In the ever-evolving world of crypto trading, finding a strategy that yields consistent results can feel like striking gold. Moreover, you can find thousands of profitable strategies when browsing the web, YouTube, or Medium—or at least they claim to be profitable.
A couple of weeks ago, I stumbled across a strategy that is known as the “Hyper Scalper.” A strategy that pretends to work best on lower chart timeframes.
We took the strategy, dissected it, implemented it into the CryptoKnowledge platform, and also did heavy backtesting. Want to know the results? Let’s get into it!
Hyper Scalper Strategy
Okay, as a first step, we will introduce the technical indicators that are used in the strategy. Overall, the strategy heavily relies on moving averages (exponential in this case). On top of that, the ADX is basically used as a safety indicator. Here are the details.
Indicator #1: 200 Exponential Moving Average (EMA200)
A pivotal tool for determining overarching trends, it showcases the average asset price across the last 200 periods.
Indicator #2: 100 Exponential Moving Average (EMA100)
Slightly more responsive than the EMA200, this indicator reflects the average price over a 100-period span.
Indicator # 3: 25 Exponential Moving Average (EMA25)
As the most sensitive of the three, the EMA25 reacts swiftly to recent price movements, capturing short-term fluctuations.
Indicator #4: Average Directional Index (ADX)
A measure of trend strength, irrespective of its upward or downward trajectory. When it surpasses the 30-mark, a robust trend is usually underway.
So, indicator-wise, the strategy is rocket science and actually boring. Let’s examine how the strategy utilized the indicators and produced buy/sell signals.
How the Strategy Works
This was interesting. Once we saw the indicators, we expected a simple crossover strategy that uses the ADX to confirm a trend. However, the strategy works quite differently.
- The price lies above EMA200.
- EMA25 scales above EMA100, which itself is perched above EMA200 — a hallmark of an uptrend.
- ADX surges past 30, indicating the presence of a formidable trend.
- While staying above EMA100, the price dips below the EMA25 and then ascends past it within the subsequent five candles.
- The price sits beneath EMA200.
- EMA25 is stationed below EMA100, which is itself below EMA200 — signaling a downtrend.
- ADX registers a reading beyond 30, indicative of a potent trend.
- Remaining below EMA100, the price climbs above the EMA25 but descends below it within the next five candles.
The strategy does not provide dedicated exit signals. Therefore, we used local, dynamic support and resistance levels to stop loss and take profit.
The efficacy of any strategy is measured by its results, and this Moving Average blend did actually not disappoint.
Depending on the overall market and crypto asset, we could achieve a 74%-78% win rate. The strategy’s resilience is further underscored by a modest maximum drawback of just 6%. However, it is worth mentioning that the results have been considerably lower on some tokens, with only a 62%-68% win rate.
Notably, the number of trades executed varies based on the chosen asset and the timeframe applied, making it adaptable for different trading preferences.
How to Utilize the Strategy
As described above, spot entry signals—especially when trading a larger number of assets- are quite complex. Obviously, this is something we would recommend based on the results shown.
For hands-on traders, applying this strategy manually on TradingView is possible, though it requires a keen eye and proficiency in setting up the said indicators. Each entry or exit condition needs to be scrutinized in real time.
However, for those seeking a streamlined experience, CryptoKnowledge offers a straightforward solution. The platform has pre-configured strategy that allows users to subscribe for real-time signal alerts. This saves time and ensures precision, eliminating the chances of manual oversight.