Trading Crypto with RSI for a year – would it end in profit?


Hey guys, it’s Kat from CLEO.one What I would like to investigate with you today is the importance of testing presumptions in crypto trading We’re gonna look at the RSI indicator Now, you know that it’s an extremely popular indicator when trading cryptocurrencies is a lot of traders use it as gospel So what I would like to find out is what would have happened if I traded only based on RSI in the past year, so I’m going to run a test in the CLEO.one platform pretending I have 10000 USDT on The maximum range setting the timeframe on one hour. Why not? The way I’m gonna set up the test in this case will be when RSI I Is below 30 I Will be buying and I will be buying let’s say 0.25 Bitcoin because that’s my unit in this case and I’ll set my take profit at 20% Of market price and my stop loss at 10 All right, but I would also like to Sell when it’s oversold. The oversold level is usually considered above 70 So the way we’re going to set it up is that whenever RSI is above 70 We will be selling and I’m gonna go with Exactly the same quarter of a Bitcoin and I’m gonna set my take profit and stop loss in the similar way so just by percentages of Take profit of 20 and my stop loss at 10% of market price That’s it. I have everything set up I Can’t spell – RSI simple – excellent. So whenever RSI is below 30 I will be buying a quarter of Bitcoin because those are the oversold levels and When it’s overbought I’ll be selling and I should probably be very profitable. So let’s give this strategy a test And you will see that the results are not stellar The trades are quite long So maybe I was a bit too ambitious with my take profit and stop-loss. So let’s try and bring those a bit in I Can do that by clicking the new version button from the results – create new version So, let’s see if we get a bit more conservative Let’s say I’ll take five percent profit and I’ll do stop-loss at 2.5% of market price Same thing here Five percent two point five percent of Market price Let’s see what our results look like in this case Okay, the frequency of my trades definitely increased and they’re running a lot more short-term One hour three hours and so on But generally this is proving not to be the most profitable way to buy and sell Bitcoin. Let me see which one is doing worse Basically I’m seeing the same amount of trades almost. A bit more trades when selling when selling when RSI is above 70 but overall my average net profit is similar But I seem to be doing slightly better when longing. Ether way this is not a viable strategy Now what you could do in cases like this when you’re seeing Maybe we’re being too conservative on our stop losses and take profit So lets go with something in the middle from what we tried before and now Bring the stop-loss a bit Wider as Well as the take profit, so now I have it set at 10% My take profit is a 10% of market price and my stop-loss is at 5. Let’s see if this will maybe make it profitable Although, I doubt it. Yeah, it’s somewhere in the middle. The last thing I would try is Creating a new version but trading the strategy on a higher time frame as the higher time frame usually has less noise and May produce more sound results. Let’s see So now not even on the 4 hour time frame I would basically be trading at a loss for the entire whole year if I was to use only RSI, I As a trigger to buy and sell Bitcoin. Now it would be, you could try and replicate the same test with different assets, let me know if the results are vastly different However doing tests like this is absolutely imperative as it puts you in a position to stop presuming and stop doing what everyone else seems to be talking about and using and Claiming that they’re a profitable trader because obviously that’s not the case The next thing that we’ll be looking at in a subsequent video is how MACD Actually benefits crypto traders. Purely using only the MACD signal and then we’re going to combine it with some other indicators But thank you very much for your attention today. And remember to test out your presumptions not to trade blindly I will see you on the trading floor. Thank you very much

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