crypto exchange websocket for a live 30-minute candle data feed.
- We then used the TA-LIB library to parse the np_closes data for the “N” number of candles into the technical indicators.
- Then used each indicator result to identify the buy or sell trend.
- You can customize it accordingly and craft a strategy to either perform a trade or notify whenever the strategy pattern matches.
Example of some patterns:
Bullish/Bearish MACD crossover, RSI undervalued.
- Here’s the example strategy I use whenever MACD is about to crossover from below(signal line) to up(histogram line) to identify the bullish/bearish trend across the multiple pairs on different candle intervals and notify it over the discord channel.