MACD Zero-Line and Signal-Line Trend Entry Strategy
Summary
This Freqtrade example defines a simple long-only trend signal using MACD. It calculates the MACD line, signal line, and histogram, then enters when MACD is above zero and above its signal line. It exits when MACD falls below the signal line. The accompanying explanation treats the entry and exit conditions as bot signals and does not add other price-based rules.
The strategy specifies a five-minute timeframe, a stop loss of 30% below entry, and a tiered minimal return on investment schedule that declines with holding time. These are configuration defaults and can be overridden by the trading configuration. The document supplies implementation logic but no backtest, performance evidence, parameter optimization, or comparison with alternatives. Its signals and risk settings therefore describe a template, not demonstrated profitability; results would depend on the asset, execution, and configuration used.
Key ideas
- A long entry requires MACD to be above both zero and its signal line.
- The exit signal occurs when MACD is below its signal line.
- The strategy calculates the MACD line, signal line, and histogram.
- Its default timeframe is five minutes, with a configurable stop loss and return schedule.
- The document provides no performance evaluation or evidence of profitability.
Tags
Full text
# ASDTSRockwellTrading.py
```py
# --- Do not remove these libs ---
from freqtrade.strategy import IStrategy
from typing import Dict, List
from functools import reduce
from pandas import DataFrame
# --------------------------------
import talib.abstract as ta
import freqtrade.vendor.qtpylib.indicators as qtpylib
class ASDTSRockwellTrading(IStrategy):
"""
trading strategy based on the concept explained at https://www.youtube.com/watch?v=mmAWVmKN4J0
author@: Gert Wohlgemuth
idea:
uptrend definition:
MACD above 0 line AND above MACD signal
downtrend definition:
MACD below 0 line and below MACD signal
sell definition:
MACD below MACD signal
it's basically a very simple MACD based strategy and we ignore the definition of the entry and exit points in this case, since the trading bot, will take of this already
"""
INTERFACE_VERSION: int = 3
# Minimal ROI designed for the strategy.
# This attribute will be overridden if the config file contains "minimal_roi"
minimal_roi = {
"60": 0.01,
"30": 0.03,
"20": 0.04,
"0": 0.05
}
# Optimal stoploss designed for the strategy
# This attribute will be overridden if the config file contains "stoploss"
stoploss = -0.3
# Optimal timeframe for the strategy
timeframe = '5m'
def populate_indicators(self, dataframe: DataFrame, metadata: dict) -> DataFrame:
macd = ta.MACD(dataframe)
dataframe['macd'] = macd['macd']
dataframe['macdsignal'] = macd['macdsignal']
dataframe['macdhist'] = macd['macdhist']
return dataframe
def populate_entry_trend(self, dataframe: DataFrame, metadata: dict) -> DataFrame:
"""
Based on TA indicators, populates the buy signal for the given dataframe
:param dataframe: DataFrame
:return: DataFrame with buy column
"""
dataframe.loc[
(
(dataframe['macd'] > 0) &
(dataframe['macd'] > dataframe['macdsignal'])
),
'enter_long'] = 1
return dataframe
def populate_exit_trend(self, dataframe: DataFrame, metadata: dict) -> DataFrame:
"""
Based on TA indicators, populates the sell signal for the given dataframe
:param dataframe: DataFrame
:return: DataFrame with buy column
"""
dataframe.loc[
(
(dataframe['macd'] < dataframe['macdsignal'])
),
'exit_long'] = 1
return dataframe
```Shown in full with attribution under the source's licence. Licence: GPL-3.0
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.