In random events, “streaks” have low probability, and this strategy is trying to take advantage of this fact by betting against the “streak”.

Here we see 3 consecutive red candles before the algorithm enters the trade:

entry position (white dot) and exit position (yellow square)

The code

// CANDLE COUNTING STRATEGY

bool hasOpenPosition() {
	return 
		this.positions.length != 0 &&
		this.positions[$-1].action == Action.OPEN;
}

override bool trade() {
	if(!super.trade()) return false;
	// ALL CODE HERE - BEGIN //

	Candle[] btcCandles = this.candles[c.BTCUSDT];
	double currentPrice = btcCandles[$-1].close;

	bool is3red = 
		btcCandles[$-4].color == Color.RED &&
		btcCandles[$-3].color == Color.RED &&
		btcCandles[$-2].color == Color.RED;

	if (
		is3red &&
		!hasOpenPosition()
	) {
		Order marketBuy = Order(
			c.BTCUSDT,
			OrderType.MARKET,
			Direction.BUY,
			currentPrice * 1.003, // target price
			currentPrice * 0.995, // stop price
		);
		this.order(marketBuy);
	}

	// ALL CODE HERE - END //
	return true;
}

In our code, using the Badger algo-bot starter code, we can see that the actual candles taken into consideration are…

  • 4th from the end of the array
  • 3rd from the end
  • 2nd from the end

…but not the last one.

Why?

Because last candle isn’t finished. In fact, it just begun. So we’re taking last 3 completed candles to base our decision upon.

Test results

After 2367 trades, this algorithm totally blew our account.

So hoping that the bad streak can’t continue is wrong – it definitely can.

----------------------------
| PERFORMANCE    |
----------------------------
- Initial capital: 100000.00
- Final capital::: 997.92
- Total trades:::: 2367

- ROI:::::: -99.00 %
- Min. ROI: -99.00 %
- Max. ROI: 0.10 %

- Drawdown: -99.00 %
- Pushup::: 1.81 %
----------------------------

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