Bitcoin Long Strategy with Daily Alligator and Four-Hour Momentum

Summary

This Bitcoin strategy combines a daily trend filter with a four-hour momentum trigger. It calculates Williams Alligator lines from smoothed price averages and uses the Awesome Oscillator (AO), defined as the difference between short and longer averages of median price. A long entry occurs when AO crosses above its five-period average while price is above all three daily Alligator lines. The document’s prose also describes skipping two trades after a winner, while the script implements a skip counter and a stop based on the higher of the entry-price loss threshold and the four-hour Alligator jaw.

The stated backtest covers Bitcoin trading from January 2021 to May 2024, with 50% of equity allocated per trade, commission, and slippage included. It reports 118 trades, a 24.58% win rate, a profit factor of 1.71, and net profit of 62.28%. These are historical results presented by the author, not independent validation. The written methodology contains discrepancies: it refers to Stochastic RSI even though the source uses AO, and describes an AO condition that is not identical to the script’s crossover rule. Performance may vary with market, timeframe, execution costs, and settings.

Key ideas

• Daily Alligator lines filter entries to periods when price is above the higher-timeframe trend measures.
• A long signal requires the four-hour Awesome Oscillator to cross above its five-period average.
• The exit stop is set at the higher of a price-based loss threshold and the four-hour Alligator jaw.
• The script uses a skip counter after profitable trades, though its exact bar-by-bar effect should be checked when reproducing results.
• Reported historical performance is limited to the stated backtest period and assumptions.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.